SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
---
Pre-Effective Amendment No. ____ / /
Post-Effective Amendment No. 1 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. 2 / X /
(Check appropriate box or boxes.)
THE BSG FUNDS - FILE NOS. 333-22075 AND 811-8061
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
1105 SCHROCK ROAD, SUITE 437, COLUMBUS, OHIO 43229
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (614) 848-3400
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CPM STATUTORY AGENT CORPORATION, 366 EAST BROAD STREET, COLUMBUS, OHIO 43215
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(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Release Date: October 31, 1997
It is proposed that this filing will become effective:
/ X / immediately upon filing pursuant to paragraph (b)
/ / on December 31, 1996 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a) (1)
/ / on (date) pursuant to paragraph (a) (1)
/ / 75 days after filing pursuant to paragraph (a) (2)
/ / on (date) pursuant to paragraph (a) (2) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered
Omit from the facing sheet reference to the other Act if the
Registration Statement or amendment is filed under only one of the Acts. Include
the "Approximate Date of Proposed Public Offering" and "Title of Securities
Being Registered" only where securities are being registered under the
Securities Act of 1933.
<PAGE>
THE BSG FUNDS
CROSS REFERENCE SHEET
FORM N-1A
FOR BANC STOCK GROUP FUND
ITEM SECTION IN EACH PROSPECTUS
- ---- --------------------------
1.....................................Cover Page
2.....................................Summary of Fund Expenses
3.....................................Performance Information; Financial
Highlights
4.....................................The Fund, Investment Objective and
Strategies and Risk Considerations,
Investment Policies and Techniques,
Operation of the Fund, General
Information
5.....................................Operation of the Fund
5A....................................None
6.....................................Cover Page, Dividends and Distributions,
Taxes, General Information, How to
Redeem Shares
7.....................................Cover Page, How to Invest in the Fund,
Share Price Calculation, Operation of
the Fund, How to Redeem Shares
8.....................................How to Redeem Shares
9.....................................None
13.....................................General Information
15.....................................General Information
SECTION IN STATEMENT OF ADDITIONAL
----------------------------------
ITEM INFORMATION
- ---- -----------
10.....................................Cover Page
11.....................................Table of Contents
12.....................................None
13.....................................Additional Information About Fund
Investments and Risk Considerations,
Investment Limitations
14.....................................Trustees and Officers
15.....................................None
16.....................................The Investment Adviser, Custodian,
Transfer Agent, Accountants, Trustees
and Officers
17.....................................Portfolio Transactions and Brokerage
18.....................................Description of the Trust
19.....................................Determination of Share Price
20.....................................None
21.....................................Distributor
22.....................................Investment Performance
23.....................................Financial Statements
<PAGE>
BANC STOCK GROUP FUND
PROSPECTUS NOVEMBER 1, 1997
1105 Schrock Road, Suite 437
Columbus, Ohio 43229
For Information, Shareholder Services and Requests:
(888) BANK-595
Banc Stock Group Fund (the "Fund") is a diversified, open-end mutual
fund whose investment objective is to provide long-term capital appreciation.
The Fund seeks to achieve its objective by investing primarily in equity
securities of community banks, lending institutions and financial services
companies believed by the Fund's adviser, Heartland Advisory Group, Inc. to
offer superior prospects for long term growth.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission (the "SEC") dated November 1, 1997, which is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT
ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY, ENTITY, OR PERSON. THE PURCHASE OF FUND SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
The Example should not be considered a representation of future Fund performance
or expenses, both of which may vary.
Shareholders should be aware that the Fund, unlike most other mutual
funds, does not pay directly for transfer agency, pricing, custodial, auditing
or legal services, nor does it pay directly any general administrative or other
significant operating expenses. The Adviser pays all of the expenses of the Fund
except brokerage, taxes, interest, fees and expenses of non-interested person
trustees and extraordinary expenses.
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)....................4.00%
Sales Load Imposed on Reinvested Dividends..............NONE
Redemption Fee.............................................................NONE
Exchange Fees..............................................................NONE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management Fees....................................2.50%
12b-1 Charges.......................................NONE
Other Expenses(2)..................................0.00%
Total Fund Operating Expenses(3)..........................................2.50%
(1) Processing organizations may impose transactional fees on shareholders.
(2) The Fund estimates that other expenses (fees and expenses of the trustees
who are not "interested persons" as defined in the Investment Company
Act) will be less than 0.01% of average net assets for the first fiscal
year.
(3) The Fund's total operating expenses are equal to the management fee paid
to the Adviser because the Adviser pays all operating expenses (except as
described in footnote 2).
-2-
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EXAMPLE
- -------
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS
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$65 $116
THE FUND
Banc Stock Group Fund (the "Fund") was organized as a series of The
BSG Funds, an Ohio business trust (the "Trust") on January 14, 1997, and
commenced operations on August 1, 1997. This prospectus offers shares of the
Fund and each share represents an undivided, proportionate interest in the Fund.
The investment adviser to the Fund is Heartland Advisory Group, Inc. (the
"Adviser").
FINANCIAL HIGHLIGHTS
The following condensed supplementary financial information for the
period August 1, 1997 (inception of operations) through September 30, 1997 is
derived from the unaudited financial statements of the Fund.
<TABLE>
<CAPTION>
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD)
FOR THE PERIOD AUGUST 1, 1997 (INCEPTION OF OPERATIONS)
THROUGH SEPTEMBER 30, 1997
(UNAUDITED)
<S> <C>
Net asset value, beginning of period ............... $ 10.00
---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) ....................... (0.01)
Net realized and unrealized gain (loss) on
investments ................................... 0.89
---------
Total from investment operations ................... 0.88
---------
LESS DISTRIBUTIONS
Dividends from net investment income ............... 0.00
Distribution from realized gains from security
transactions .................................. 0.00
---------
Total distributions ................................ 0.00
---------
Net asset value, end of period ..................... $ 10.88
=========
Total return** ..................................... 65.87% *
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (in 000's) ................ 5,020
Ratio of expenses to average net assets ............ 2.50% *
Ratio of net investment income (loss) to average
net assets .................................... (0.48)% *
Portfolio turnover rate ............................ 0.00%
Average commission rate paid ....................... $ 0.2812
<FN>
* Annualized
** Based on net asset value per share
</FN>
</TABLE>
INVESTMENT OBJECTIVE AND STRATEGIES AND RISK CONSIDERATIONS
The investment objective of the Fund is to provide shareholders with
long term capital appreciation. The Fund seeks to achieve its objective by
investing primarily in equity securities of community banks, lending
institutions, and financial services companies believed by the Adviser to offer
superior prospects for long term growth. The Adviser expects to select stocks of
banks with low price to earnings ratios, minimal loan losses and long histories
of profitability located in stable communities with growth potential. Community
banks generally are banks having a county, rural or suburban area focus, rather
than a regional or wider focus.
Under normal circumstances, the Fund will invest at least 65% of its
total assets in equity securities (common stock, preferred stock and securities
convertible into common stock) of banks and other lending institutions,
including community, regional and money center banks, bank holding companies,
savings and loan associations, savings banks and commercial and industrial
banks. The
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<PAGE>
Fund may invest in banks that are not members of the Federal Reserve
System or whose deposits are not insured by the Federal Deposit Insurance
Corporation. Although the Adviser primarily seeks opportunities for capital
appreciation, some of the banks in which the Fund may invest pay regular
dividends. Accordingly, the Fund expects to receive moderate income in the form
of cash or stock dividends.
Although the Fund will invest primarily in equity securities of banks
and other lending institutions, the Fund may invest in equity securities of
companies outside the banking industry and, for temporary defensive purposes
under abnormal market or economic conditions, may hold all or a portion of its
assets in money market instruments (high quality income securities with
maturities of less than one year), securities of money market funds or U.S.
government repurchase agreements. The Fund may also invest in such investments
at any time to maintain liquidity or pending selection of investments in
accordance with its policies. If the Fund acquires securities of money market
funds, the shareholders of the Fund will be subject to duplicative management
fees.
The concentration of the Fund's investments in the banking industry
will subject the Fund to risks in addition to those that apply to the general
equity market. Economic, legislative or regulatory developments may occur which
significantly affect the entire banking industry and thus may subject the Fund
to greater market fluctuations than a fund that does not concentrate in a
particular industry. Banks and other lending institutions are subject to
extensive governmental regulation which may limit both the amounts and types of
loans and other financial commitments they can make, and the interest rates and
fees they can charge. Profitability is largely dependent on the availability and
cost of capital funds, and can fluctuate significantly when interest rates
change. Credit losses resulting from financial difficulties of borrowers can
negatively impact the industry. Thus, a number of factors, in addition to
general economic conditions, can adversely affect the financial performance and
condition of the institutions in which the Fund invests.
In addition, as many community banks and other lending institutions
are smaller capitalization companies, the Fund may be subject to the risks
associated with such companies. The trading volume of securities of smaller
capitalization companies is normally less than that of larger capitalization
companies and, therefore, may disproportionately affect their market price,
tending to make them rise more in response to buying demand and fall more in
response to selling pressure than is the case with larger capitalization
companies.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, you should be aware that the Fund has no
operating history and the Adviser has no prior experience in acting as an
investment adviser to a mutual fund. Rates of total return quoted by the Fund
may be higher or lower than past quotations, and there can be no assurance that
any rate of total return will be maintained. See "Investment Policies and
Techniques" for a more detailed discussion of the Fund's investment practices.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $2,500 and minimum subsequent investments of $500. There are no
minimums for qualified retirement accounts and
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<PAGE>
medical savings accounts. For shareholders participating in the Fund's
continuing automatic transfer ("CAT") program, which is described below, the
minimum initial investment is $1,000 and the minimum subsequent investment is
$100.
You may open an account and make an initial investment through
securities dealers having a sales agreement with Banc Stock Financial Services,
Inc., the Fund's distributor (the "Distributor"). You may also make a direct
initial investment by completing and signing the investment application form
which accompanies this Prospectus and mailing it, in proper form, together with
a check made payable to Banc Stock Group Fund to the P.O. Box listed below. If
you prefer overnight delivery, use the overnight address listed below.
U.S. MAIL: Banc Stock Group Fund OVERNIGHT: Banc Stock Group Fund
P.O. Box 640484 c/o Star Bank, N.A.
Cincinnati, Ohio 45264-0484 Mutual Fund Custody Dept.
425 Walnut St. M.L. 6118
Cincinnati, Ohio 45202
Shares of the Fund are purchased at the public offering price. The
public offering price is the next determined net asset value per share plus a
sales load as shown in the following table.
<TABLE>
<CAPTION>
Sales Load as of % of:
Public Net
Offering Amount Dealer Reallowance as % of
Amount of Investment Price Invested Public Offering Price
- -------------------- ----- -------- ---------------------
<S> <C> <C> <C>
Less than $50,000 4.00% 4.38% 3.75%
$50,000 but less than $100,000 3.50% 3.73% 3.25%
$100,000 but less than $250,000 2.75% 2.88% 2.50%
$250,000 but less than $500,000 2.00% 2.04% 1.75%
$500,000 but less than $1,000,000 1.00 1.01% .75
$1,000,000 or more None None None
</TABLE>
Under certain circumstances, the Distributor may change the reallowance to
dealers and may also compensate dealers out of its own assets. Dealers engaged
in the sale of shares of the Fund may be deemed to be underwriters under the
Securities Act of 1933. The Distributor retains the entire sales load on all
direct initial investments in the Fund and on all investments in accounts with
no designated dealer of record.
For purposes of determining the applicable sales load, a purchaser
includes an individual, his spouse and their children under the age of 21,
purchasing shares for his or their own account; or a trustee or other fiduciary
purchasing shares for a single fiduciary account although more than one
beneficiary may be involved; or employees of a common employer, provided that
economies of scale are realized through remittances from a single source and
quarterly confirmation of such purchases; or an organized group, provided that
the purchases are made through a central administration, or a single dealer, or
by other means which result in economy of sales effort or expense.
Shares of the Fund are sold on a continuous basis at the public
offering price next determined after receipt of a purchase order by the Trust.
Purchase orders received by dealers prior to 4:00 p.m.,
- 5 -
<PAGE>
Eastern time, on any business day and transmitted to the Distributor by 5:00
p.m., Eastern time, that day are confirmed at the public offering price
determined as of the close of the regular session of trading on the New York
Stock Exchange on that day. It is the responsibility of dealers to transmit
properly completed orders so that they will be received by the Distributor by
5:00 p.m., Eastern time. Dealers may charge a fee for effecting purchase orders.
Direct purchase orders received by 4:00 p.m., Eastern time, are confirmed at
that day's public offering price. Direct investments received after 4:00 p.m.
and others received from dealers after 5:00 p.m. are confirmed at the public
offering price next determined on the following business day.
CAT PROGRAM
When making your initial investment, you may choose to participate in
the Fund's continuing automatic transfer ("CAT") program by completing the
separate CAT Investment Application Form. The CAT Program offers reduced
investment minimums and helps investors make additional purchases of the Fund
over a period of years. Purchase amounts are automatically debited each month
from the shareholder's bank account through ACH (automated clearing house).
SUBSEQUENT PURCHASES
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) through your securities dealer, or directly
from the Fund by mail or wire. If your securities dealer received concessions
for selling shares of the Fund to you, such securities dealer will receive the
concessions described above with respect to additional investments. Each
additional mail purchase request must contain the name of your account and your
account number. Checks should be made payable to Banc Stock Group Fund and
should be sent to the Custodian, as instructed above. To purchase shares of the
Fund by wire, call the Transfer Agent at (888) BANK-595 for instructions. Then,
you should provide your bank with the following information for purposes of
wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Banc Stock Group Fund
D.D.A. #486448004
Account Name _________________ (write in shareholder
name) For Account # ______________ (write in account
number)
Wire orders will be accepted only on a day on which the Fund and the
Custodian and Transfer Agent are open for business. A wire purchase will not be
considered made until the wired money is received and the purchase is accepted
by the Fund. Any delays which may occur in wiring money, including delays which
may occur in processing by the banks, are not the responsibility of the Fund or
the Transfer Agent. There is presently no fee for the receipt of wired funds,
but the right to charge shareholders for this service is reserved by the Fund.
-6-
<PAGE>
PURCHASES AT NET ASSET VALUE
Community banks and savings and loan associations (defined for this
purpose as those banks and savings and loan associations with assets of less
than $25 billion), in their fiduciary capacity or for their own accounts, may
purchase and redeem shares of the Fund without paying a sales charge. To the
extent permitted by regulatory authorities, a bank trust department may charge
fees to clients for whose account it purchases shares at net asset value.
Employees, officers and directors of these financial institutions, including
members of the immediate family, may also purchase and redeem shares without
paying a sales charge.
Trustees, directors, officers and employees of the Trust, the Adviser,
service providers of the Trust, including members of the immediate family of
such individuals and employee benefit plans established by such entities, may
also purchase and redeem shares of the Fund without paying a sales charge.
Broker Dealers with selling agreements with the Distributor and employee benefit
plans established by same, may purchase and redeem shares of the Fund without
paying a sales charge. In addition, shares of the Fund may be purchased at net
asset value through processing organizations (broker-dealers, banks or other
financial institutions) that have a sales agreement with the Distributor. When
shares are purchased this way, the processing organization, rather than its
customer, may be the shareholder of record of the shares. The minimum initial
and subsequent investments in the Fund for shareholders who invest through a
processing organization generally will be set by the processing organization.
Processing organizations may also impose other charges and restrictions in
addition to or different from those applicable to investors who remain the
shareholder of record of their shares. Thus, an investor contemplating investing
with the Fund through a processing organization should read materials provided
by the processing organization in conjunction with this Prospectus.
TAX SHELTERED RETIREMENT PLANS
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact American Data Services, Inc. the Fund's
transfer agent ( the "Transfer Agent") at 888- BANK-595 for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax adviser regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
OTHER PURCHASE INFORMATION
Dividends begin to accrue after you become a shareholder. The Fund
does not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can
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<PAGE>
redeem shares from any identically registered account in the Fund as
reimbursement for any loss incurred. You may be prohibited or restricted from
making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. A broker may charge a transaction fee
for the redemption. Presently, there is no charge for wire redemptions; however,
the Fund reserves the right to charge for this service. Any charges for wire
redemptions will be deducted from the shareholder's Fund account by redemption
of shares.
BY MAIL - You may redeem any part of your account in the Fund by mail.
Your request should be addressed to:
Banc Stock Group Fund
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by an "eligible guarantor institution."
An eligible guarantor institution is defined as an institution that is a member
of a Medallion Program, located in or having a correspondent in New York City.
Such institutions generally include national or state banks, savings
associations, savings and loan associations, trust companies, savings banks,
credit unions and members of a recognized stock exchange. Signature guarantees
are for the protection of shareholders. At the discretion of the Fund or the
Transfer Agent, a shareholder, prior to redemption, may be required to furnish
additional legal documents to insure proper authorization.
BY TELEPHONE - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (888) BANK-595. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving or in a timely fashion responding to
telephone
-8-
<PAGE>
requests for redemptions or exchanges. If you are unable to reach the Fund by
telephone, you may request a redemption or exchange by mail.
ADDITIONAL INFORMATION - If you are not certain of the requirements
for a redemption please call the Transfer Agent at (888) BANK-595. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $2,500 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When
-9-
<PAGE>
prices are not readily available from a pricing service, or when restricted or
illiquid securities are being valued, securities are valued at fair value as
determined in good faith by the Adviser, subject to review of the Board of
Trustees. Short term investments in fixed income securities with maturities of
less than 60 days when acquired, or which subsequently are within 60 days of
maturity, are valued by using the amortized cost method of valuation, which the
Board has determined will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
capital gains to individuals are taxed at the same rate as ordinary income. All
distributions of net capital gains to corporations are taxed at regular
corporate rates. Any distributions designated as being made from net realized
long term capital gains are taxable to shareholders as long term capital gains
regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request
the shareholder's certified taxpayer identification number (social security
number for individuals) and a certification that the
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shareholder is not subject to backup withholding. Unless the shareholder
provides this information, the Fund will be required to withhold and remit to
the U.S. Treasury 31% of the dividends, distributions and redemption proceeds
payable to the shareholder. Shareholders should be aware that, under regulations
promulgated by the Internal Revenue Service, the Fund may be fined $50 annually
for each account for which a certified taxpayer identification number is not
provided. In the event that such a fine is imposed with respect to a specific
account in any year, the Fund may make a corresponding charge against the
account.
OPERATION OF THE FUND
The Fund is a diversified series of The BSG Funds, an open-end
management investment company organized as an Ohio business trust on January 14,
1997. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains Heartland Advisory Group, Inc., 1105 Schrock Road,
Suite 427, Columbus, Ohio 43229 (the "Adviser") to manage the Fund's
investments. The Adviser has been engaged in the business of researching,
buying, holding, and selling the shares of community and regional banks for
almost two decades. Since 1990, it has recommended more than 200 community banks
to its clients for their portfolios. The Adviser's clients come from all walks
of life. Professionals such as CPA's, physicians, attorneys, pharmacists, and
academics are one group of investors. Significant numbers of investors also come
from the world of entrepreneurs: people who own funeral homes, machine shops,
lumber yards, quarry miners, and the like as well as members of the agricultural
grain and livestock community.
The Adviser typically follows from 150 to 400 banks at any one time as
candidates for investment. The Adviser researches these equity securities on the
basis of the fundamentals of return on equity, return on assets, low loan loss
experience, prosperous market conditions, special niche services,
consumer-oriented staff, and experienced and seasoned management. The Adviser
also gives consideration to the portion of insider ownership as it believes this
is a potential indicator of the care and concern a bank's management and board
of directors bring to the institution and it shareholders. The investment
decisions of the Fund are made by a committee of the Adviser, which is primarily
responsible for the day-to-day management of the Fund's portfolio.
The Fund is authorized to pay the Adviser a fee equal to an annual
average rate of 2.50% of its average daily net assets. The Adviser pays all of
the operating expenses of the Fund except brokerage, taxes, interest, fees and
expenses on non-interested person trustees and extraordinary expenses. It should
be noted that most investment companies pay their own operating expenses
directly, while the Fund's expenses, except those specified above, are paid by
the Adviser.
The Fund retains American Data Services, Inc., P.O. Box 5536,
Hauppauge, New York 11788-0132 (the "Administrator") to manage the Fund's
business affairs and provide the Fund with administrative services, including
all regulatory reporting and necessary office equipment, personnel and
facilities. The Fund also retains American Data Services, Inc. (the "Transfer
Agent") to serve as transfer agent, dividend paying agent and shareholder
service agent. For its services as Administrator and Transfer Agent, American
Data Services, Inc.
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receives a monthly fee from the Adviser equal to an annual average rate of 0.25%
of the Fund's average daily net assets.
The Fund retains Banc Stock Financial Services, Inc., 1105 Schrock
Road, Suite 427, Columbus, Ohio 43229 (the "Distributor") to act as the
principal distributor of the Fund's shares. The services of the Administrator,
Transfer Agent and Distributor are operating expenses paid by the Adviser.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Adviser (not the Fund) may pay certain financial
institutions (which may include banks, brokers, dealers and other industry
professionals) a "servicing fee" for performing certain administrative functions
for the Fund shareholders to the extent these institutions are allowed to do so
by applicable statute, rule or regulation. In addition, the Distributor (not the
fund) may compensate brokers and other intermediaries for directing assets to or
retaining assets in the Fund. The Distributor is a registered broker-dealer and
it is anticipated that it will receive brokerage commissions from the Fund. Both
the Adviser and the Distributor are wholly owned by Banc Stock Group, Inc., a
corporation which invests in financial services companies.
INVESTMENT POLICIES AND TECHNIQUES
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ.
EQUITY SECURITIES
The Fund may invest in common stock, preferred stock and common stock
equivalents (such as convertible preferred stock and convertible debentures).
Convertible preferred stock is preferred stock that can be converted into common
stock pursuant to its terms. Convertible debentures are debt instruments that
can be converted into common stock pursuant to their terms. The Adviser intends
to invest only in convertible debentures rated A or higher by Standard & Poor's
Corporation ("S&P") or by Moody's Investors Services, Inc. ("Moody's"). The Fund
may hold warrants and rights issued in conjunction with common stock, but in
general will sell any such warrants or rights as soon as practicable after they
are received. Warrants are options to purchase equity securities at a specified
price valid for a specific time period. Rights are similar to warrants, but
normally have a short duration and are distributed by the issuer to its
shareholders.
GENERAL
The Fund may utilize the following investment techniques, provided the
Fund's investment in each does not exceed 5% of its net assets: engaging in
short sales; purchasing call options; purchasing put options; writing (selling)
covered call options; and, if the Fund is selling an equivalent amount of the
same security short, writing (selling) put options. See "Additional Information
About Fund Investments and Risk Considerations" in the Statement of Additional
Information. Up to 15%
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of the Fund's portfolio may consist of illiquid securities. Illiquid securities
generally include securities which cannot be disposed of promptly and in the
ordinary course of business without taking a reduced price. The Fund will not
purchase any securities while borrowings representing more than 5% of its total
assets are outstanding.
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Adviser believes that market conditions, creditworthiness factors or general
economic conditions warrant such action. It is anticipated that the Fund will
have a portfolio turnover rate of less than 100%.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights. The Declaration of Trust can be amended by the Trustees, except that any
amendment that adversely effects the rights of shareholders must be approved by
the shareholders affected.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions and the deduction of
the current maximum sales load from the initial investment.
The Fund may also advertise performance information (a "non-standardized
quotation") which is calculated differently from "average annual total return."
A non-standardized quotation of total return may be a cumulative return which
measures the percentage change in the value of an account between the beginning
and end of a period, assuming no activity in the account other than reinvestment
of dividends and capital gains distributions. A
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<PAGE>
non-standardized quotation may also be an average annual compounded rate of
return overa specified period which may be a period different from those
specified for "average annual total return." In addition, a non-standardized
quotation may be an indication of the value of a $10,000 investment (made on the
date of the initial public offering of the Fund's shares) as of the end of a
specified period. These non-standardized quotations do not include the effect of
the applicable sales load which, if included, would reduce the quoted
performance. A non-standardized quotation will always be accompanied by the
Fund's "average annual total return" as described above.
The Fund may also include in advertisements data comparing performance with
other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to the NASDAQ Combined Bank Index (the "Bank Index"), and the
performance of the Bank Index as well as the Fund may be compared to other
well-known indices of market performance including the Standard & Poor's (S&P)
500 Index or the Dow Jones Industrial Average. With respect to the Bank Index,
shareholders should be aware that the Fund invests in banks and other securities
that are not included in the Bank Index. The performance of the Bank Index
should not be considered indicative of future performance of the Fund.
THE ADVERTISED PERFORMANCE DATA OF THE FUND IS BASED ON HISTORICAL
PERFORMANCE AND IS NOT INTENDED TO INDICATE FUTURE PERFORMANCE. RATES OF TOTAL
RETURN QUOTED BY THE FUND MAY BE HIGHER OR LOWER THAN PAST QUOTATIONS, AND THERE
CAN BE NO ASSURANCE THAT ANY RATE OF TOTAL RETURN WILL BE MAINTAINED. THE
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT A
SHAREHOLDER'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE
SHAREHOLDER'S ORIGINAL INVESTMENT.
INVESTMENT ADVISER TRANSFER AGENT AND ADMINISTRATOR
Heartland Advisory Group, Inc. (ALL REDEMPTION REQUESTS)
1105 Schrock Road, Suite 427 American Data Services, Inc.
Columbus, Ohio 43229 P.O. Box 5536
Hauppauge, New York 11788-0132
CUSTODIAN (ALL INITIAL AND AUDITORS
SUBSEQUENT PURCHASES) McCurdy & Associates CPA's, Inc.
Star Bank, N.A. 27955 Clemens Road
P.O. Box 640484 Westlake, Ohio 44145
Cincinnati, Ohio 45264-0484
DISTRIBUTOR
Banc Stock Financial Services, Inc.
1105 Schrock Road, Suite 427
Columbus, Ohio 43229
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and
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<PAGE>
if given or made, such information or representations must not be relied upon as
being authorized by the Fund. This Prospectus does not constitute an offer by
the Fund to sell its shares in any state to any person to whom it is unlawful to
make such offer in such state.
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TABLE OF CONTENTS
PAGE
----
SUMMARY OF FUND EXPENSES .......................................... 3
Shareholder Transaction Expenses ........................ 3
Annual Fund Operating Expenses .......................... 3
THE FUND .......................................................... 3
FINANCIAL HIGHLIGHTS .............................................. 4
INVESTMENT OBJECTIVE AND STRATEGIES AND RISK CONSIDERATIONS ....... 5
HOW TO INVEST IN THE FUND ......................................... 6
CAT Program ............................................. 7
Subsequent Purchases .................................... 7
Purchases at Net Asset Value ............................ 8
Tax Sheltered Retirement Plans .......................... 8
Other Purchase Information .............................. 8
HOW TO REDEEM SHARES .............................................. 9
By Mail ................................................. 9
By Telephone ............................................ 9
Additional Information .................................. 10
SHARE PRICE CALCULATION ........................................... 10
DIVIDENDS AND DISTRIBUTIONS ....................................... 11
TAXES ............................................................. 11
OPERATION OF THE FUND ............................................. 12
INVESTMENT POLICIES AND TECHNIQUES ................................ 13
Equity Securities ....................................... 13
General ................................................. 13
GENERAL INFORMATION ............................................... 13
Fundamental Policies .................................... 13
Portfolio Turnover ...................................... 13
Shareholder Rights ...................................... 13
PERFORMANCE INFORMATION ........................................... 14
<PAGE>
BANC STOCK GROUP FUND
STATEMENT OF ADDITIONAL INFORMATION
November 1, 1997
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Banc Stock Group Fund dated
November 1, 1997. A copy of the Prospectus can be obtained by writing the
Transfer Agent at P.O. Box 5536, Hauppauge, New York 11788-0132, or by calling
1-888-BANK-595.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
TABLE OF CONTENTS
-----------------
PAGE
----
DESCRIPTION OF THE TRUST.............................................1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS
AND RISK CONSIDERATIONS..............................................1
INVESTMENT LIMITATIONS...............................................3
THE INVESTMENT ADVISER...............................................5
TRUSTEES AND OFFICERS................................................6
PORTFOLIO TRANSACTIONS AND BROKERAGE.................................7
DETERMINATION OF SHARE PRICE.........................................9
INVESTMENT PERFORMANCE...............................................9
CUSTODIAN...........................................................10
TRANSFER AGENT......................................................10
ACCOUNTANTS.........................................................10
DISTRIBUTOR.........................................................10
FINANCIAL STATEMENTS................................................10
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DESCRIPTION OF THE TRUST
Banc Stock Group Fund (the "Fund") was organized as a series of The BSG
Funds (the "Trust"). The Trust is an open-end investment company established
under the laws of Ohio by an Agreement and Declaration of Trust dated January
14, 1997 (the "Trust Agreement"). The Trust Agreement permits the Trustees to
issue an unlimited number of shares of beneficial interest of separate series
without par value. The Fund is the only series currently authorized by the
Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
Upon sixty days prior written notice to shareholders, the Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. For
other information concerning the purchase and redemption of shares of the Fund,
see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objective and Strategies and Risk
Considerations" and "Investment Policies and Techniques").
A. SHORT SALES. The Fund may sell a security short in anticipation of a
decline in the market value of the security. When the Fund engages in a short
sale, it sells a security which it does not own. To complete the transaction,
the Fund must borrow the security by purchasing it at the market price at the
time of replacement, which may be more or less than the price at which the Fund
sold the security. The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund will realize a
profit if the security declines in price between those dates.
In connection with its short sales, the Fund will be required to
maintain a segregated account with its Custodian of cash or high grade liquid
assets equal to the market value of the securities sold less any collateral
deposited with its broker. The Fund will limit its short sales so that no more
than 5% of its net assets (less all its liabilities other than obligations under
the short sales) will be deposited
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as collateral and allocated to the segregated account. However, the segregated
account and deposits will not necessarily limit the Fund's potential loss on a
short sale, which is unlimited.
B. OPTION TRANSACTIONS. The Fund may engage in option transactions
involving individual securities and market indexes. An option involves either
(a) the right or the obligation to buy or sell a specific instrument at a
specific price until the expiration date of the option, or (b) the right to
receive payments or the obligation to make payments representing the difference
between the closing price of a market index and the exercise price of the option
expressed in dollars times a specified multiple until the expiration date of the
option. Options are sold (written) on securities and market indexes. The
purchaser of an option on a security pays the seller (the writer) a premium for
the right granted but is not obligated to buy or sell the underlying security.
The purchaser of an option on a market index pays the seller a premium for the
right granted, and in return the seller of such an option is obligated to make
the payment. A writer of an option may terminate the obligation prior to
expiration of the option by making an offsetting purchase of an identical
option. Options are traded on organized exchanges and in the over-the-counter
market. Call options on securities which the Fund sells (writes) will be covered
or secured, which means that it will own the underlying security in the case of
a call option. The Fund will sell (write) put options only if the Fund is
selling an equivalent amount of the same security short. When the Fund writes
options, it may be required to maintain a margin account, to pledge the
underlying securities or U.S. government obligations or to deposit assets in
escrow with the Custodian.
The purchase and writing of options involves certain risks. The
purchase of options limits the Fund's potential loss to the amount of the
premium paid and can afford the Fund the opportunity to profit from favorable
movements in the price of an underlying security to a greater extent than if
transactions were effected in the security directly. However, the purchase of an
option could result in the Fund losing a greater percentage of its investment
than if the transaction were effected directly. When the Fund writes a covered
call option, it will receive a premium, but it will give up the opportunity to
profit from a price increase in the underlying security above the exercise price
as long as its obligation as a writer continues, and it will retain the risk of
loss should the price of the security decline. When the Fund writes a put
option, it will assume the risk that the price of the underlying security or
instrument will fall below the exercise price, in which case the Fund may be
required to purchase the security or instrument at a higher price than the
market price of the security or instrument. In addition, there can be no
assurance that the Fund can effect a closing transaction on a particular option
it has written. Further, the total premium paid for any option may be lost if
the Fund does not exercise the option or, in the case of over-the-counter
options, the writer does not perform its obligations.
C. ILLIQUID SECURITIES. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements maturing in more than seven
days, nonpublicly offered securities and restricted securities. Restricted
securities are securities the resale of which is subject to legal or contractual
restrictions. Restricted securities may be sold only in privately negotiated
transactions, in a public offering with respect to which a registration
statement is in effect under the Securities Act of 1933 or pursuant to Rule 144
or Rule 144A promulgated under such Act. Where registration is required, the
Fund may be obligated to pay all or part of the registration expense, and a
considerable period may
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<PAGE>
elapse between the time of the decision to sell and the time such security may
be sold under an effective registration statement. If during such a period
adverse market conditions were to develop, the Fund might obtain a less
favorable price than the price it could have obtained when it decided to sell.
The Fund will not invest more than 15% of its net assets in illiquid securities.
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), I.E., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
this Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. BORROWING MONEY. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. SENIOR SECURITIES. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the Statement
of Additional Information.
3. UNDERWRITING. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments
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<PAGE>
backed by commodities or from investing in companies which are engaged in a
commodities business or have a significant portion of their assets in
commodities.
6. LOANS. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. CONCENTRATION. The Fund will not invest 25% or more of its total
assets in any particular industry other than the banking and financial
institutions industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
NON-FUNDAMENTAL. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. PLEDGING. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. BORROWING. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding.
3. MARGIN PURCHASES. The Fund will not purchase securities or evidences
of interest thereon on "margin." This limitation is not applicable to short term
credit obtained by the Fund for the clearance of purchases and sales or
redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
4. OPTIONS. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the Prospectus and the Statement of Additional
Information.
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<PAGE>
5. LOANS. The Fund will not loan its portfolio securities.
6. REVERSE REPURCHASE AGREEMENTS. The Fund will not enter into reverse
repurchase agreements.
THE INVESTMENT ADVISER
The Fund's investment adviser is Heartland Advisory Group, Inc., 1105
Schrock Road, Suite 437, Columbus, Ohio 43229 (the "Adviser"). The Adviser is a
wholly owned subsidiary of The Banc Stock Group, Inc.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a
fee computed and accrued daily and paid monthly at an annual rate of 2.50% of
the average daily net assets of the Fund. The Adviser may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Adviser to waive any fees in the future.
The Adviser retains the right to use the names "BSG" and "Banc Stock
Group" in connection with another investment company or business enterprise with
which the Adviser is or may become associated. The Trust's right to use the
names "BSG" and "Banc Stock Group" automatically ceases ninety days after
termination of the Agreement and may be withdrawn by the Adviser on ninety days
written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
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TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
=====================================================================================================================
NAME, AGE POSITION PRINCIPAL OCCUPATIONS
AND ADDRESS DURING PAST 5 YEARS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Michael E. Guirlinger * Trustee, President and Director, president and treasurer of Heartland Advisory
Age: 49 Treasurer Group, Inc.; director, president and treasurer of The
1105 Schrock Road, Suite 437 Banc Stock Group; director, vice president and treasurer
Columbus, Ohio 43229 of Banc Stock Financial Services, Inc.**; president and
treasurer of Buckeye Banc Stocks, Inc., an intra-state
broker-dealer, 1105 Schrock Road, Suite 437, Columbus,
Ohio.
- ---------------------------------------------------------------------------------------------------------------------
Lisa R. Hunter * Secretary Vice president of Banc Stock Financial Services, Inc.**
Age: 43 Prior to 1995, compliance administrator of VESTAX
1105 Schrock Road, Suite 437 Securities Corp, 1932 Georgetown Rd., Hudson, Ohio
Columbus, Ohio 43229 44256.
- ---------------------------------------------------------------------------------------------------------------------
John M. Bobb Trustee Director of Headwater Group, 8200 Clonse Road, New
Age: 56 Albany, Ohio, a fine arts consulting agency, 1994 to
8200 Clonse Road present. Prior to 1994, sales and marketing director with
New Albany, Ohio 43054 Bush Brothers, a food company in Knoxville, Tennessee.
- ---------------------------------------------------------------------------------------------------------------------
Virginia H. Rader Trustee Retired.
Age: 50
600 Fairway Blvd.
Columbus, Ohio 43215
- ---------------------------------------------------------------------------------------------------------------------
Gary A. Radville Trustee Chief Financial Officer of Peer Foods, Inc., 4631 S.
Age: 39 McDowell St., Chicago, Illinois. Prior to 1996,
4631 S. McDowell St. Partner, Price Waterhouse, 200 E. Randolph St.,
Chicago, Illinois 60609 Chicago, Illinois.
=====================================================================================================================
</TABLE>
Trustee fees are Trust expenses. The following table estimates the
Trustees' compensation for the first full year of the Trust ending February 28,
1998.
-6-
<PAGE>
===================================================================
TOTAL COMPENSATION
FROM TRUST (THE TRUST IS
NAME NOT IN A FUND COMPLEX)
- -------------------------------------------------------------------
Michael E. Guirlinger 0
- -------------------------------------------------------------------
Lisa R. Hunter 0
- -------------------------------------------------------------------
John M. Bobb $3,000
- -------------------------------------------------------------------
Virginia H. Rader $4,000
- -------------------------------------------------------------------
Gary A. Radville $4,000
===================================================================
- 6 -
<PAGE>
** Banc Stock Financial Services, Inc. is the Trust's principal underwriter (the
"Distributor"). The Adviser and The Banc Stock Group are affiliates of the
Distributor.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other
-7-
<PAGE>
information will not reduce the overall cost to the Adviser of performing its
duties to the Fund under the Agreement.
While the Fund does not deem it practicable and in its best interests
to solicit competitive bids for commission rates on each transaction,
consideration is regularly given to posted commission rates as well as other
information concerning the level of commissions charged on comparable
transactions by qualified brokers.
The Fund has no obligation to deal with any broker or dealer in the
execution of its transactions. However, it is contemplated that Banc Stock
Financial Services, Inc. ("BSFS"), in its capacity as a registered
broker-dealer, will effect substantially all securities transactions which are
executed on a national securities exchange and over-the-counter transactions
conducted on an agency basis. Such transactions will be executed at competitive
commission rates through Mesirow Financial, Inc.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
Under the Investment Company Act of 1940, persons affiliated with an
affiliate of the Adviser (such as BSFS) may be prohibited from dealing with the
Fund as a principal in the purchase and sale of securities. Therefore, BSFS will
not serve as the Fund's dealer in connection with over-the-counter transactions.
However, BSFS may serve as the Fund's broker in over-the-counter transactions
conducted on an agency basis and will receive brokerage commissions in
connection with such transactions. Such agency transactions will be executed
through Mesirow Financial, Inc.
The Fund will not effect any brokerage transactions in its portfolio
securities with BSFS if such transactions would be unfair or unreasonable to
Fund shareholders, and the commissions will be paid solely for the execution of
trades and not for any other services. The Agreement provides that affiliates,
or any affiliates of affiliates, of the Adviser may receive brokerage
commissions in connection with effecting such transactions for the Fund. In
determining the commissions to be paid to BSFS, it is the policy of the Fund
that such commissions will, in the judgment of the Trust's Board of Trustees, be
(a) at least as favorable to the Fund as those which would be charged by other
qualified brokers having comparable execution capability and (b) at least as
favorable to the Fund as commissions contemporaneously charged by BSFS on
comparable transactions for its most favored unaffiliated customers, except for
customers of BSFS considered by a majority of the Trust's disinterested Trustees
not to be comparable to the Fund. The disinterested Trustees from time to time
review, among other things, information relating to the commissions charged by
BSFS to the Fund and its other customers, and rates and other information
concerning the commissions charged by other qualified brokers.
The Agreement does not provide for a reduction of the Adviser's fee by
the amount of any profits earned by BSFS from brokerage commissions generated
from portfolio transactions of the Fund.
While the Fund contemplates no ongoing arrangements with any other
brokerage firms, brokerage business may be given from time to time to other
firms. BSFS will not receive reciprocal brokerage business as a result of the
brokerage business placed by the Fund with others.
-8-
<PAGE>
When the Fund and another of the Adviser's clients seek to purchase or
sell the same security at or about the same time, the Adviser may execute the
transaction on a combined ("blocked") basis. Blocked transactions can produce
better execution for the Fund because of the increased volume of the
transaction. If the entire blocked order is not filled, the Fund may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Fund may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. In the event that the entire blocked order
is not filled, the purchase or sale will normally be allocated on a pro rata
basis. Transactions of advisory clients (including the Fund) may also be blocked
with those of the Adviser, the Distributor or any of their affiliates. The
Adviser, the Distributor and their affiliates will be permitted to participate
in the blocked transaction only after all orders of advisory clients (including
the Fund) are filled.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas. For a description of the methods used to determine
the net asset value (share price), see "Share Price Calculation" in the
Prospectus.
The Fund's Prospectus, in the section "How to Invest in the Fund,"
describes certain types of investors for whom sales charges will be waived. The
Trustees have determined that the Fund incurs no appreciable distribution
expenses in connection with sales to these investors and that it is therefore
appropriate to waive sales charges for these investors.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return (over the one, five and ten year periods) that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates, that the maximum sales load is
deducted from the initial $1,000 and that a complete redemption occurs at the
end of the applicable period. If the Fund has been in existence less than one,
five or ten years, the time period since the date of the initial public offering
of shares will be substituted
-9-
<PAGE>
for the periods stated. The average annual total return of the Fund for the
period August 1, 1997 (inception) through September 30, 1997 was 29.84%.
The Fund may also advertise performance information (a
"non-standardized quotation") which is calculated differently from average
annual total return. A non-standardized quotation of total return may be a
cumulative return which measures the percentage change in the value of an
account between the beginning and end of a period, assuming no activity in the
account other than reinvestment of dividends and capital gains distributions.
The total return of the Fund as calculated in this manner for the period August
1, 1997 (inception) through September 30, 1997 was 8.80%. A non-standardized
quotation may also be an average annual compounded rate of return over a
specified period, which may be a period different from those specified for
average annual total return. The average annual compounded rate of return of the
Fund for the period August 1, 1997 (inception) through September 30, 1997 was
65.87%. In addition, a non-standardized quotation may be an indication of the
value of a $10,000 investment (made on the date of the initial public offering
of the Fund's shares) as of the end of a specified period. This value, for the
period ended September 30, 1997, was $10,880. These nonstandardized quotations
do not include the effect of the applicable sales load which, if included, would
reduce the quoted performance. A non-standardized quotation of total return will
always be accompanied by the Fund's average annual total return as described
above.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or to prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
- 10 -
<PAGE>
TRANSFER AGENT
American Data Services, Inc., P.O. Box 5536, Hauppauge, New York
11788-0132, acts as the Fund's transfer agent and, in such capacity, maintains
the records of each shareholder's account, answers shareholders' inquiries
concerning their accounts, processes purchases and redemptions of the Fund's
shares, acts as dividend and distribution disbursing agent and performs other
accounting and shareholder service functions. In addition, American Data
Services, Inc., in its capacity as Fund Administrator, provides the Fund with
certain monthly reports, record-keeping and other management- related services.
For a description of the fees paid by the Adviser on behalf of the Fund for
these administrative services, see "Operation of the Fund" in the Fund's
Prospectus.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending February 28, 1998. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
- 11 -
<PAGE>
DISTRIBUTOR
Banc Stock Financial Services, Inc., 1105 Schrock Road, Suite 437,
Columbus, Ohio 43229, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell shares of the Fund on a best efforts
basis only against purchase orders for the shares. Shares of the Fund are
offered to the public on a continuous basis.
FINANCIAL STATEMENTS
To The Shareholders and Trustees
The BSG Funds
We have audited the accompanying statement of assets and liabili ties of The BSG
Funds (comprising, respectively, the First American Bancshares Fund), as of
April 22, 1997. This financial statement is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets and liabilities presentation. Our procedures included
confirmation of cash held by the custodian as of April 22, 1997, by
correspondence with the custodian. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the First
American Bancshares Fund constituting The BSG Funds as of April 22, 1997, in
conformity with generally accepted accounting principles.
/s/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
April 22, 1997
<PAGE>
<TABLE>
<CAPTION>
THE BSG FUNDS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 22, 1997
<S> <C>
Banc Stock
Group Fund
----------
ASSETS: $100,000
--------
Cash in Bank
Total Assets $100,000
--------
NET ASSETS $100,000
--------
NET ASSETS CONSIST OF:
Capital Paid In $100,000
OUTSTANDING SHARES
Unlimited Number of Shares
Authorized Without Par Value 10,000
NET ASSET VALUE PER SHARE $10
OFFERING PRICE PER SHARE $10
</TABLE>
See Accountants' Audit Report
<PAGE>
THE BSG FUNDS
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The BSG Funds is an open-end investment company established under the laws
of Ohio by an Agreement and Declaration of Trust dated January 14, 1997. The
Trust Agreement permits the Trustees to issue an unlimited number of shares
of beneficial interest of separate series without par value. Shares of one
series have been authorized, which shares constitute the interests in Banc
Stock Group Fund.
The Fund uses an independent administrator, transfer agent, custodian, and
dividend paying agent. No transactions other than those relating to
organizational matters and the sale of 10,000 shares of Banc Stock Group
Fund have taken place to date.
2. RELATED PARTY TRANSACTIONS
The initial purchase of registrant's shares was made by Heartland Advisory
Group, Inc., the Fund's adviser (the "Adviser"). As a result of this
purchase, the registrant may be controlled by the Adviser, and the
registrant and the Adviser may be deemed to be under the common control of
Heartland Group of Companies, Inc.
The Adviser is a wholly owned subsidiary of Heartland Group of Companies,
Inc. (d/b/a/ The Banc Stock Group).
Under the terms of the management agreement (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees
and pays all of the expenses of the Fund except brokerage, taxes, interest,
fees and expenses of the non-interested person trustees and extraordinary
expenses. As compensation for its management services and agreement to pay
the Fund's expenses, the Fund is obligated to pay the Adviser a fee computed
and accrued daily and paid monthly at an annual rate of 2.50% of the average
daily net assets of the Fund. The Adviser may waive all or part of its fee,
at any time, and at its sole discretion, but such action shall not obligate
the Adviser to waive any fees in the future.
3. CAPITAL STOCK AND DISTRIBUTION
At April 22, 1997, an unlimited number of shares were authorized and paid in
capital amounted to $100,000 for Banc Stock Group Fund. Transactions in
capital stock were as follows:
<TABLE>
<S> <C>
Banc Stock
Group Fund
----------
Shares Sold 10,000
Shares Redeemed 0
Net Increase 10,000
Share Outstanding:
Beginning of Period 0
End of Period 10,000
</TABLE>
<PAGE>
THE BANC STOCK GROUP FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997
(Unaudited)
COMMON STOCKS - 94.80%
MARKET
SHARES VALUE
- ------ -----
2,000 Abington Bancorp, Inc.......................... $ 64,000
5,000 + Access Anytime Banco, Inc...................... 37,500
2,000 Andover Bancorp, Inc........................... 73,500
4,000 + Atlantic Bank, Inc............................. 57,000
2,500 Bancfirst Corp................................. 82,500
2,000 Bank of Commerce, Inc.......................... 48,000
1,250 Banknorth Group, Inc........................... 68,281
5,000 + Bankunited Financial Corp...................... 65,625
1,000 Bar Harbor Bancshare........................... 49,500
2,000 Bay Area Bancshares, Inc....................... 47,500
4,000 + BNC Corp....................................... 63,000
1,650 BT Financial Corp.............................. 76,313
3,000 + Capital Corp of the West, Inc.................. 42,375
3,000 Capital Savings Bancorp........................ 42,500
2,500 Carnegie Bancorp, Inc.......................... 66,562
2,000 Cathay Bancorp, Inc............................ 63,500
2,000 Central Cooperative Bank, Inc.................. 45,000
500 Century Bancorp, Inc........................... 38,750
3,500 Century South Banks............................ 70,875
2,000 CFX Corp....................................... 42,875
1,000 Coast Bancorp, Inc............................. 32,000
2,000 Coastal Bancorp, Inc........................... 64,500
2,000 Cobancorp, Inc................................. 58,500
3,000 Comeercial Bank N.Y............................ 73,875
1,500 Commercial Federal, Inc........................ 70,687
2,500 Community Bank System.......................... 72,500
1,400 Community Bancshares Inc., VA.................. 30,450
3,500 Community Financial Corp....................... 67,375
2,000 Community Trust Bancorp, Inc................... 52,500
9,000 + Comstock Bancorp, Inc.......................... 67,500
3,000 Covest Bancshares, Inc......................... 72,750
1,250 Crestar Financial.............................. 58,594
3,000 + D&N Financial Corp., HNCK...................... 63,375
3,000 DCB Financial, Inc............................. 60,750
800 + DNB Financial Corp............................. 21,800
3,000 Financial Bancorp Inc.......................... 67,500
500 First Citizens Bancshares, Inc................. 50,500
1,500 First Citizens Corp............................ 52,500
3,000 + First Coastal Corp............................. 39,375
2,000 First Community Banking Services............... 53,500
3,000 First Financial Corp........................... 45,750
2,000 First Hawaiian Inc............................. 79,500
2,000 First Keystone Financial....................... 64,500
2,000 First Liberty Financial........................ 50,000
1,500 First Long Island, Inc......................... 70,500
1,000 First Oak Brook Bancshares..................... 34,000
<PAGE>
SCHEDULE OF INVESTMENTS at August 31, 1997, Continued
SHARES VALUE
- ------ -----
3,000 First Saving Bancorp.......................... 71,625
1,500 First Virginia Banks.......................... 71,250
2,500 FNB Corp...................................... 79,063
4,000 FNB Rochester Corp............................ 65,000
3,000 Franklin Bank, Inc............................ 49,125
1,500 GBC Bancorp................................... 73,500
3,000 Hallmark Capital Corp......................... 77,250
4,000 Hanmi Bank.................................... 71,000
1,900 + Heritage Oaks Bancorp, Inc.................... 32,063
3,000 Hingham Institution for Savings, Inc.......... 82,125
1,500 Home Federal, Inc............................. 48,375
4,000 IBS Financial Corp............................ 68,250
2,000 Iroquois Bancorp Inc.......................... 51,500
2,000 + ITLA Capital Corp............................. 40,500
2,000 Klamath First Bancorp......................... 44,250
1,575 Lake Ariel Bancorp Inc........................ 43,509
2,000 Mahaska Investment Co......................... 65,000
3,000 + Mechanics Savings Bank, Inc................... 78,750
2,000 Mercantile Bancshare.......................... 65,000
2,400 + Northern Empire, Inc.......................... 63,000
2,600 Orange National Bancorp....................... 51,675
4,500 + Pacific Crest Capital Inc..................... 75,375
2,000 Parkvale Financial, Inc....................... 65,250
4,000 Peoples Bancshares, Inc....................... 80,000
3,000 Prestige Bancorp Inc.......................... 56,625
4,000 River Valley Bancorp.......................... 68,000
2,000 Skaneateles Bancorp, Inc...................... 57,000
5,000 Skyland Community Bank........................ 47,500
2,000 Summit Bank Corp.............................. 38,750
1,000 Tomkins County Trust, Inc..................... 37,875
2,500 Union Bancshares Ltd.......................... 66,250
1,000 Union Planters Corp........................... 55,875
3,000 + United Security Bancorp....................... 55,875
3,000 Westerfed Financial Corp...................... 78,000
3,000 + WSFS Financial, Inc........................... 55,125
------
Total Common Stocks (cost $4,415,990)......... 4,749,247
=========
REPURCHASE AGREEMENT - 5.88%
Principal
Amount
------
$295,000 Star Bank Repurchase Agreement, 5.45%, dated 9/30/97,
due 10/1/97, collateralized by $295,000 GNMA II, 7.00%,
due 1/20/24 (alue of collateral is $302,467) (proceeds
$295,045) (cost $295,000).............................. 295,000
-------
TOTAL INVESTMENTS
(Cost $4,710,990) (1)............... 100.68% $ 5,044,247
OTHER INVESTMENTS LESS LIABILITIES -0.68% (34,075)
---- -------
TOTAL NET ASSETS.................... 100.00% $ 5,010,172
====== ============
+ Non income producing security
(1) Federal Tax Information: At September 30, 1997 the net
unrealized appreciation based on cost for Federal Income
tax purposes of $4,710,990 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over cost............................................. $ 367,012
Aggregate gross unrealized depreciation for all
investments in which there was an excess of cost
over value............................................ (23,755)
-------
Net unrealized appreciation........................... $ 343,257
============
The accompanying notes are an intregal part
of these financial statements
<PAGE>
THE BANC STOCK GROUP FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
(Unaudited)
ASSETS:
Investments in securities, at value
(cost $4,710,990) (Note 2)......... $ 5,054,247
Cash.................................... 352
Receivables:
Fund shares sold................... 849,120
Dividends and interest ............ 3,766 852,886
------- ------------
Total Assets....................... 5,907,485
LIABILITIES:
Payable for securities purchased....... $ 874,178
Due to investment advuser .............. 13,135
------
Total Liabilities.................. 887,313
------------
Net Assets.............................. $ 5,020,172
=============
NET ASSETS CONSIST OF:
Capital stock, no par value;
unlimited shares authorized;
461,571 shares outstanding........ $ 4,679,507
Net investment loss................ (2,592)
Unrealized appreciation on
investments....................... 343,257
------------
Net Assets.............................. $ 5,020,172
=============
NET ASSET VALUE AND REDEMPTION
price per share
($5,020,172 / 461,571 shares
of capital stock outstanding)
(Note 5 ).......................... $ 10.88
============
COMPUTATION OF OFFERING PRICE PER SHARE
(Net asset value $10.88 / 0.96).... $ 11.33
============
The accompanying notes are an intregal part
of these financial statements
<PAGE>
THE BANC STOCK GROUP FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD AUGUST 1, 1997 (INCEPTION OF OPERATIONS)
THROUGH SEPTEMBER 30, 1997
(Unaudited)
INVESTMENT INCOME:
Dividends .......................... $ 5,871
Interest ........................... 4,672
-----
Total Income .................. 10,543
------
Expenses:
Operating expenses (Note 4) ........ 13,135
------
Total Expenses ................ 13,135
------
Net investment loss................. (2,592)
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
(Note 2)
Net realized gain (loss) from
investment transactions.......... -0-
Change in unrealized appreciation of
investments...................... 343,257
-------
Net realized and unrealized gain
on investments................... 343,257
-------
Net increase in net assets resulting
from operations.................. $ 340,665
==========
The accompanying notes are an intregal part
of these financial statements
<PAGE>
THE BANC STOCK GROUP FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD AUGUST 1, 1997 (INCEPTION OF OPERATIONS)
THROUGH SEPTEMBER 30, 1997
(Unaudited)
Net investment loss.................................... $ (2,592)
Net realized gain/(loss) from investment transactions.. -0-
Net unrealized appreciation of investments............. 343,257
---------
Net increase in net assets resulting from operations... 340,665
Net capital share transactions (Note 5 )............... 4,579,507
---------
Net increase in net assets............................. 4,920,172
NET ASSETS:
Beginning of period.................................... 100,000
---------
END OF PERIOD (including accumulated net investment
income of $0)........................................ $ 5,020,172
============
The accompanying notes are an intregal part
of these financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(Unaudited)
NOTE 1. ORGANIZATION
The Banc Stock Group Fund (the "Fund") is a series of the BSG Funds, an Ohio
business trust (the "Trust"), organized on January 14, 1997. The Fund is an
open-end, diversified management investment company under the Investment Company
Act of 1940, authorized to issue an unlimited number of shares of capital stock
in separate series, with each series representing interests in a separate
portfolio of securities and other assets, each with its own investment
objectives and policies. The investment objective of the Fund is to provide
long-term capital appreciation. The Fund seeks to achieve its objective by
investing primarily in equity securities of community banks, lending
institutions and financial services companies.
The Fund is the only current series of the BSG Funds.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements. These policies are in
conformity with generally accepted accounting principles for investment
companies. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the period. Actual results could differ from these estimates.
Security Valuation-Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price on such exchanges, or at
the last bid price in the over-the-counter market except when, in the Adviser's
opinion, the last bid price does not accurately reflect the current value of the
security. Securities for which market quotations are not readily available, or
when the Adviser determines the last bid price does not accurately reflect the
current value or when restricted securities are being valued, are valued as
determined in good faith by the Adviser, subject to review by the Board of
Trustees of the Trust.
Fixed income securities generally are valued by using market quotations, but may
be valued on the basis of prices furnished by an independent pricing service
which uses prices based upon yields or prices of comparable securities,
indications as to values from dealers, and general market conditions, when the
Adviser believes such prices accurately reflect the fair market value of the
security.
Short term investments in fixed income securities with maturities of less than
60 days when acquired, or which subsequently are within 60 days of maturity, are
valued by using the amortized cost method of valuation, which the Board has
determined will represent fair value.
Federal Income Taxes- The Fund intends to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its net investment income and any realized
capital gain. Therefore, no federal income tax provision is required.
Dividends and Distributions-The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long term capital gains and its net short
term capital gains at least once a year. Income and capital gain distributions
to shareholders are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. Those differences are
primarily due to differing treatments for net operating losses and deferral of
wash sale losses.
Security Transactions- The Fund follows industry practice and records security
transactions on the trade date. The specific identification method is used for
determining gains or losses for financial statements and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrued basis. Discount and premium on securities purchased are
amortized over the life of the respective securities.
NOTE 3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities, during the period August 1, 1997
(commencement of operations) through September 30, 1997, aggregated $4,415,990
and $0 respectively.
NOTE 4. INVESTMENT ADVISORY AGREEMENT AND OTHER RELATED PARTY TRANSACTIONS
The Trust has an agreement with Heartland Advisory Group, Inc. (the "Adviser"),
with whom certain officers and trustees of the Trust are affiliated, to serve as
investment adviser to the Fund. Under the terms of the agreement, a monthly fee
is paid to the Adviser at an annual rate of 2.50% of the average daily
net assets of the Fund. The Adviser pays all of the operating expenses of the
Fund except brokerage, taxes, interest, fees and expenses of non-interested
person trustees and extraordinary expenses. After the initial two years, this
advisory agreement is subject to an annual approval by the Trustees of the
Trust.
For the period August 1, 1997 (commencement of operations) through September 30,
1997, the Adviser earned fees of $13,135.
The Trust has agreements with American Data Services, Inc. (the "Administrator")
to provide transfer agent, administrative and fund accounting services to the
Fund. The services to be provided under the agreements include day-to-day
administration of the Fund (other than rendering investment advice), maintenance
of its records, preparation of reports, supervision of the Fund's arrangement
with its custodian and assistance in the preparation of the Fund's registration
statement under federal and state laws. For its services, the Administrator
receives a monthly fee from the Adviser equal to an average annual rate of
0.25%. For the period August 1, 1997 (commencement of operations) through
September 30, 1997, the Administrator earned fees of $1,348.
The Trust has an agreement with Banc Stock Financial Services, Inc. (the
"Distributor"), with whom certain officers and trustees of the Trust are
affiliated, to act as the principal underwriter of the Fund's shares. The
Distributor also receives brokerage commissions from the Fund for executing
portfolio purchase and sale transactions. Both the Adviser and the Distributor
are wholly owned by The Banc Stock Group, Inc. For the period August 1, 1997
(commencement of operations) through September 30, 1997 the Distributor earned
underwriter fees and brokerage commissions in the amount of $0, and $78,539,
respectively.
NOTE 5. CAPITAL STOCK
At September 30, 1997 there were an unlimited number of shares of no-par value
capital stock authorized. Transactions in capital stock during the period August
1, 1997 (commencement of operations) (1) through September 30, 1997 were as
follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
------ ------
<S> <C> <C>
Shares Sold .......................................................451,571 $4,579,507
Shares issued for reinvestment dividends and distribution
from realized gains ............................................. -0- -0-
Shares redeemed ................................................... -0- -0-
Net increase ......................................................451,571 $4,579,507
<FN>
(1) The only transaction prior to August 1, 1997 occurred on April 22, 1997
when the Adviser purchased 10,000 shares of the Fund at $10.00 per share
to establish the Trust.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE BANC STOCK GROUP FUND
FINANCIAL HIGHLIGHTS
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD)
FOR THE PERIOD AUGUST 1, 1997 (INCEPTION OF OPERATIONS)
THROUGH SEPTEMBER 30, 1997
(Unaudited)
<S> <C>
Net asset value, beginning of period ............... $ 10.00
---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) ....................... (0.01)
Net realized and unrealized gain (loss) on
investments ................................... 0.89
---------
Total from investment operations ................... 0.88
---------
LESS DISTRIBUTIONS
Dividends from net investment income ............... 0.00
Distribution from realized gains from security
transactions .................................. 0.00
---------
Total distributions ................................ 0.00
---------
Net asset value, end of period ..................... $ 10.88
=========
Total return** ..................................... 65.87% *
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (in 000's) ................ 5,020
Ratio of expenses to average net assets ............ 2.50% *
Ratio of net investment income (loss) to average
net assets .................................... (0.48)% *
Portfolio turnover rate ............................ 0.00%
Average commission rate paid ....................... $ 0.2812
<FN>
* Annualized
** Based on net asset value per share
</FN>
</TABLE>
The accompanying notes are an intregal part
of these financial statements
<PAGE>
THE BSG FUNDS
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Included in Part A: Unaudited Financial
Highlights for the period from August 1, 1997
(inception) through September 30, 1997.
Included in Part B:
(1) Audited Statement of Assets and Liabilities as of
April 22, 1997 and Report of Independent Public
Accountants.
(2) Unaudited Statement of Assets and Liabilities -
September 30, 1997.
(3) Unaudited Statement of Operations - for the
period August 1, 1997 (inception) through
September 30, 1997.
(4) Unaudited Statement of Changes in Net Assets -
for the period August 1, 1997 (inception) through
September 30, 1997.
(5) Unaudited Schedule of Investments - September 30,
1997.
(6) Notes to Financial Statements - September 30,
1997.
(7) Unaudited Financial Highlights for the period
August 1, 1997 (inception) through September 30,
1997.
(b) Exhibits
(1) (i) Copy of Registrant's Amended and Restated
Declaration of Trust is filed herewith.
(ii) Copy of Amendment No. 1 to Registrant's
Amended and Restated Declaration of Trust is
filed herewith.
(2) Copy of Registrant's By-Laws, which was filed as
an Exhibit to Registrant's Registration
Statement, is hereby incorporated by reference.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificates - None.
(5) Copy of Registrant's Management Agreement with
its Adviser, Heartland Advisory Group, Inc.,
which was filed as an Exhibit to Registrant's
Pre- Effective Amendment, is hereby incorporated
by reference.
-1-
<PAGE>
(6) Copy of Registrant's Underwriting Agreement with
Banc Stock Financial Services, Inc., which was
filed as an Exhibit to Registrant's Pre-Effective
Amendment, is hereby incorporated by reference.
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of Directors or
Officers - None.
(8) Copy of Registrant's Agreement with the
Custodian, Star Bank, N.A., which was filed as an
Exhibit to Registrant's Pre-Effective Amendment,
is hereby incorporated by reference.
(9) Other Material Contracts - None.
(10) Opinion and Consent of Brown, Cummins & Brown
Co., L.P.A., which was filed as an Exhibit to
Registrant's Pre-Effective Amendment, is hereby
incorporated by reference.
(11) Consent of McCurdy & Associates CPA's, Inc. is
filed herewith.
(12) Financial Statements Omitted from Item 23 - None.
(13) Copy of Letter of Initial Stockholder, which was
filed as an Exhibit to Registrant's Pre-Effective
Amendment, is hereby incorporated by reference.
(14) Model Plan used in Establishment of any
Retirement Plan - None.
(15) 12b-1 Distribution Expense Plan - None.
(16) Schedules for Computation of Performance
Quotations are filed herewith.
(17) Financial Data Schedule is filed herewith.
(18) Rule 18f-3 Plan - None.
(19) (i) Power of Attorney for Registrant and
Certificate with respect thereto are filed
herewith.
(ii) Powers of Attorney for Trustees and Officers
are filed herewith.
-2-
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES (AS OF SEPTEMBER 30, 1997)
- -------- ----------------------------------------------------------
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
Banc Stock Group Fund 357
ITEM 27. INDEMNIFICATION
(a) Article VI of the Registrant's Declaration of Trust
provides for indemnification of officers and Trustees as
follows:
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS,
ETC. Subject to and except as otherwise provided in the
Securities Act of 1933, as amended, and the 1940 Act, the
Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as
directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor
or otherwise (hereinafter referred to as a "Covered
Person") against all liabilities, including but not limited
to amounts paid in satisfaction of judgments, in compromise
or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or
disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or
administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, director or
trustee, and except that no Covered Person shall be
indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise
be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall
advance attorneys' fees or other expenses incurred by a
Covered Person in defending a proceeding to the full extent
permitted by the Securities Act of 1933, as amended, the
1940 Act, and Ohio Revised Code Chapter 1707, as amended.
In the event any of these laws conflict with Ohio Revised
Code Section 1701.13(E), as amended, these laws, and not
Ohio Revised Code Section 1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The
right of indemnification provided by this Article VI shall
not be exclusive of or affect any other rights to which any
such Covered Person may be entitled. As used in this
Article VI, "Covered Person" shall include such person's
heirs, executors and administrators. Nothing contained in
this article shall affect any rights to indemnification to
which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase
and maintain liability insurance on behalf of any such
person.
-3-
<PAGE>
The Registrant may not pay for insurance which protects the
Trustees and officers against liabilities rising from
action involving willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in
the conduct of their offices.
(b) The Registrant may maintain a standard mutual fund and
investment advisory professional and directors and
officers liability policy. The policy, if maintained,
would provide coverage to the Registrant, its Trustees
and officers, and could cover its Advisers, among
others. Coverage under the policy would include losses
by reason of any act, error, omission, misstatement,
misleading statement, neglect or breach of duty.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and
the Agreement and Declaration of the Registrant or the
By-Laws of the Registrant, or otherwise, the
Registrant has been advised that in the opinion of the
Securities and Exchange Commission such
indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant
of expenses incurred or paid by a trustee, officer or
controlling person of the Trust in the successful
defense of any action, suit or proceeding) is asserted
by such trustee, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against
public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
A. Heartland Advisory Group, Inc., 6230 Busch Blvd.,
Suite 201, Columbus, Ohio 43229 ("HAG"), adviser
to The BSG Funds, is a registered investment
adviser.
(1) HAG has engaged in no other business during the
past two fiscal years.
(2) The following list sets forth other substantial
business activities of the directors and
officers of HAG during the past two years.
(a) Mark A. Davis: vice president of HAG; vice
president of research, The Banc Stock
Group, Inc., the parent company of HAG,
6230 Busch Blvd., Suite 201, Columbus,
Ohio; registered principal, Banc Stock
Financial Services, Inc. ("BSFS"), a
broker-dealer, 6230 Busch Blvd., Suite 201,
Columbus, Ohio.
(b) Michael E. Guirlinger: director, president
and treasurer of HAG; director, president
and treasurer of The Banc Stock Group,
Inc.; director, vice president and
treasurer of BSFS; director, president and
treasurer of The Banc Stock Exchange of
America, Inc. ("BSE") a bank stock
information service, 6230 Busch Blvd.,
Suite 201, Columbus, Ohio; president and
treasurer of Buckeye Banc Stocks, Inc.,
("BBS") an intra-state broker-dealer, 6230
Busch Blvd., Suite 201, Columbus, Ohio.
-4-
<PAGE>
(c) Sandra L. Quinn, secretary of HAG, BBS and
BSFS; director and secretary of The Banc
Stock Group, Inc. and BSE.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) None.
(b) Banc Stock Financial Services, Inc. ("BSFS"), 6230
Busch Blvd., Suite 201, Columbus, Ohio is the
Registrant's principal underwriter. Anthony J. Reilly
is the President, Michael E. Guirlinger is the
Treasurer and Sandra L. Quinn is the Secretary of the
underwriter. Michael E. Guirlinger is the President
and a Trustee of the Registrant.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act
of 1940 and the Rules promulgated thereunder will be
maintained by the Registrant at 6230 Busch Blvd., Suite
201, Columbus, Ohio 43229 and/or by the Registrant's
Custodian, Star Bank, N.A., 425 Walnut Street, Cincinnati,
Ohio 45202, and/or transfer and shareholder service agent,
American Data Services, Inc., 24 West Carver Street,
Huntington, New York 11743.
ITEM 31. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B
None.
ITEM 32. UNDERTAKINGS
(a) Not Applicable.
(b) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy
of the Registrant's latest annual report to
shareholders, upon request and without charge.
-5-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Cincinnati, State of
Ohio, on the 31st day of October, 1997.
The BSG Funds
By:/s/ Donald S. Mendelsohn
Donald S. Mendelsohn,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Michael E. Guirlinger,
President, Treasurer and Trustee By:/s/Donald S. Mendelsohn
Donald S. Mendelsohn,
Lisa R. Hunter, Trustee Attorney-in-Fact
John M. Bobb, Trustee October 31, 1997
Virginia H. Rader, Trustee
Gary A. Radville, Trustee
-6-
<PAGE>
EXHIBIT INDEX
-------------
PAGE
----
1. Amended and Restated Declaration of Trust....................... EX-99.B1.1
2. Amendment No. 1 to Amended and Restated Declaration of Trust ... EX-99.B1.2
3. Consent of McCurdy & Associates CPA's, Inc...................... EX-99.B11
4. Schedules for Computation of Performance Quotations............. EX-99.B16
5. Financial Data Schedule......................................... EX-27
6. Powers of Attorney.............................................. EX-99.POA
-7-
THE BSG FUNDS
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
<PAGE>
THE BSG FUNDS
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS............................................1
Section 1.1 Name......................................................1
Section 1.2 Definitions...............................................1
(a) The "Trust"...............................................1
(b) "Trustees"................................................1
(c) "Shares"..................................................1
(d) "Series"..................................................1
(e) "Class"...................................................1
(f) "Shareholder".............................................1
(g) The "1940 Act"............................................2
(h) "Commission"..............................................2
(i) "Declaration of Trust"....................................2
(j) "By-Laws".................................................2
ARTICLE II - PURPOSE OF TRUST...............................................2
ARTICLE III - THE TRUSTEE...................................................2
Section 3.1 Number, Designation, Election, Term, etc...................2
(a) Initial Trustee...........................................2
(b) Number....................................................2
(c) Term......................................................2
(d) Resignation and Retirement................................2
(e) Removal...................................................3
(f) Vacancies.................................................3
(g) Effect of Death, Resignation, etc.........................3
(h) No Accounting.............................................3
Section 3.2 Powers of Trustees..............................3
(a) Investments...............................................4
(b) Disposition of Assets.....................................4
(c) Ownership Powers..........................................4
(d) Subscription..............................................4
(e) Form of Holding...........................................4
(f) Reorganization, etc.......................................5
- i -
<PAGE>
(g) Voting Trusts, etc.......................................5
(h) Compromise...............................................5
(i) Partnerships, etc........................................5
(j) Borrowing and Security...................................5
(k) Guarantees, etc..........................................5
(l) Insurance................................................5
(m) Pensions, etc............................................5
Section 3.3 Certain Contracts.........................................6
(a) Advisory..................................................6
(b) Administration............................................6
(c) Distribution..............................................6
(d) Custodian and Depository..................................6
(e) Transfer and Dividend Disbursing Agency...................6
(f) Shareholder Servicing.....................................7
(g) Accounting................................................7
Section 3.4 Payment of Trust Expenses and Compensation of Trustees....8
Section 3.5 Ownership of Assets of the Trust..........................8
ARTICLE IV - SHARES........................................................8
Section 4.1 Description of Shares.....................................8
Section 4.2 Establishment and Designation of Series or Classes........9
(a) Assets Belonging to Series................................9
(b) Liabilities Belonging to Series..........................10
(c) Dividends................................................10
(d) Liquidation..............................................11
(e) Voting...................................................11
(f) Redemption by Shareholder................................12
(g) Redemption by Trust......................................12
(h) Net Asset Value..........................................12
(i) Transfer.................................................13
(j) Equality.................................................13
(k) Fractions................................................13
(l) Conversion Rights........................................13
Section 4.3 Ownership of Shares......................................13
Section 4.4 Investments in the Trust.................................13
Section 4.5 No Preemptive Rights.....................................14
Section 4.6 Status of Shares and Limitation of Personal Liability....14
- ii -
<PAGE>
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS......................14
Section 5.1 Voting Powers............................................14
Section 5.2 Meetings.................................................14
Section 5.3 Record Dates.............................................15
Section 5.4 Quorum and Required Vote.................................15
Section 5.5 Action by Written Consent................................15
Section 5.6 Inspection of Records....................................16
Section 5.7 Additional Provisions....................................16
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION.....................16
Section 6.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice........................................16
Section 6.2 Trustee's Good Faith Action; Expert Advice;
No Bond or Surety.....................................16
Section 6.3 Indemnification of Shareholders..........................17
Section 6.4 Indemnification of Trustees, Officers, etc...............17
Section 6.5 Advances of Expenses.....................................17
Section 6.6 Indemnification Not Exclusive, etc.......................17
Section 6.7 Liability of Third Persons Dealing with Trustees.........18
ARTICLE VII - MISCELLANEOUS...............................................18
Section 7.1 Duration and Termination of Trust........................18
Section 7.2 Reorganization...........................................18
Section 7.3 Amendments...............................................18
Section 7.4 Filing of Copies; References; Headings...................19
Section 7.5 Applicable Law...........................................19
- iii -
<PAGE>
THE BSG FUNDS
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
The undersigned, pursuant to a unanimous vote of the Trustees of the
Trust and the sole consent of the Shareholder of the Trust, being an officer of
The BSG Funds (the "Trust"), which was organized pursuant to an Agreement and
Declaration of Trust made at Columbus, Ohio on the 14th day of January, 1997 by
the undersigned, hereby amends and restates the Agreement and Declaration of
Trust of The BSG Funds effective as of May 28, 1997, as follows:
WITNESSETH:
WHEREAS, this Trust is being formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of an Ohio business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.1 NAME. This Trust shall be known as "The BSG Funds" and
the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
SECTION 1.2 DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Ohio business trust established
by this Agreement and Declaration of Trust, as amended from
time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein
or elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust, shall be
divided from time to time, including the shares of any and
all Series or Classes which may be established by the
Trustees, and includes fractions of Shares as well as whole
Shares;
(d) "Series" refers to Series of Shares established and
designated under or in accordance with the provisions of
Article IV;
(e) "Class" refers to a class or sub-series of any Series of
Shares established and designated under and in accordance
with the provisions of Article IV;
(f) "Shareholder" means a record owner of Shares;
<PAGE>
(g) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended
from time to time;
(h) "Commission" shall have the meaning given it in the 1940
Act;
(i) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to
time; and
(j) "By-Laws" shall mean the By-Laws of the Trust as amended
from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company, to
offer Shareholders one or more investment programs primarily in securities and
debt instruments and to engage in any and all lawful acts or activities for
which business trusts may be formed under Chapter 1746 of the Ohio Revised Code.
ARTICLE III
THE TRUSTEES
SECTION 3.1 NUMBER, DESIGNATION, ELECTION, TERM, ETC.
----------- -----------------------------------------
(a) INITIAL TRUSTEES. Upon his execution of this Declaration of
Trust or a counterpart hereof or some other writing in
which he accepts such Trusteeship and agrees to the
provisions hereof, Michael Guirlinger shall become Trustee
hereof.
(b) NUMBER. The Trustees serving as such, whether named above
or hereafter becoming a Trustee, may increase or decrease
the number of Trustees to a number other than the number
theretofore determined. No decrease in the number of
Trustees shall have the effect of removing any Trustee from
office prior to the expiration of his term, but the number
of Trustees may be decreased in conjunction with the
removal of a Trustee pursuant to subsection (e) of this
Section 3.1.
(c) TERM. Each Trustee shall serve as a Trustee during the
lifetime of the Trust and until its termination as
hereinafter provided or until such Trustee sooner dies,
resigns, retires or is removed. The Trustees may elect
their own successors and may, pursuant to Section 3.1(f)
hereof, appoint Trustees to fill vacancies; provided that,
immediately after filling a vacancy, at least two-thirds of
the Trustees then holding office shall have been elected to
such office by the Shareholders at an annual or special
meeting. If at any time less than a majority of the
Trustees then holding office were so elected, the Trustees
shall forthwith cause to be held as promptly as possible,
and in any event within 60 days, a meeting of Shareholders
for the purpose of electing Trustees to fill any existing
vacancies.
(d) RESIGNATION AND RETIREMENT. Any Trustee may resign his
trust or retire as a Trustee,by written instrument signed
by him and delivered to the other Trustees or to any
officer
- 2 -
<PAGE>
of the Trust, and such resignation or retirement shall take
effect upon such delivery or upon such later date as is
specified in such instrument.
(e) REMOVAL. Any Trustee may be removed with or without cause
at any time: (i) by written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal,
specifying the date upon which such removal shall become
effective, (ii) by vote of the Shareholders holding not
less than two-thirds of the Shares then outstanding, cast
in person or by proxy at any meeting called for the
purpose, or (iii) by a declaration in writing signed by
Shareholders holding not less than two-thirds of the Shares
then outstanding and filed with the Trust's Custodian.
(f) VACANCIES. Any vacancy or anticipated vacancy resulting
from any reason, including without limitation the death,
resignation, retirement, removal or incapacity of any of
the Trustees, or resulting from an increase in the number
of Trustees by the Trustees may (but so long as there are
at least three remaining Trustees, need not unless required
by the 1940 Act) be filled either by a majority of the
remaining Trustees through the appointment in writing of
such other person as such remaining Trustees in their
discretion shall determine (unless a shareholder election
is required by the 1940 Act) or by the election by the
Shareholders, at a meeting called for the purpose, of a
person to fill such vacancy, and such appointment or
election shall be effective upon the written acceptance of
the person named therein to serve as a Trustee and
agreement by such person to be bound by the provisions of
this Declaration of Trust, except that any such appointment
or election in anticipation of a vacancy to occur by reason
of retirement, resignation, or increase in number of
Trustees to be effective at a later date shall become
effective only at or after the effective date of said
retirement, resignation, or increase in number of Trustees.
As soon as any Trustee so appointed or elected shall have
accepted such appointment or election and shall have agreed
in writing to be bound by this Declaration of Trust and the
appointment or election is effective, the Trust estate
shall vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance.
(g) EFFECT OF DEATH, RESIGNATION, ETC. The death, resignation,
retirement, removal, or incapacity of the Trustees, or any
one of them, shall not operate to annul or terminate the
Trust or to revoke or terminate any existing agency or
contract created or entered into pursuant to the terms of
this Declaration of Trust.
(h) NO ACCOUNTING. Except to the extent required by the 1940
Act or under circumstances which would justify his removal
for cause, no person ceasing to be a Trustee as a result of
his death, resignation, retirement, removal or incapacity
(nor the estate of any such person) shall be required to
make an accounting to the Shareholders or remaining
Trustees upon such cessation.
SECTION 3.2 POWERS OF TRUSTEES. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent
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that such By-Laws do not reserve that right to the Shareholders; they may as
they consider appropriate elect and remove officers and appoint and terminate
agents and consultants and hire and terminate employees, any one or more of the
foregoing of whom may be a Trustee, and may provide for the compensation of all
of the foregoing; they may appoint from their own number, and terminate, any one
or more committees consisting of two or more Trustees, including without implied
limitation an executive committee, which may, when the Trustees are not in
session and subject to the 1940 Act, exercise some or all of the power and
authority of the Trustees as the Trustees may determine; in accordance with
Section 3.3 they may employ one or more Advisers, Administrators, Depositories
and Custodians and may authorize any Depository or Custodian to employ
subcustodians or agents and to deposit all or any part of such assets in a
system or systems for the central handling of securities and debt instruments,
retain transfer, dividend, accounting or Shareholder servicing agents or any of
the foregoing, provide for the distribution of Shares by the Trust through one
or more distributors, principal underwriters or otherwise, set record dates or
times for the determination of Shareholders or certain of them with respect to
various matters; they may compensate or provide for the compensation of the
Trustees, officers, advisers, administrators, custodians, other agents,
consultants and employees of the Trust or the Trustees on such terms as they
deem appropriate; and in general they may delegate to any officer of the Trust,
to any committee of the Trustees and to any employee, adviser, administrator,
distributor, principal underwriter, depository, custodian, transfer and dividend
disbursing agent, or any other agent or consultant of the Trust such authority,
powers, functions and duties as they consider desirable or appropriate for the
conduct of the business and affairs of the Trust, including without implied
limitation the power and authority to act in the name of the Trust and of the
Trustees, to sign documents and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent
with the 1940 Act or other applicable law, the Trustees shall have power and
authority:
(a) INVESTMENTS. To invest and reinvest cash and other
property, and to hold cash or other property uninvested
without in any event being bound or limited by any present
or future law or custom in regard to investments by
trustees;
(b) DISPOSITION OF ASSETS. To sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or
all of the assets of the Trust;
(c) OWNERSHIP POWERS. To vote or give assent, or exercise any
rights of ownership, with respect to stock or other
securities, debt instruments or property; and to execute
and deliver proxies or powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation
to securities, debt instruments or property as the Trustees
shall deem proper;
(d) SUBSCRIPTION. To exercise powers and rights of subscription
or otherwise which in any manner arise out of ownership of
securities or debt instruments;
(e) FORM OF HOLDING. To hold any security, debt instrument or
property in a form not indicating any trust, whether in
bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a
custodian, subcustodian or other depository or a nominee or
nominees or otherwise;
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(f) REORGANIZATION, ETC. To consent to or participate in any
plan for the reorganization, consolidation or merger of any
corporation or issuer, any security or debt instrument of
which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by
such corporation or issuer, and to pay calls or
subscriptions with respect to any security or debt
instrument held in the Trust;
(g) VOTING TRUSTS, ETC. To join with other holders of any
securities or debt instruments in acting through a
committee, depository, voting trustee or otherwise, and in
that connection to deposit any security or debt instrument
with, or transfer any security or debt instrument to, any
such committee, depository or trustee, and to delegate to
them such power and authority with relation to any security
or debt instrument (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depository or trustee as
the Trustees shall deem proper;
(h) COMPROMISE. To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including but not limited to claims for taxes;
(i) PARTNERSHIPS, ETC. To enter into joint ventures, general or
limited partnerships and any other combinations or
associations;
(j) BORROWING AND SECURITY. To borrow funds and to mortgage and
pledge the assets of the Trust or any part thereof to
secure obligations arising in connection with such
borrowing;
(k) GUARANTEES, ETC. To endorse or guarantee the payment of any
notes or other obligations of any person; to make contracts
of guaranty or suretyship, or otherwise assume liability
for payment thereof; and to mortgage and pledge the Trust
property or any part thereof to secure any of or all such
obligations;
(l) INSURANCE. To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business, including,
without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on
its portfolio investments, and insurance policies insuring
the Shareholders, Trustees, officers, employees, agents,
consultants, investment advisers, managers, administrators,
distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected
therewith), of the Trust individually against all claims
and liabilities of every nature arising by reason of
holding, being or having held any such office or position,
or by reason of any action alleged to have been taken or
omitted by any such person in any such capacity, including
any action taken or omitted that may be determined to
constitute negligence; provided, however, that insurance
which protects the Trustees and officers against
liabilities rising from action involving willful
misfeasance, bad faith,gross negligence or reckless
disregard of the duties involved in the conduct of their
offices may not be purchased; and
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(m) PENSIONS, ETC. To pay pensions for faithful service, as
deemed appropriate by the Trustees, and to adopt, establish
and carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive
and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for
any or all of the Trustees, officers, employees and agents
of the Trust.
Except as otherwise provided by the 1940 Act or other applicable law,
this Declaration of Trust or the By-Laws, any action to be taken by the Trustees
may be taken by a majority of the Trustees present at a meeting of Trustees (a
quorum, consisting of at least a majority of the Trustees then in office, being
present), within or without Ohio, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office (or such larger
or different number as may be required by the 1940 Act or other applicable law).
SECTION 3.3 CERTAIN CONTRACTS. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their powers and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other type of organizations, or individuals
("Contracting Party") to provide for the performance and assumption of some or
all of the following services, duties and responsibilities to, for or of the
Trust and/or the Trustees, and to provide for the performance and assumption of
such other services, duties and responsibilities in addition to those set forth
below as the Trustees may determine appropriate:
(a) ADVISORY. Subject to the general supervision of the
Trustees and in conformity with the stated policy of the
Trustees with respect to the investments of the Trust or of
the assets belonging to any Series of Shares of the Trust
(as that phrase is defined in subsection (a) of Section
4.2), to manage such investments and assets, make
investment decisions with respect thereto, and to place
purchase and sale orders for portfolio transactions
relating to such investments and assets;
(b) ADMINISTRATION. Subject to the general supervision of the
Trustees and in conformity with any policies of the
Trustees with respect to the operations of the Trust, to
supervise all or any part of the operations of the Trust,
and to provide all or any part of the administrative and
clerical personnel, office space and office equipment and
services appropriate for the efficient administration and
operations of the Trust;
(c) DISTRIBUTION. To distribute the Shares of the Trust, to be
principal underwriter of such Shares, and/or to act as
agent of the Trust in the sale of Shares and the acceptance
or rejection of orders for the purchase of Shares;
(d) CUSTODIAN AND DEPOSITORY. To act as depository for and to
maintain custody of the property of the Trust and
accounting records in connection therewith;
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(e) TRANSFER AND DIVIDEND DISBURSING AGENCY. To maintain
records of the ownership of outstanding Shares, the
issuance and redemption and the transfer thereof, and to
disburse any dividends declared by the Trustees and in
accordance with the policies of the Trustees and/or the
instructions of any particular Shareholder to reinvest any
such dividends;
(f) SHAREHOLDER SERVICING. To provide service with respect to
the relationship of the Trust and its Shareholders, records
with respect to Shareholders and their Shares, and similar
matters; and
(g) ACCOUNTING. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into subcontractual arrangements relative to any of the matters referred to in
Sections 3.3(a) through (g) hereof.
Subject to the provisions of the 1940 Act, the fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter or distributor or
agent of or for any Contracting Party, or of or for any parent or
affiliate of any Contracting Party or that the Contracting Party or
any parent or affiliate thereof is a Shareholder or has an interest
in the Trust, or that
(ii) any Contracting Party may have a contract providing
for the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited
partnerships or other organizations, or has other business or
interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust and/or the
Trustees or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders, provided that in the case of any relationship or
interest referred to in the preceding clause (i) on the part of any Trustee or
officer of the Trust either (l) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good faith
reasonably justified by such facts by a majority of such Trustees not having any
such relationship or interest (even though such unrelated or disinterested
Trustees are less than a quorum of all of the Trustees), (2) the material facts
as to such relationship or interest and as to the contract have been disclosed
to or are known by the Shareholders not having such relationship or interest and
who are entitled to vote thereon and the contract involved is specifically
approved in good faith by majority vote of such Shareholders, or (3)
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the specific contract involved is fair to the Trust as of the time it is
authorized, approved or ratified by the Trustees or by such Shareholders.
SECTION 3.4 PAYMENT OF TRUST EXPENSES AND COMPENSATION OF TRUSTEES.
The Trustees are authorized to pay or to cause to be paid out of the principal
or income of the Trust, or partly out of principal and partly out of income, and
to charge or allocate the same to, between or among such one or more of the
Series and Classes that may be established and designated pursuant to Article
IV, as the Trustees deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser, administrator, distributor, principal
underwriter, auditor, counsel, depository, custodian, transfer agent, dividend
disbursing agent, accounting agent, Shareholder servicing agent, and such other
agents, consultants, and independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur. Without limiting
the generality of any other provision hereof, the Trustees shall be entitled to
reasonable compensation from the Trust for their services as Trustees and may
fix the amount of such compensation.
SECTION 3.5 OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the
assets of the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV
SHARES
SECTION 4.1 DESCRIPTION OF SHARES. The beneficial interest in the
Trust shall be divided into Shares, all without par value. The Trustees shall
have the authority from time to time to issue or reissue Shares in one or more
Series of Shares (including without limitation the Series specifically
established and designated in Section 4.2), as they deem necessary or desirable,
to establish and designate such Series, and to fix and determine the relative
rights and preferences as between the different Series of Shares as to right of
redemption and the price, terms and manner of redemption, special and relative
rights as to dividends and other distributions and on liquidation, sinking or
purchase fund provisions, conversion rights, and conditions under which the
several Series shall have separate voting rights or no voting rights.
The Shares of each Series may be issued or reissued from time to time
in one or more Classes, as determined by the Board of Trustees pursuant to
resolution. Each Class shall be appropriately designated, prior to the issuance
of any shares thereof, by some distinguishing letter, number or title. All
Shares within a Class shall be alike in every particular. All Shares of each
Series shall be of equal rank and have the same powers, preferences and rights,
and shall be subject to the same qualifications, limitations and restrictions
without distinction between the shares of different Classes thereof, except with
respect to such differences among such Classes, as the Board of Trustees shall
from time to time determine to be necessary or desirable, including, without
limitation, differences in expenses, in voting rights and in the rate or rates
of dividends or distributions. The Board of Trustees may from time to time
increase the number of Shares allocated to any Class already created by
providing that any unissued Shares of the applicable Series shall constitute
part of such Class, or may decrease the number of Shares allocated to any Class
already created by providing that any unissued Shares previously assigned to
such Class shall no longer constitute part thereof. The Board of Trustees is
hereby empowered to classify or reclassify from time to time any unissued Shares
of each Series by fixing or altering the terms thereof and by assigning such
unissued shares to an existing or newly
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created Class. Notwithstanding anything to the contrary in this paragraph the
Board of Trustees is hereby empowered (i) to redesignate any issued Shares of
any Series by assigning a distinguishing letter, number or title to such shares
and (ii) to reclassify all or any part of the issued Shares of any Series to
make them part of an existing or newly created Class.
The number of authorized Shares and the number of Shares of each
Series and Class that may be issued is unlimited, and the Trustees may issue
Shares of any Series or Class for such consideration and on such terms as they
may determine (or for no consideration if pursuant to a Share dividend or
split-up), all without action or approval of the Shareholders. All Shares when
so issued on the terms determined by the Trustees shall be fully paid and
non-assessable (but may be subject to mandatory contribution back to the Trust
as provided in subsection (h) of Section 4.2). The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series or Class into one or more Series or Classes that may be established
and designated from time to time. The Trustees may hold as treasury Shares (of
the same or some other Series), reissue for such consideration and on such terms
as they may determine, or cancel, at their discretion from time to time, any
Shares of any Series or Class reacquired by the Trust.
The Trustees may from time to time close the transfer books or
establish record dates and times for the purposes of determining the holders of
Shares entitled to be treated as such, to the extent provided or referred to in
Section 5.3.
The establishment and designation of any Series or Class of Shares in
addition to those established and designated in Section 4.2, shall be effective
upon the execution by a majority of the then Trustees of an instrument setting
forth such establishment and designation and the relative rights and preferences
of such Series or Class, or as otherwise provided in such instrument. At any
time that there are no Shares outstanding of any particular Series or Class
previously established and designated, the Trustees may by an instrument
executed by a majority of their number abolish that Series or Class and the
establishment and designation thereof. Each instrument referred to in this
paragraph shall have the status of an amendment to this Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested, may acquire, own, hold and
dispose of Shares to the same extent as if such person were not a Trustee,
officer or other agent of the Trust; and the Trust may issue and sell or cause
to be issued and sold and may purchase Shares from any such person or any such
organization subject only to the general limitations, restrictions or other
provisions applicable to the sale or purchase of Shares generally.
SECTION 4.2 ESTABLISHMENT AND DESIGNATION OF SERIES OR CLASSES.
Without limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Series, the Trustees hereby establish and
designate one Series of Shares: "Select American Bancshares Fund." The Shares of
this Series and any Shares of any further Series or Class that may from time to
time be established and designated by the Trustees shall (unless the Trustees
otherwise determine with respect to some further Series or Class at the time of
establishing and designating the same) have the following relative rights and
preferences:
(a) ASSETS BELONGING TO SERIES. All consideration received by
the Trust for the issuance or sale of Shares of a
particular Series or Class, together with all assets in
which such
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consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may
be, shall irrevocably belong to that Series or Class for
all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the
Trust. Such consideration, assets, income, earnings,
profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same
may be, together with any General Items allocated to that
Series or Class as provided in the following sentence, are
herein referred to as "assets belonging to" that Series or
Class. In the event that there are any assets, income,
earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any
particular Series or Class (collectively "General Items"),
the Trustees shall allocate such General Items to and among
any one or more of the Series or Classes established and
designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a
particular Series or Class shall belong to that Series or
Class. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series
and Classes for all purposes.
The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items
shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive
and binding upon the Shareholders.
(b) LIABILITIES BELONGING TO SERIES. The assets belonging to
each particular Series and Class thereof shall be charged
with the liabilities of the Trust in respect of that Series
or Class and all expenses, costs, charges and reserves
attributable to that Series or Class, and any general
liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to
any particular Series or Class shall be allocated and
charged by the Trustees to and among any one or more of the
Series and Classes established and designated from time to
time in such manner and on such basis as the Trustees in
their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges and reserves
allocated and so charged to a Series or Class are herein
referred to as "liabilities belonging to" that Series or
Class. Each allocation of liabilities, expenses, costs,
charges and reserves by the Trustees shall be conclusive
and binding upon the Shareholders of all Series for all
purposes.
(c) DIVIDENDS. Dividends and distributions on Shares of a
particular Series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise
pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may
determine, to the holders of Shares of that Series, from
such of the estimated income and capital gains, accrued or
realized, from the assets belonging to that Series, as the
Trustees may determine, after providing for actual and
accrued liabilities belonging to that Series. All dividends
and distributions on Shares of a particular Series shall be
distributed pro rata to the holders of that Series in
proportion to the number of Shares of that Series held by
such holders at the date and
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time of record established for the payment of such
dividends or distributions, except that in connection with
any dividend or distribution program or procedure the
Trustees may determine that no dividend or distribution
shall be payable on Shares as to which the Shareholder's
purchase order and/or payment have not been received by the
time or times established by the Trustees under such
program or procedure, and except that if Classes have been
established for any Series, the rate of dividends or
distributions may vary among such Class pursuant to
resolution, which may be a standing resolution, of the
Board of Trustees. Such dividends and distributions may be
made in cash or Shares or a combination thereof as
determined by the Trustees or pursuant to any program that
the Trustees may have in effect at the time for the
election by each Shareholder of the mode of the making of
such dividend or distribution to that Shareholder. Any such
dividend or distribution paid in Shares will be paid at the
net asset value thereof as determined in accordance with
subsection (h) of Section 4.2.
The Trust intends to qualify each Series as a "regulated
investment company" under the Internal Revenue Code of
1954, as amended, or any successor or comparable statute
thereto, and regulations promulgated thereunder. Inasmuch
as the computation of net income and gains for federal
income tax purposes may vary from the computation thereof
on the books of the Trust, the Board of Trustees shall have
the power, in its sole discretion, to distribute in any
fiscal year as dividends, including dividends designated in
whole or in part as capital gains distributions, amounts
sufficient, in the opinion of the Board of Trustees, to
enable each Series to qualify as a regulated investment
company and to avoid liability of the Series for federal
income tax in respect of that year. However, nothing in the
foregoing shall limit the authority of the Board of
Trustees to make distributions greater than or less than
the amount necessary to qualify as a regulated investment
company and to avoid liability of each Series for such tax.
(d) LIQUIDATION. In event of the liquidation or dissolution of
the Trust, the Shareholders of each Series or Class that
has been established and designated shall be entitled to
receive, as a Series or Class, when and as declared by the
Trustees, the excess of the assets belonging to that Series
or Class over the liabilities belonging to that Series or
Class. The assets so distributable to the Shareholders of
any particular Series or Class shall be distributed among
such Shareholders in proportion to the number of Shares of
that Series or Class held by them and recorded on the books
of the Trust. The liquidation of any particular Series or
Class may be authorized by vote of a majority of the
Trustees then in office subject to the approval of a
majority of the outstanding voting Shares of that Series or
Class, as defined in the 1940 Act.
(e) VOTING. All Shares shall have "equal voting rights" as such
term is defined in the Investment Company Act of 1940 and
except as otherwise provided by that Act or rules,
regulations or orders promulgated thereunder. On each
matter submitted to a vote of the Shareholders, each Series
shall vote as a separate series except (i) as to any matter
with respect to which a vote of all Series voting as a
single series is required by the 1940 Act or rules and
regulations promulgated thereunder, or would be required
under the Ohio General Corporation Law if the Trust were an
Ohio corporation; and (ii) as to any matter which the
Trustees have determined affects only the interests of
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one or more Series or Classes, only the holders of Shares
of the one or more affected Series or Classes shall be
entitled to vote thereon.
(f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a
particular Series or Class shall have the right at such
times as may be permitted by the Trust, but no less
frequently than once each week, to require the Trust to
redeem all or any part of his Shares of that Series or
Class at a redemption price equal to the net asset value
per Share of that Series or Class next determined in
accordance with subsection (h) of this Section 4.2 after
the Shares are properly tendered for redemption. Payment of
the redemption price shall be in cash; provided, however,
that if the Trustees determine, which determination shall
be conclusive, that conditions exist which make payment
wholly in cash unwise or undesirable, the Trust may make
payment wholly or partly in securities or other assets
belonging to the Series or Class of which the Shares being
redeemed are part at the value of such securities or assets
used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone
payment of the redemption price and may suspend the right
of the holders of Shares of any Series to require the Trust
to redeem Shares of that Series during any period or at any
time when and to the extent permissible under the 1940 Act,
and such redemption is conditioned upon the Trust having
funds or property legally available therefor.
(g) REDEMPTION BY TRUST. Each Share of each Series or Class
that has been established and designated is subject to
redemption by the Trust at the redemption price which would
be applicable if such Share was then being redeemed by the
Shareholder pursuant to subsection (f) of this Section
4.2:(a) at any time, if the Trustees determine in their
sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the
holders of the Shares, or any Series or Class thereof, of
the Trust, or (b) upon such other conditions as may from
time to time be determined by the Trustees and set forth in
the then current Prospectus of the Trust with respect to
maintenance of Shareholder accounts of a minimum amount.
Upon such redemption the holders of the Shares so redeemed
shall have no further right with respect thereto other than
to receive payment of such redemption price.
(h) NET ASSET VALUE. The net asset value per Share of any
Series or Class shall be the quotient obtained by dividing
the value of the net assets of that Series or Class (being
the value of the assets belonging to that Series or Class
less the liabilities belonging to that Series or Class) by
the total number of Shares of that Series or Class
outstanding, all determined in accordance with the methods
and procedures, including without limitation those with
respect to rounding, established by the Trustees from time
to time. Net asset value shall be determined separately for
each Class of a Series.
The Trustees may determine to maintain the net asset value
per Share of any Series or Class at a designated constant
dollar amount and in connection therewith may adopt
procedures not inconsistent with the 1940 Act for the
continuing declarations of income attributable to that
Series or Class as dividends payable in additional Shares
of that Series or Class at the designated constant dollar
amount and for the handling of any losses attributable to
that Series or Class . Such procedures may provide that in
the
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<PAGE>
event of any loss each Shareholder shall be deemed to have
contributed to the capital of the Trust attributable to
that Series or Class his pro rata portion of the total
number of Shares required to be canceled in order to permit
the net asset value per Share of that Series or Class to be
maintained, after reflecting such loss, at the designated
constant dollar amount. Each Shareholder of the Trust shall
be deemed to have agreed, by his investment in any Series
with respect to which the Trustees shall have adopted any
such procedure, to make the contribution referred to in the
preceding sentence in the event of any such loss.
(i) TRANSFER. All Shares of each particular Series or Class
shall be transferable, but transfers of Shares of a
particular Series or Class will be recorded on the Share
transfer records of the Trust applicable to that Series or
Class only at such times as Shareholders shall have the
right to require the Trust to redeem Shares of that Series
or Class and at such other times as may be permitted by the
Trustees.
(j) EQUALITY. All Shares of each particular Series shall
represent an equal proportionate interest in the assets
belonging to that Series (subject to the liabilities
belonging to that Series), and each Share of any particular
Series shall be equal to each other Share of that Series;
but the provisions of this sentence shall not restrict any
distinctions permissible under this Section 4.2 that may
exist with respect to a Class of the same Series. The
Trustees may from time to time divide or combine the Shares
of any particular Series or Class into a greater or lesser
number of Shares of that Series or Class without thereby
changing the proportionate beneficial interest in the
assets belonging to that Series or Class or in any way
affecting the rights of Shares of any other Series or
Class.
(k) FRACTIONS. Any fractional Share of any Series or Class, if
any such fractional Share is outstanding, shall carry
proportionately all the rights and obligations of a whole
Share of that Series or Class, including with respect to
voting, receipt of dividends and distributions, redemption
of Shares, and liquidation of the Trust.
(l) CONVERSION RIGHTS. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the
authority to provide that holders of Shares of any Series
or Class shall have the right to convert said Shares into
Shares of one or more other Series or Classes in accordance
with such requirements and procedures as may be established
by the Trustees.
SECTION 4.3 OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Series
and Class that has been established and designated. No certificates certifying
the ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Series and Class held from time to time by each such Shareholder.
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<PAGE>
SECTION 4.4 INVESTMENTS IN THE TRUST. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as they
from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.
SECTION 4.5 NO PREEMPTIVE RIGHTS. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust.
SECTION 4.6 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the Trust nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 5.1 VOTING POWERS. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust or any Series to
the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as the stockholders of an Ohio business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by the 1940 Act, this Declaration of Trust, the
By-Laws or any registration of the Trust with the Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or desirable.
There shall be no cumulative voting in the election of any Trustee or Trustees.
Shares may be voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. Until Shares are then issued and outstanding, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
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<PAGE>
SECTION 5.2 MEETINGS. Meetings (including meetings involving only the
holders of Shares of one or more but less than all Series or Classes) of
Shareholders may be called by the Trustees from time to time for the purpose of
taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Written notice of any meeting of Shareholders
shall be given or caused to be given by the Trustees by mailing such notice at
least seven days before such meeting, postage prepaid, stating the time, place
and purpose of the meeting, to each Shareholder at the Shareholder's address as
it appears on the records of the Trust. If the Trustees shall fail to call or
give notice of any meeting of Shareholders (including a meeting involving only
the holders of Shares of one or more but less than all Series or Classes) for a
period of 30 days after written application by Shareholders holding at least 25%
of the Shares then outstanding requesting a meeting be called for any other
purpose requiring action by the Shareholders as provided herein or in the
By-Laws, then Shareholders holding at least 25% of the Shares then outstanding
may call and give notice of such meeting, and thereupon the meeting shall be
held in the manner provided for herein in case of call thereof by the Trustees.
SECTION 5.3 RECORD DATES. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or (subject to any provisions permissible
under subsection (c) of Section 4.2 with respect to dividends or distributions
on Shares that have not been ordered and/or paid for by the time or times
established by the Trustees under the applicable dividend or distribution
program or procedure then in effect) to be treated as a Shareholder of record
for purposes of such other action, even though he has since that date and time
disposed of his Shares, and no Shareholder becoming such after that date and
time shall be so entitled to vote at such meeting or any adjournment thereof or
to be treated as a Shareholder of record for purposes of such other action.
SECTION 5.4 QUORUM AND REQUIRED VOTE. A majority of Shares entitled
to vote shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of Trust
permits or requires that holders of any Series or Class thereof shall vote as a
Series or Class, then a majority of the aggregate number of Shares of that
Series or Class thereof entitled to vote shall be necessary to constitute a
quorum for the transaction of business by that Series or Class. Any lesser
number shall be sufficient for adjournments. Any adjourned session or sessions
may be held, within a reasonable time after the date set for the original
meeting, without the necessity of further notice. Except when a larger vote is
required by any provision of this Declaration of Trust or the By-Laws, a
majority of the Shares voted, at a meeting at which a quorum is present, shall
decide any questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any Series or Class shall vote as a Series or Class, then a
majority of the Shares of that Series or Class voted on the matter shall decide
that matter insofar as that Series or Class is concerned.
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<PAGE>
SECTION 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of
the 1940 Act and other applicable law, any action taken by Shareholders may be
taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such other proportion thereof as shall be required by the 1940 Act or
by any express provision of this Declaration of Trust or the By-Laws) consent to
the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
SECTION 5.6 INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of an Ohio corporation under the Ohio General Corporation Law.
SECTION 5.7 ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE;
NOTICE. All persons extending credit to, contracting with or having any claim
against any Series of the Trust (or the Trust on behalf of any Series) shall
look only to the assets of that Series for payment under such credit, contract
or claim; and neither the Shareholders nor the Trustees, nor any of the Trust's
officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every note, bond, contract, instrument, certificate
or undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only by or for the
Trust or the Trustees and not personally. Nothing in this Declaration of Trust
shall protect any Trustee or officer against any liability to the Trust or the
Shareholders to which such Trustee or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee or of such
officer.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officers or officer shall give notice
that this Declaration of Trust is on file with the Secretary of the State of
Ohio and shall recite to the effect that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
SECTION 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall be liable for his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
custodian or transfer, dividend disbursing, Shareholder servicing or accounting
agent of the Trust, nor shall any
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Trustee be responsible for the act or omission of any other Trustee; (b) the
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust and their duties as Trustees, and
shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice; and (c) in discharging their
duties, the Trustees, when acting in good faith, shall be entitled to rely upon
the books of account of the Trust and upon written reports made to the Trustees
by any officer appointed by them, any independent public accountant, and (with
respect to the subject matter of the contract involved) any officer, partner or
responsible employee of a Contracting Party appointed by the Trustees pursuant
to Section 3.3. The Trustees as such shall not be required to give any bond or
surety or any other security for the performance of their duties. Nothing stated
herein is intended to detract from the protection accorded to Trustees by Ohio
Revised Code Sections 1746.08 and 1701.59, as amended from time to time.
SECTION 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder
or former Shareholder shall be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason of being or having been a
Shareholder and not because of such Shareholder's acts or omissions or for some
other reason, the Trust (upon proper and timely request by the Shareholder)
shall assume the defense against such charge and satisfy any judgment thereon,
and the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the Trust estate to be held harmless from and indemnified against
all loss and expense arising from such liability; provided that, in the event
the Trust shall consist of more than one Series, Shareholders of a particular
Series who are faced with claims or liabilities solely by reason of their status
as Shareholders of that Series shall be limited to the assets of that Series for
recovery of such loss and related expenses. The rights accruing to a Shareholder
under this Section 6.3 shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. Subject to
and except as otherwise provided in the Securities Act of 1933, as amended, and
the 1940 Act, the Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise (hereinafter referred to as a "Covered
Person") against all liabilities, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, director or trustee, and except that no
Covered Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended.
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<PAGE>
In the event any of these laws conflict with Ohio Revised Code Section
1701.13(E), as amended, these laws, and not Ohio Revised Code Section
1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
SECTION 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No
person dealing with the Trustees shall be bound to make any inquiry concerning
the validity of any transaction made or to be made by the Trustees or to see to
the application of any payments made or property transferred to the Trust or
upon its order.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by a majority of the Trustees then in office
subject to a favorable vote of a majority of the outstanding voting Shares, as
defined in the 1940 Act, of each Series voting separately by Series.
Upon termination, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or anticipated
as may be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
SECTION 7.2 REORGANIZATION. The Trustees may sell, convey and
transfer the assets of the Trust, or the assets belonging to any one or more
Series, to another trust, partnership, association or corporation organized
under the laws of any state of the United States, or to the Trust to be held as
assets belonging to another Series of the Trust, in exchange for cash, shares or
other securities (including, in the case of a transfer to another Series of the
Trust, Shares of such other Series) with such transfer being made subject to, or
with the assumption by the transferee of, the liabilities belonging to each
Series the assets of which are so transferred; provided, however, that if
shareholder approval is required by the 1940 Act, no assets belonging to any
particular Series shall be so transferred unless the terms of such transfer
shall have first been approved at a meeting called for the purpose by the
affirmative vote of the holders of a majority of the outstanding voting Shares,
as defined in the 1940 Act, of that Series. Following such transfer, the
Trustees shall distribute such cash, shares or other securities (giving due
effect to the assets and liabilities belonging to and any other differences
among the various Series the assets belonging to which have so been transferred)
among the Shareholders of the Series the assets belonging to which have been so
transferred; and if all of the assets of the Trust have been so transferred, the
Trust shall be terminated.
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SECTION 7.3 AMENDMENTS. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time so long as such
amendment does not adversely affect the rights of any Shareholder with respect
to which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the 1940 Act, by
an instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to the vote of a majority of such Trustees).
Except as provided in the first sentence of this Section 7, any amendment to
this Declaration of Trust that adversely affects the rights of Shareholders may
be adopted at any time by an instrument signed in writing by a majority of the
then Trustees (or by an officer of the Trust pursuant to the vote of a majority
of such Trustees) when authorized to so by the vote in accordance with
subsection (e) of Section 4.2 of Shareholders holding a majority of the Shares
entitled to vote; (a "Majority Shareholder Vote"); provided, however, that an
amendment that shall affect the Shareholders of one or more Series (or of one or
more Classes), but not the Shareholders of all outstanding Series (or Classes),
shall be authorized by a Majority Shareholder Vote of each Series (or Class, as
the case may be) affected, and no vote of a Series (or Class) not affected shall
be required. Subject to the foregoing, any such amendment shall be effective as
provided in the instrument containing the terms of such amendment or, if there
is no provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer to the effect that such amendment has been duly
adopted. Copies of the amendment to this Declaration of Trust shall be filed as
specified in Section 7.4. A restated Declaration of Trust, integrating into a
single instrument all of the provisions of the Declaration of Trust which are
then in effect and operative, may be executed from time to time by a majority of
the then Trustees (or by an officer of the Trust pursuant to the vote of a
majority of such Trustees) and shall be effective upon filing as specified in
Section 7.4.
SECTION 7.4 FILING OF COPIES; REFERENCES; HEADINGS. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of the State of Ohio, as well as any other governmental office where
such filing may from time to time be required, but the failure to make any such
filing shall not impair the effectiveness of this instrument or any such
amendment. Anyone dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such amendments have been made, as to the
identities of the Trustees and officers, and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were the original,
may rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this instrument as a whole
as the same may be amended or affected by any such amendments. The masculine
gender shall include the feminine and neuter genders. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.
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SECTION 7.5 APPLICABLE LAW. This Declaration of Trust is created
under and is to be governed by and construed and administered according to the
laws of the State of Ohio, including the Ohio General Corporation Law as the
same may be amended from time to time, but the reference to said Corporation Law
is not intended to give the Trust, the Trustees, the Shareholders or any other
person any right, power, authority or responsibility available only to or in
connection with an entity organized in corporate form. The Trust shall be of the
type referred to in Section 1746.01 of the Ohio Revised Code, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand in
Columbus, Ohio for himself and his assigns, as of the day and year first above
written.
/S/ MICHAEL E. GUIRLINGER
MICHAEL E. GUIRLINGER, President
STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN )
Before me, a Notary Public in and for said county and state,
personally appeared the above named MICHAEL E. GUIRLINGER, who acknowledged that
he did sign the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal on this 3RD day of November, 1997.
/S/ LISA R. HUNTER
Notary Public
My Commission Expires: 6-13-99
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AMENDMENT NO. 1
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
THE BSG FUNDS
1. Pursuant to Sections 4.2 and 7.3 of the Amended and Restated Agreement and
Declaration of Trust of The BSG Funds and effective upon execution of this
document, the undersigned, being a majority of the trustees of The BSG Funds,
hereby change the name of the "First American Bancshares Fund" series to "The
Banc Stock Group Fund."
2. This document shall have the status of an Amendment to said Amended and
Restated Agreement and Declaration of Trust, and may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
/S/ Michael E. Guirlinger
Michael E. Guirlinger
/S/Lisa R. Hunter
Lisa R. Hunter
/S/Virginia H. Rader
Virginia H. Rader
/S/Gary A. Radville
Gary A. Radville
/S/Robert W. Klockars
Robert W. Klockars
Date: MAY 30, 1997
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in
this Post-Effective Amendment No. 1 to the Registration Statement for The BSG
Funds of all references to our firm included in or made a part of this
Amendment.
McCurdy & Associates CPA's, Inc.
October 30, 1997
THE BANC STOCK GROUP FUND PERFORMANCE DATA (NON-STANDARDIZED)
9/30/97 ENDING REDEEMABLE VALUE (ERV)
DATE OF INVESTMENT 7/31/97
INITIAL INVESTMENT (P) 10,000.00
SALES LOAD PERCENTAGE 0.00
NAV@ PURCHASE DATE 10.00
SHARES PURCHASED 1,000.000
NO DIVIDENDS DECLARED
ENDING DATE 9/30/97
ENDING SHARES OWNED 1,000.000
ENDING NAV 10.88
ENDING ERV 10,880.00
AVERAGE ANNUAL TOTAL RETURN
ACTIVE DATES:
BEGINNING= 31-Jul-97 P= 10,000.00
ENDING= 30-Sep-97 ERV= 10,880.00
N= 0.17
TOTAL RETURN= 65.8721%
ERV PROOF= 10,880.00
<PAGE>
THE BANC STOCK GROUP FUND PERFORMANCE DATA (NON-STANDARDIZED)
9/30/97 ENDING REDEEMABLE VALUE (ERV)
DATE OF INVESTMENT 7/31/97
INITIAL INVESTMENT (P) 10,000.00
SALES LOAD PERCENTAGE 0.00
NAV@ PURCHASE DATE 10.00
SHARES PURCHASED 1,000.000
NO DIVIDENDS DECLARED
ENDING DATE 9/30/97
ENDING SHARES OWNED 1,000.000
ENDING NAV 10.88
ENDING ERV 10,880.00
CUMULATIVE TOTAL RETURN
ACTIVE DATES:
BEGINNING= 31-Jul-97 P= 10,000.00
ENDING= 30-Sep-97 ERV= 10,880.00
N= 1.00
TOTAL RETURN= 8.8000%
ERV PROOF= 10,880.00
<PAGE>
THE BANC STOCK GROUP FUND PERFORMANCE DATA (STANDARDIZED)
9/30/97 ENDING REDEEMABLE VALUE (ERV)
DATE OF INVESTMENT 7/31/97
INITIAL INVESTMENT (P) 10,000.00
SALES LOAD PERCENTAGE 4.00
NAV@ PURCHASE DATE 10.00
SHARES PURCHASED 960.000
NO DIVIDENDS DECLARED
ENDING DATE 9/30/97
ENDING SHARES OWNED 960.000
ENDING NAV 10.88
ENDING ERV 10,444.80
AVERAGE ANNUAL TOTAL RETURN PURSUANT TO SEC RULES
ACTIVE DATES:
BEGINNING= 31-Jul-97 P= 10,000.00
ENDING= 30-Sep-97 ERV= 10,444.80
N= 0.17
TOTAL RETURN= 29.8377%
ERV PROOF= 10,444.80
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 4,710,990
<INVESTMENTS-AT-VALUE> 5,054,247
<RECEIVABLES> 852,886
<ASSETS-OTHER> 352
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,907,485
<PAYABLE-FOR-SECURITIES> 874,178
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,135
<TOTAL-LIABILITIES> 5,020,172
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,679,507
<SHARES-COMMON-STOCK> 461,571
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (2,592)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 343,257
<NET-ASSETS> 5,020,172
<DIVIDEND-INCOME> 5,871
<INTEREST-INCOME> 4,672
<OTHER-INCOME> 0
<EXPENSES-NET> 13,135
<NET-INVESTMENT-INCOME> (2,592)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 343,257
<NET-CHANGE-FROM-OPS> 340,665
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,579,507
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,920,172
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 13,135
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,135
<AVERAGE-NET-ASSETS> 3,226,152
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 0.89
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.88
<EXPENSE-RATIO> 2.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS:
WHEREAS, The BSG Funds, a business trust organized under the laws of
the State of Ohio (hereinafter referred to as the "Trust"), proposes to file
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, as amended, its
Registration Statement, and periodically file amendments to its Registration
Statement;
NOW, THEREFORE, the Trust hereby constitutes and appoints JAMES R.
CUMMINS and DONALD S. MENDELSOHN, and each of them, its attorneys for it and in
its name, place and stead, to execute and file such Registration Statement and
any Amendment or Amendments to the Trust's Registration Statement, hereby giving
and granting to said attorneys full power and authority to do and perform all
and every act and thing whatsoever requisite and necessary to be done in and
about the premises as fully to all intents and purposes as it might or could do
if personally present at the doing thereof, hereby ratifying and confirming all
that said attorneys may or shall lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the Trust has caused its name to be subscribed
hereto by the President this 4th day of February, 1997.
ATTEST: The BSG Funds
/s/ Elise R. Hunter By: /s/ Michael E. Guirlinger
ELISE R. HUNTER, Secretary MICHAEL E. GUIRLINGER, President
STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN )
Before me, a Notary Public, in and for said county and state,
personally appeared MICHAEL E. GUIRLINGER, President and ELISE R. HUNTER,
Secretary, who represented that they are duly authorized in the premises, and
who are known to me to be the persons described in and who executed the
foregoing instrument, and they duly acknowledged to me that they executed and
delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 4th day of February 1997.
/s/
Notary Public
Commission Expires: 1/21/2002
<PAGE>
CERTIFICATE
The undersigned, Secretary of The BSG Funds, hereby certifies that the
following resolution was duly adopted by a majority of the Board of Trustees by
Action by Unanimous Consent of Trustees dated February 4th, 1997, and is in full
force and effect:
"WHEREAS, The BSG Funds, a business trust organized under the
laws of the State of Ohio (hereinafter referred to as the
"Trust"), proposes to file with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933
and the Investment Company Act of 1940, as amended, its
Registration Statement, and periodically file amendments to
its Registration Statement;
NOW, THEREFORE, the Trust hereby constitutes and appoints
JAMES R. CUMMINS and DONALD S. MENDELSOHN, and each of them,
its attorneys for it and in its name, place and stead, to
execute and file such Registration Statement and any Amendment
or Amendments to the Trust's Registration Statement, hereby
giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever
requisite and necessary to be done in and about the premises
as fully to all intents and purposes as it might or could do
if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully
do or cause to be done by virtue hereof."
Dated: February 4, 1997 /s/Elise R. Hunter
Elise R. Hunter, Secretary
The BSG Funds
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, The BSG Funds, a business trust organized under the laws of
the State of Ohio (hereinafter referred to as the "Trust"), proposes to file
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, as amended, its
Registration Statement, and periodically file amendments to its Registration
Statement; and
WHEREAS, the undersigned is a Trustee and the President and
Treasurer of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and
in his name, place and stead, and in his office and capacity in the Trust, to
execute and file such Registration Statement and any Amendment or Amendments to
the Trust's Registration Statement, hereby giving and granting to said attorneys
full power and authority to do and perform all and every act and thing
whatsoever requisite and necessary to be done in and about the premises as fully
to all intents and purposes as he might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 4th
day of February, 1997.
/s/ Michael E. Guirlinger
MICHAEL E. GUIRLINGER, Trustee, President
and Treasurer
STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN )
Before me, a Notary Public, in and for said county and state,
personally appeared MICHAEL E. GUIRLINGER, known to me to be the person
described in and who executed the foregoing instrument, and who acknowledged to
me that he executed and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 4th day of February, 1997.
/s/ Sandra L. Quinn
Notary Public
Commissions Expires: 1/21/2002
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, The BSG Funds, a business trust organized under the laws of
the State of Ohio (hereinafter referred to as the "Trust"), periodically files
amendments to its Registration Statement with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended; and
WHEREAS, the undersigned is a Trustee and the Secretary of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, her attorneys for her and
in her name, place and stead, and in her capacity in the Trust, to execute and
file any Amendment or Amendments to the Trust's Registration Statement, hereby
giving and granting to said attorneys full power and authority to do and perform
all and every act and thing whatsoever requisite and necessary to be done in and
about the premises as fully to all intents and purposes as she might or could do
if personally present at the doing thereof, hereby ratifying and confirming all
that said attorneys may or shall lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this
13th day of October, 1997.
/S/ LISA R. HUNTER, Trustee and Secretary
LISA R. HUNTER, Trustee and Secretary
STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN )
Before me, a Notary Public, in and for said county and state,
personally appeared LISA R. HUNTER, known to me to be the person described in
and who executed the foregoing instrument, and who acknowledged to me that she
executed and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 13th day of October, 1997.
/S/ JOANN M. STRASSER
Notary Public
My commission has no expiration date
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, The BSG Funds, a business trust organized under the laws of
the State of Ohio (hereinafter referred to as the "Trust"), periodically files
amendments to its Registration Statement with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended; and
WHEREAS, the undersigned is a Trustee of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, her attorneys for her and
in her name, place and stead, and in her capacity in the Trust, to execute and
file any Amendment or Amendments to the Trust's Registration Statement, hereby
giving and granting to said attorneys full power and authority to do and perform
all and every act and thing whatsoever requisite and necessary to be done in and
about the premises as fully to all intents and purposes as she might or could do
if personally present at the doing thereof, hereby ratifying and confirming all
that said attorneys may or shall lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this
13th day of October, 1997.
/S/ VIRGINIA H. RADER, Trustee
VIRGINIA H. RADER, Trustee
STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN )
Before me, a Notary Public, in and for said county and state,
personally appeared VIRGINIA H. RADER, known to me to be the person described in
and who executed the foregoing instrument, and who acknowledged to me that she
executed and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 13th day of October, 1997.
/S/ JOANN M. STRASSER
Notary Public
My commission has no expiration date
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, The BSG Funds, a business trust organized under the laws of
the State of Ohio (hereinafter referred to as the "Trust"), proposes to file
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, as amended,
Pre-Effective Amendment No. 1 to its Registration Statement; and
WHEREAS, the undersigned is a Trustee of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and
in his name, place and stead, and in his capacity in the Trust, to execute and
file such Pre-Effective Amendment, hereby giving and granting to said attorneys
full power and authority to do and perform all and every act and thing
whatsoever requisite and necessary to be done in and about the premises as fully
to all intents and purposes as he might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
13th day of October, 1997.
/S/JOHN M. BOBB, III, Trustee
JOHN M. BOBB, III, Trustee
STATE OF OHIO )
) ss:
COUNTY OF FRANKLIN )
Before me, a Notary Public, in and for said county and state,
personally appeared JOHN M. BOBB, III, known to me to be the person described in
and who executed the foregoing instrument, and who acknowledged to me that he
executed and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 13th day of October, 1997.
/S/ JOANN M. STRASSER
Notary Public
My commission has no expiration date
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, The BSG Funds, a business trust organized under the laws of
the State of Ohio (hereinafter referred to as the "Trust"), periodically files
amendments to its Registration Statement with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended; and
WHEREAS, the undersigned is a Trustee of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and
in his name, place and stead, and in his capacity in the Trust, to execute and
file any Amendment or Amendments to the Trust's Registration Statement, hereby
giving and granting to said attorneys full power and authority to do and perform
all and every act and thing whatsoever requisite and necessary to be done in and
about the premises as fully to all intents and purposes as he might or could do
if personally present at the doing thereof, hereby ratifying and confirming all
that said attorneys may or shall lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
29th day of October, 1997.
/S/ GARY A. RADVILLE, Trustee
GARY A. RADVILLE, Trustee
STATE OF ILLINOIS )
) ss:
COUNTY OF COOK )
Before me, a Notary Public, in and for said county and state,
personally appeared GARY A. RADVILLE, known to me to be the person described in
and who executed the foregoing instrument, and who acknowledged to me that he
executed and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 29th day of October, 1997.
/S/ DONNA M. RECUPIDO
Notary Public
My commission expires: 7/31/2001
