INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT
BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS Filed pursuant to Rule 497(a)
SUBJECT TO COMPLETION Securities Act Registration No. 333-45509
July 29, 1998 Investment Company Act Registration No. 811-08535
LIGHT REVOLUTION FUND, INC.
LIGHT REVOLUTION FUND
704 Court A
Tacoma, WA 98402
Telephone: (253) 274-0766
Toll-Free Telephone: (888) 463-3957
INVESTOR 1-888-463-3957
INFORMATION
DEPARTMENT
INVESTMENT Light Revolution Fund, Inc. (the
OBJECTIVE AND "Company") is an open-end, diversified
POLICIES management investment company, commonly
referred to as a mutual fund. The
Company currently comprises one
portfolio: the Light Revolution Fund
(the "Fund"). The Fund's investment
objective is capital appreciation. The
Fund seeks to achieve its investment
objective by investing primarily in the
common stock of large capitalization
companies in the technology sector
engaged in the processing or delivery of
information. The investment methodology
used by the Fund to achieve its
investment objective is based on the
investment methodology of the Light
Index, an index that was developed and
is published by the Light Index
Investment Company, investment adviser
to the Fund (the "Adviser"). The Light
Index consists of a diversified number
of large capitalization companies
engaged in the processing or delivery of
information. There is no assurance that
the Fund will achieve its stated
investment objective.
OPENING AN ACCOUNT To open a regular (non-retirement)
account, please complete and return the
Purchase Application. If you need
assistance in completing the Purchase
Application, please call our Investor
Information Department. The minimum
initial investment is $10,000 or $1,000
for Uniform Gifts/Transfers to Minors
Act accounts and Individual Retirement
Accounts (IRAs) (except for Education
IRAs, which have no minimum initial
investment requirement). To open an
IRA, please use a Light Revolution IRA
Application. To obtain a copy of this
form, call our Investor Information
Department at 1-888-463-3957, Monday
through Friday from 8:00 a.m. to 7:00
p.m. (Central time). Fund shares may be
purchased at a price equal to their net
asset value plus a sales charge imposed
at the time of purchase. Certain
investors may not have to pay this sales
charge and reduced sales charges are
available under certain circumstances.
Fund shares are also subject to a Rule
12b-1 plan pursuant to which an
aggregate annual fee of 0.25% is charged
on the average daily net assets of the
Fund.
ABOUT THIS This Prospectus is designed to set forth
PROSPECTUS concisely the information you should
know about the Fund before you invest.
It should be retained for future
reference. A Statement of Additional
Information ("SAI") dated _____________,
1998, containing additional information
about the Fund has been filed with the
Securities and Exchange Commission. The
SAI, which may be revised from time to
time, is incorporated by reference into
this Prospectus. Copies may be obtained,
along with other information about the
Fund, without charge by calling our
Investor Information Department at the
above-noted telephone number.
No person has been authorized to give any information
or to make any representations not contained in this
Prospectus, or in the SAI incorporated herein by
reference, in connection with the offering made by this
Prospectus and, if given or made, such information or
representations must not be relied upon as having been
authorized by the Fund or First Data Distributors, Inc.
This Prospectus does not constitute an offering by the
Fund or by First Data Distributors, Inc., in any
jurisdiction in which such offering may not lawfully be
made.
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 COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
HIGHLIGHTS 1
FEES AND EXPENSES 2
INVESTMENT OBJECTIVE AND POLICIES 3
INVESTMENT RISKS 4
IMPLEMENTATION OF POLICIES 4
Short-Term Fixed Income Securities 5
Derivative Securities 5
Foreign Securities 6
Security Lending 6
Portfolio Turnover 6
INVESTMENT RESTRICTIONS 6
MANAGEMENT 7
Fund Expenses 8
The Light Index 9
ADMINISTRATION OF THE FUND 9
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES 10
Dividends and Other Distributions 10
Taxes 10
SHARE PRICE 12
Front-End Sales Charge Waivers and Reductions 13
Temporary Waiver 13
Waivers for Certain Investors 13
Reducing Sales Charges 15
DISTRIBUTION PLAN 16
GENERAL INFORMATION 17
WHO SHOULD INVEST 17
<PAGE>
OPENING AN ACCOUNT AND PURCHASING SHARES 18
Purchasing by Mail 16
New Account 16
Additional Investments 17
Purchasing by Wire 17
Before Wiring 17
Purchasing by Telephone 17
Automatic Investment Plan 18
Choosing a Distribution Option 18
Tax Caution 18
Important Information 19
When Your Account Will Be Credited 19
SELLING YOUR SHARES 20
Selling by Mail 20
Definition of Good Order 20
Selling by Telephone 20
Systematic Withdrawal Plan 21
Important Redemption Information 21
Delivery of Redemption Proceeds 21
Minimum Account Balance Requirement 22
IMPORTANT INFORMATION ABOUT TELEPHONE TRANSACTIONS 22
OTHER ACCOUNT INFORMATION 23
TOTAL RETURN 23
<PAGE>
HIGHLIGHTS
This Prospectus describes the Light Revolution Fund
(the "Fund"). The Fund's investment objective is
capital appreciation. As with any mutual fund, there
is no assurance that the Fund will achieve its
investment objective.
INVESTMENT STRATEGY The Industrial Age was an era characterized
by a rapid increase in productivity brought
about by the ability to perform physical
work with machines. Through the use of the
steam engine and other machines, natural
resources and industrial commodities such
as coal, iron ore, lumber and oil were
brought to market at speeds never before
possible. The early years of that era came
to be known as the "Industrial Revolution."
The Information Age is an era characterized
by a rapid increase in productivity brought
about by the ability to quickly process and
deliver information. Through the
development and use of the integrated
circuit and related technologies,
information is processed and delivered to
end-users at the speed of light when
translated into "information commodities"
like electrons, radio waves, microwaves,
infrared and visible light. The Adviser
has characterized this era as the "Light
Revolution."
The Fund was formed to provide a means to
invest in a group of large capitalization
companies which, in the Adviser's opinion,
are or are expected to become leaders in
the Light Revolution. For further
information, see "Investment Objective and
Policies."
INVESTMENT RISKS The Fund is subject to stock market risk,
which is the possibility that common stock
prices will decline over short or even
extended periods. Both U.S. and foreign
stock markets tend to be cyclical, with
periods when stock prices generally rise
and periods when stock prices generally
decline. Because of the risks associated
with common stocks, the Fund is intended
to be a long-term investment vehicle and is
not designed to provide investors with a
means of speculating on short-term market
movements. In addition, the Fund is
subject to risks associated with the Fund's
focus on companies which the Adviser
believes will participate in the Light
Revolution. This sector of the economy may
be subject to greater volatility than the
stock market in general or may not
correspond to stock market movements in
general. Investors should not consider an
<PAGE>
investment in the Fund a complete
investment program, but as one component of
a diversified portfolio of investments.
For further information concerning the
risks associated with investing in the
Fund, see "Investment Risks."
INVESTMENT ADVISER The Fund receives investment advisory
services from the Light Index Investment
Company (the "Adviser") and is sponsored
and distributed by First Data Distributors,
Inc. (the "Distributor"), which is not
affiliated with the Adviser. For further
information, see "Management" and
"Distribution Plan."
FEES AND EXPENSES
The following table illustrates all expenses and fees
that you would incur as a shareholder of the Fund. The
Annual Fund Operating Expenses are estimated amounts.
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of net asset value per share)(1) 4.50%
Maximum Deferred Sales Load (as a percentage
of offering price) None
Maximum Sales Load Imposed on Reinvested Dividends None
Redemption Fees (2) None
Exchange Fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees 1.00%
12b-1 Fees (3) 0.25
Other Expenses (net of reimbursements) (4) 0.75
Total Fund Operating Expenses (net of
reimbursements) (4) 2.00%
(1) This sales charge is the maximum applicable to
purchase of shares. The Fund has decided to waive the
sales charge until the earlier of the date on which the
Fund has assets under management in an amount in excess of
$50 million, or June 30, 1999. Certain investors may not
have to pay this sales charge, and reduced sales charges
are available under certain circumstances. See "Share
Price - Front-End Sales Charge Waivers and Reductions."
(2) A fee of $12.00 is charged for each wire redemption.
(3) The distribution expenses are 0.25% per annum of the
Fund's average net assets. See "Distribution Plan." The
distribution expenses for long-term shareholders may total
more than the maximum sales charge that would have been
permissible if imposed entirely as an initial sales charge.
(4) "Other Expenses" is based on estimated amounts for the
current fiscal year. For the period ending June 30, 1999,
the Adviser has agreed to waive its management fee and/or
reimburse the Fund to the extent necessary to ensure that
the Fund's total annual operating expenses, including the
Adviser's
<PAGE>
advisory fee and the administration fee but
excluding interest, taxes, brokerage commissions and other
costs incurred in connection with the purchase and sale of
portfolio securities, and extraordinary items, do not
exceed 2.0% of the Fund's average daily net assets;
provided, however, that the Adviser is entitled to recoup
amounts waived or reimbursed for a period of up to three
years from the date such amounts were reimbursed or waived.
Absent these waivers and reimbursements, the Other Expenses
and Total Fund Operating Expenses are estimated to be ____%
and ____%, respectively.
The purpose of this table is to assist you in
understanding the various costs and expenses that you
would bear directly or indirectly as an investor in the
Fund.
The following example illustrates the expenses that you
would incur on a $1,000 investment over various
periods, assuming (1) a 5% annual rate of return and
(2) redemption at the end of each period based on
"Total Fund Operating Expenses" in the table above.
The 4.50% maximum sales charge imposed on Fund shares
is reflected in the example.
1 Year 3 Year
$64 $105
This example should not be considered a representation
of past or future expenses or performance. Actual
expenses may be higher or lower than those shown.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective presented below may not be
changed without shareholder approval. Since all
investments are subject to inherent market risks, there
is no assurance that this investment objective will be
realized.
The investment objective of the Fund is capital
appreciation. The Fund seeks to achieve its investment
objective by investing primarily in the common stock of
large capitalization companies in the technology sector
engaged in the processing or delivery of information.
The investment methodology used by the Fund to achieve
its investment objective is based on the investment
methodology developed by the Adviser in creating and
maintaining the Light Index. The Fund intends to invest
in large capitalization (i.e., a capitalization of at
least $1 billion) companies and which, in the Adviser's
opinion, are or are expected to become leaders in the
"Light Revolution" - a term created by the Adviser to
describe the transition of the world's economy from one
based on the ability to perform physical work with
machines at high speed to one based on the ability to
process and deliver information at the speed of light.
In deciding whether to buy or sell securities for the
Fund, the Adviser will consider economic fundamentals
which it gathers from the companies' financial
statements, including, but not limited to, sales
growth, R&D spending, operating margins, inventory
turnover, days sales outstanding and market share.
Sales will occur when a company is acquired by or
merged with another company and is not the surviving
entity or when, in the opinion of the Adviser, a
company is no longer a leading firm in its segment of
the market or its economic fundamentals have begun to
deteriorate.
The Fund intends to remain fully invested and under
normal circumstances the Fund intends to invest at
least 95% of its assets in common stocks and in futures
contracts and options on such stocks. The Fund will
not invest in cash reserves as part of a temporary
defensive strategy,
<PAGE>
such as lowering its investment in
common stocks to protect against potential stock market
declines. The Fund is managed without regard to tax
ramifications, and is responsible for voting the shares
of all securities it holds. See "Implementation of
Policies" for a description of these and other
investment practices of the Fund.
INVESTMENT RISKS
The Adviser has no prior experience advising a mutual
fund, but principals of the Adviser, through separate
advisory entities controlled by such principals, act as
investment advisers to individual and institutional
clients with investment portfolios of more than $90
million in the aggregate. See "Management."
IMPLEMENTATION OF POLICIES
Set forth below is a discussion concerning types of
investments in which the Fund may invest, strategies it
may employ, and a summary of related risks. A complete
listing of the Fund's investment policies and
techniques is contained in the Company's SAI. The
Fund's policies may be changed without a vote of the
Fund's shareholders. Policies and limitations are
considered at the time of purchase; the sale of
investments is not required in the event of a
subsequent change in circumstances.
Short-Term Fixed Income Securities. The Fund may
invest in certain short-term fixed income securities.
Such securities may be used to invest uncommitted cash
balances or to maintain liquidity to meet shareholder
redemptions. These securities include obligations of
the United States Government and its agencies or
instrumentalities; commercial paper, bank certificates
of deposit, and bankers' acceptances; and repurchase
agreements collateralized by these securities.
Derivative Securities. Derivative securities are
instruments whose values are linked to or derived from
an underlying security or index. The most common and
conventional types of derivative securities are futures
and options. The Fund may use stock futures contracts,
options, warrants, and swap agreements to a limited
extent. Specifically, the Fund may enter into futures
contracts and options provided that not more than 5% of
its assets are required as a margin deposit for futures
contracts or options. Furthermore, not more than 20% of
the Fund's assets are to be invested in futures and
options at any time.
The risk of loss associated with futures contracts in
some strategies can be substantial due both to the low
margin deposits required and the extremely high degree
of leverage involved in futures pricing. As a result, a
relatively small price movement in a futures contract
may result in an immediate and substantial loss or
gain. However, the Fund will not use futures contracts,
options, warrants, convertible securities or swap
agreements for speculative purposes or to leverage its
net assets. Accordingly, the primary risks associated
with the Fund's use of these investments are: (i)
imperfect correlation between the change in market
value of the stocks held by the Fund and the prices of
futures contracts and options; and (ii) possible lack
of a liquid secondary market for a futures contract and
the resulting inability to close a futures position
prior to its maturity date. The risk of imperfect
correlation will be minimized by investing only in
those contracts whose behavior is expected to resemble
that of the Fund's underlying
<PAGE>
securities. The risk that
the Fund will be unable to close out a futures position
will be minimized by entering into such transactions on
a national exchange with an active and liquid secondary
market. However, options, warrants, convertible
securities and swap agreements purchased or sold over-
the-counter may be less liquid than exchange-traded
securities.
Swap agreements are contracts between parties in which
one party agrees to make payments to the other party
based on the change in market value of a specified
index or asset. In return, the other party agrees to
make payments to the first party based on the return of
a different specified index or asset. Although swap
agreements entail the risk that a party will default on
its payment obligations thereunder, the Fund will
minimize this risk by entering into agreements that
mark to market no less frequently than quarterly. Swap
agreements also bear the risk that the Fund will not be
able to meet its obligation to the counter-party. This
risk will be mitigated by the Fund's investment in the
specific asset for which it is obligated to pay a
return.
Foreign Securities. The Fund may invest in foreign
securities. Investors should consider carefully the
substantial risks involved in investing in foreign
securities, whether made directly or through American
Depository Receipts, which are in addition to the usual
risks inherent in domestic investments. There is the
possibility of expropriation, nationalization or
confiscatory taxation, taxation of income earned in
foreign nations or other taxes imposed with respect to
investments in foreign nations, foreign exchange
controls (which may include suspension of the ability
to transfer currency from a given country), foreign
investment controls on daily stock market movements,
default in foreign government securities, political or
social instability, or diplomatic developments which
could affect investments in securities of issuers in
foreign nations. Some countries may withhold portions
of interest and dividends at the source. In addition,
in many countries there is less publicly available
information about issuers than is available in reports
about companies in the United States. Foreign
companies are not generally subject to uniform
accounting, auditing and financial reporting standards,
and auditing practices and requirements may not be
comparable to those applicable to United States
companies. The Fund may encounter difficulties or be
unable to vote proxies, exercise shareholder rights,
pursue legal remedies, and obtain judgments in foreign
courts.
Security Lending. The Fund may lend its investment
securities to qualified institutional investors for
either short-term or long-term purposes of realizing
additional income. Loans of securities by the Fund
will be collateralized by cash, letters of credit, or
securities issued or guaranteed by the U.S. Government
or its agencies. The collateral will equal at least
100% of the current market value of the loaned
securities. The Fund will limit such loans so that they
will not exceed 33 1/3% of the value of its securities.
Portfolio Turnover. A change in the investments held
by the Fund is known as "portfolio turnover."
Portfolio turnover generally involves expense to the
Fund, including brokerage commissions or dealer mark-
ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such
sales may result in the realization of taxable capital
gains. See "Dividends, Other Distributions and Taxes."
Under normal market conditions, the portfolio turnover
rate for the Fund is anticipated to be under 50%
annually.
<PAGE>
INVESTMENT RESTRICTIONS
The Company has adopted several restrictions on the
investments and other activities of the Fund that may
not be changed without shareholder approval. For
example, the Fund:
1. May not with respect to 75% of its total
assets, purchase the securities of any issuer
(except securities issued or guaranteed by
the U.S. government or its agencies or
instrumentalities) if, as a result, (i) more
than 5% of the Fund's total assets would be
invested in the securities of that issuer or
(ii) the Fund would hold more than 10% of the
outstanding voting securities of that issuer.
2. May (i) borrow money from banks and (ii) make
other investments or engage in other
transactions permissible under the Investment
Company Act of 1940 (the "1940 Act") which
may involve a borrowing, provided that the
combination of (i) and (ii) shall not exceed
33-1/3% of the value of the Fund's total
assets (including the amount borrowed), less
the Fund's liabilities (other than
borrowings). The Fund may also borrow money
from other persons to the extent permitted by
applicable law.
3. May not issue senior securities, except as
permitted under the 1940 Act.
4. May not make loans if, as a result, more than
33-1/3% of the Fund's total assets would be
lent to other persons, except through (i)
purchases of debt securities or other debt
instruments or (ii) engaging in repurchase
agreements.
5. May not purchase the securities of any issuer
if, as a result, more than 25% of the Fund's
total assets would be invested in the
securities of issuers, the principal business
activities of which are in the same industry.
The Fund does not consider all Light
Revolution companies to be in the same
industry.
MANAGEMENT
Under the laws of the state of Maryland, the Board of
Directors of the Company (the "Board of Directors") is
responsible for managing the Company's business and
affairs. The Board of Directors also oversees duties
required by applicable state and federal law. The
Company has entered into an investment advisory
agreement with the Light Index Investment Company (the
"Adviser") dated ___________________________, 1998 (the
"Advisory Agreement"), pursuant to which the Adviser
furnishes continuous investment advisory services to
the Fund. The Adviser discharges its responsibilities
subject to the supervision of the Board of Directors.
The Adviser was organized in 1997 and is located at 704
Court A, Tacoma, Washington 98402. The Adviser
supervises and manages the investment portfolio of the
Fund and, subject to such policies as the Board of
Directors may determine, directs the purchase or sale
of investment securities in the day-to-day management
of the Fund's investment portfolio. Under the Advisory
Agreement, the Adviser, at its own expense and without
reimbursement from the
<PAGE>
Fund, furnishes office space and
all necessary office facilities, equipment and
executive personnel for managing the investments of the
Fund and pays salaries and fees of all officers and
directors of the Company (except the fees paid to
directors who are not interested persons of the
Adviser). For the foregoing the Adviser receives a
monthly fee based on the Fund's average daily net
assets at the annual rate of 1.0%.
Mr. Henry Hewitt, the President of the Adviser, has
been a registered investment adviser since 1993. Mr.
Hewitt is the majority shareholder of the Adviser and
serves as the portfolio manager of the Fund. As such,
he is responsible for the day-to-day management of the
Fund. Mr. John Harrington serves as Vice President of
the Adviser. He is also President and CEO of
Harrington Investments, Inc., a registered investment
adviser in Napa, California. Mr. Harrington was
founder and Chairman of the Board of Working Assets
Management Company and President of Working Asset Money
Fund (now Citizens Trust Fund). He is also the Manager
of Global Partners, L.L.C., a venture capital fund.
Fund Expenses. The Fund will pay all of its expenses
not assumed by the Adviser including, but not limited
to, the costs of preparing and printing its
registration statements required under the Securities
Act of 1933, as amended (the "Securities Act"), and the
Investment Company Act of 1940, as amended (the "1940
Act"), and any amendments thereto, the expenses of
registering its shares with the Securities and Exchange
Commission (the "SEC") and in the various states, the
printing and distribution cost of prospectuses mailed
to existing shareholders, the cost of director and
officer liability insurance, reports to shareholders,
reports to government authorities and proxy statements,
interest charges, brokerage commissions, and expenses
incurred in connection with portfolio transactions.
The Fund will also pay the fees of directors who are
not officers of the Company, salaries of administrative
and clerical personnel, association membership dues,
auditing and accounting services, fees and expenses of
any custodian or trustees having custody of Fund
assets, expenses of calculating the net asset value and
repurchasing and redeeming shares, and charges and
expenses of dividend disbursing agents, registrars, and
share transfer agents, including the cost of keeping
all necessary shareholder records and accounts and
handling any problems relating thereto. For the period
ending June 30, 1999, the Adviser has agreed to waive
its management fee and/or reimburse the Fund to the
extent necessary to ensure that the Fund's total annual
operating expenses, including the Adviser's advisory
fee and the administration fee but excluding interest,
taxes, brokerage commissions and other costs incurred
in connection with the purchase or sale of portfolio
securities, and extraordinary items, do not exceed 2.0%
of the Fund's average daily net assets. Any such
waiver or reimbursement will have the effect of
lowering the overall expense ratio for the Fund and
increasing the Fund's overall return to investors at
the time any such amounts are waived and/or reimbursed.
For the period ending June 30, 1999, after waivers and
reimbursements, these expenses are expected to total
2.0% of the Fund's average daily net assets. The
Adviser is entitled to recoup amounts waived or
reimbursed for a period of up to three years from the
date such amounts were reimbursed or waived.
The Light Index. In addition to managing the Fund, the
Adviser manages and publishes the Light Index. The
Adviser created the Light Index which represents a
hypothetical investment of $10,000 in each of the
companies which are selected by the Adviser for
inclusion in the
<PAGE>
Light Index. The Adviser reviews on a
quarterly or more frequent basis the performance of
each company comprising the Light Index and, in its
discretion, makes additions to and deletions from the
Light Index at that time. The Light Index follows an
investment methodology (i.e., investment objective,
policies and strategies) substantially similar to the
investment methodology used in managing the Fund. To
date, the Adviser has not invested client funds on a
discretionary basis in the Light Index, but has
published the Light Index since 1994.
While the Adviser will base its investment methodology
on the investment methodology it uses in managing the
Light Index, the Fund is not an "index fund" and while
the Adviser anticipates that the Fund will be managed
in a substantially similar manner to the Adviser's
previous selection and weightings for the Light Index,
the Adviser will not attempt to identically replicate
the performance of the Light Index in managing the
Fund.
ADMINISTRATION OF THE FUND
The Fund has entered into a Fund Administration
Servicing Agreement (the "Administration Agreement")
with Firstar Trust Company, 615 East Michigan Street,
Milwaukee, Wisconsin 53202 ("Firstar"). Under the
Administration Agreement, Firstar prepares and
maintains the books, accounts and other documents
required by the Act, responds to shareholder inquiries,
prepares the Fund's financial statements and tax
returns, prepares certain reports and filings with the
SEC and with state blue sky authorities, furnishes
statistical and research data, clerical, accounting and
bookkeeping services and stationery and office
supplies, keeps and maintains the Fund's financial and
accounting records and generally assists in all aspects
of the Fund's operations. Firstar, at its own expense
and without reimbursement from the Fund, furnishes
office space and all necessary office facilities,
equipment and executive personnel for performing the
services required to be performed by it under the
Administration Agreement. For the foregoing, Firstar
receives from the Fund a fee, paid monthly at an annual
rate of .06% for the first $200 million of the Fund's
average net assets, .05% of the next $500 million of
the Fund's average net assets, and .03% of the Fund's
average net assets in excess of $700 million.
Notwithstanding the foregoing, the minimum annual fee
payable to the administrator is $30,000.
Firstar also provides custodial, transfer agency and
accounting services for the Fund. Information
regarding the fees payable by the Fund to Firstar for
these services is provided in the SAI.
Shares of the Fund are sold on a continuous basis by
the Fund's distributor, First Data Distributors, Inc.
("FDDI"), a wholly-owned subsidiary of First Data
Services Group, Inc. FDDI is a registered
broker/dealer with principal offices located at 4400
Computer Drive, Westborough, Massachusetts, 01581-5108.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
Dividends and Other Distributions. The Fund intends to
declare and pay income dividends on an annual basis.
The Fund intends to distribute net capital gains, if
any, on an annual basis in December. Dividends and
other distributions, if any, will automatically be paid
in additional
<PAGE>
shares of the Fund unless the shareholder
elects otherwise. Such election must be made in writing
to the Fund. If you elect to have distributions paid
in cash and choose to have a check mailed to you and
either the U.S. Postal Service is unable to deliver the
check to you or if the check remains outstanding for at
least six months, the Fund reserves the right to
reinvest the check in shares of the Fund at the then
current net asset value per share until you notify the
Fund of different instructions.
Taxes. The Fund intends to qualify for taxation as a
"regulated investment company" ("RIC") under the Code,
so that the Fund will not be subject to federal income
tax to the extent it distributes its income and gains
to shareholders. Dividends, whether paid in cash or
reinvested in additional shares, from net investment
income and net short-term capital gains, if any, will
be taxable to shareholders as ordinary income (unless a
shareholder is exempt from income tax or entitled to a
tax deferral), and will qualify, in part, for the 70%
dividends-received deduction for corporations, but the
portion of the Fund's dividends so qualified will
depend on the aggregate qualifying dividend income
received by the Fund from domestic (U.S.) sources.
Distributions of net capital gain (the excess of net
long-term capital gain over net short-term capital
loss) are taxable to shareholders as long-term capital
gain, whether paid in cash or additional shares, and
regardless of the length of time the shares have been
owned by the shareholder. Under the Taxpayer Relief
Act of 1997 ("Tax Act"), different maximum tax rates
apply to net capital gain depending on the taxpayer's
holding period and marginal rate of federal income tax
- - generally, 28% for gain on capital assets held for
more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) on
capital assets held for more than 18 months. The Tax
Act, however, does not address the application of these
rules to distributions of net capital gain by a RIC,
including whether those distributions may be treated by
its shareholders in accordance with the RIC's holding
period for the assets it sold that generated the gain;
the application thereof must be determined by further
legislation or future regulations that are not
available as this Prospectus is being prepared.
Accordingly, shareholders should consult their tax
advisers as to the effect of the Tax Act on
distributions by the Fund to them of net capital gain.
Capital gain distributions are not eligible for the
dividends-received deduction for corporations.
Shareholders are notified annually as to the federal
tax status of dividends and other distributions paid by
the Fund. If a shareholder is not required to pay
taxes on income, such shareholder is generally not
required to pay federal income tax on the amounts
distributed to him or her.
Any dividends and capital gain distributions declared
in December to shareholders of record on a date in that
month will be deemed to have been paid by the Fund and
received by shareholders on December 31 if the
distributions are paid before February 1 of the
following year.
When a shareholder redeems shares of the Fund, the
redemption may result in a taxable gain or loss,
depending on whether the redemption proceeds are more
or less than the shareholder's adjusted basis for the
shares. In addition, if Fund shares are bought within
thirty days before or after selling other Fund shares
at a loss, all or a portion of the loss will not be
deductible and will increase the basis of the newly
purchased shares. Capital gain on redeemed shares
<PAGE>
held
for more than one year will be long-term capital gain,
in which event it will be subject to federal income tax
at the rates indicated above.
The Fund is required by federal law to withhold 31% of
reportable payments (which includes dividends, capital
gain distributions, and redemptions) payable to
individual and certain other non-corporate shareholders
who have not complied with certain Internal Revenue
Service ("IRS") regulations. In order to avoid this
withholding requirement, you must certify on the
Account Registration Form that your Social Security or
other taxpayer identification number provided is
correct and that you are not currently subject to back-
up withholding, or that you are exempt from back-up
withholding.
Dividends and other distributions declared by the Fund,
as well as redemptions of shares, may also be subject
to state and local taxes.
The foregoing summarizes some of the important income
tax considerations generally affecting the Fund and its
shareholders. Potential investors in the Fund should
consult their tax advisers with specific reference to
their own tax situation.
SHARE PRICE
The Fund's "net asset value" per share is determined by
dividing the total market value of the Fund's
investments and other assets, less any liabilities, by
the number of outstanding shares of the Fund. The
Fund's net asset value is determined at the close of
regular trading (generally 4:00 p.m. Eastern time) each
day the New York Stock Exchange is open for trading.
Common stocks that are listed on a securities exchange
are valued at the last quoted sales price on the day
the valuation is made. Price information on listed
stocks is taken from the exchange where the security is
primarily traded. Securities which are listed on an
exchange but which are not traded on the valuation date
are valued at the most recent bid prices. Unlisted
securities for which market quotations are readily
available are valued at the latest quoted bid price.
Debt securities are valued at the latest bid prices
furnished by independent pricing services. Other
assets and securities for which no quotations are
readily available are valued at fair value as
determined in good faith by the Directors. Short-term
instruments (those with remaining maturities of 60 days
or less) are valued at amortized cost, which
approximates market.
The Fund has adopted procedures pursuant to Rule 17a-7
under the 1940 Act pursuant to which the Fund may
effect a purchase and sale transaction with an
affiliated person of the Fund (or an affiliated person
of such an affiliated person) in which the Fund issues
its shares in exchange for securities of a type which
are permitted investments for the Fund. For purposes
of determining the number of shares to be issued, the
securities to be exchanged will be valued in the manner
described above.
The Fund's shares are offered and sold on a continual
basis at the next offering price ("Offering Price"),
which is the sum of the net asset value per share and
the sales charge indicated below:
<PAGE>
Portion of
As a Percentage As a Percentage Offering
Your Investment of Offering of Your Price Retained
Price Investment by Broker-
Dealers*
Up to $50,000 4.50% 4.71% 4.00%
$ 50,001 - $100,000 4.00% 4.17% 3.50%
$100,001 - $250,000 3.00% 3.09% 2.50%
$250,001 - $500,000 2.00% 2.04% 1.50%
$500,001 - $1,000,000 1.00% 1.01% 0.50%
Over $1,000,000 None None None
* At the discretion of FDDI, all sales charges may at
times be paid to the broker-dealer, if any, involved in
the trade. A broker-dealer paid all or substantially
all of the sales charges may be deemed an "underwriter"
under the Securities Act.
No sales charge is imposed on the reinvestment of
dividends or capital gains or on certain exchange
transactions. For information on how to reduce the
sales charge payable upon the purchase of Fund shares
or whether you qualify to purchase shares at net asset
value, see "- Front-End Sales Charge Waivers and
Reductions," below. Fund shares are also currently
subject to Rule 12b-1 fees in an aggregate amount of
0.25% of the average daily net asset value of the Fund.
The Distribution Plan is described in more detail under
"Distribution Plan." Investments in Fund shares above
$1 million are not assessed an initial sales load.
Front-End Sales Charge Waivers and Reductions
Temporary Waiver. The Fund has decided to waive the
sales charge until the earlier of the date on which the
Fund has assets under management in an amount in excess
of $50 million, or June 30, 1999.
Waivers for Certain Investors. Fund shares are offered
at net asset value to the following individuals and
institutions due to anticipated economies of scale in
sales efforts and expense:
certain retirement plans, such as profit-
sharing, pension, 401(k), and simplified employee
pension plans (SEP's and SIMPLE's), subject to
minimum requirements with respect to the number of
employees or amount of purchase, which may be
established by FDDI (currently, those criteria
require that the employer establishing the plan
have 200 or more eligible employees or that the
amount of invested total at least $1 million
within 13 months of the initial investment);
directors, officers and full-time employees
of the Fund, the Adviser, FDDI and affiliates of
such companies, and spouses and minor children of
such persons;
persons who have taken a distribution from a
retirement plan invested in shares of the Fund, to
the extent the distribution, provided that, the
distribution is reinvested within 90 days of the
payment date;
government entities that are prohibited from
paying mutual fund sales charges;
<PAGE>
registered broker-dealers who have entered
into a selling or service agreement with FDDI and
who have achieved certain sales objectives of the
Fund, for their investment accounts only, and
certain employees of such broker-dealers, and
their spouses, children, grandchildren, and
parents, in accordance with the internal policies
and procedures of the employing broker-dealer;
owners of private accounts managed by Adviser
who either purchase Fund shares within one year of
the Fund's inception or who at any time, within
the Adviser's sole discretion, are no longer
eligible for separate account management by
Adviser and who in either case completely
liquidate their private account and purchase Fund
shares with the proceeds within 90 days of the
liquidation;
trust companies investing $1 million or more
for common trust or collective investment funds;
registered investment companies;
any person who purchases shares of the Fund
with redemption proceeds from a money market fund;
provided, however, that the sales charge waiver
provided by this exception shall only be available
(i) for one such purchase within 12 months of the
redemption, (ii) to persons who immediately prior
to their investment in the money market fund were
shareholders of the Fund, and (iii) to the extent
of the investment in the money market fund being
redeemed;
"wrap accounts" for the benefit of clients of
registered broker-dealers having a selling or
service agreement with the FDDI; and
any person who purchases shares of the Fund
with redemption proceeds from a registered
investment company other than the Fund and on
which the investor paid either a front-end sales
charge or a contingent deferred sales charge;
provided that the proceeds are invested in the
Fund within 10 days of the redemption.
Please contact your investment professional, FDDI, or
Firstar for more information on purchases at net asset
value.
Reducing Sales Charges. If you are not eligible for a
waiver, there are two ways that you can combine
multiple purchases of Fund shares to take advantage of
the breakpoints in the sales charge schedule.
Rights of Accumulation. The Fund offers a
Right of Accumulation ("ROA") allowing you to
purchase Fund shares at the sales charge
applicable to the sum of (a) the dollar amount
then being purchased, plus (b) the higher of
either (i) the current market value (calculated at
the applicable Offering Price) or (ii) the actual
purchase price of all Fund shares already held by
you and your spouse and minor children or you and
members of a qualified group. A "qualified group"
is one that was formed at least one year prior to
the ROA purchase, has a purpose other than buying
Fund shares at a discount, has more than 10
members, can arrange meetings between FDDI and
group members,
<PAGE>
agrees to include Fund literature
in mailings to its members, agrees to arrange for
payroll deductions or other bulk transmissions of
investments to the Fund, and meets other uniform
criteria that allow FDDI to achieve cost savings
in distributing shares of the Fund. To receive an
ROA, at the time of purchase, you must give your
investment professional, FDDI, or Firstar
sufficient information to determine whether the
purchase will qualify for the reduced sales
charge.
Letter of Intent. You may also immediately
qualify for a reduced sales charge on the purchase
of Fund shares by completing the Letter of Intent
section of the account application ("LOI"). By
completing the LOI, you express an intention to
invest during the next 13-month period a specified
amount (minimum of at least $50,001) which, if
made at one time, would qualify for a reduced
sales charge. Any shares you own on the date you
execute the LOI may be used as a credit toward the
completion of the LOI. However, the reduced sales
charge will only be applied to new purchases. Any
redemptions made during the 13-month period will
be subtracted from the amount of the purchases for
purposes of determining whether the terms of the
LOI have been satisfied. If, at the end of the 13-
month period covered by the LOI, the total amount
of purchases (less redemptions) does not equal the
amount indicated, you will be required to pay the
difference between the sales charge paid at the
reduced rate and the sales charge applicable to
the purchases actually made. Shares equal to 5%
of the amount specified in the LOI will be held in
escrow during the 13-month period and are subject
to involuntary redemption to assure any payment of
a higher applicable sales charge. By signing the
purchase application and checking the box labeled
"Letter of Intent," you grant to FDDI a security
interest in the reserved shares and appoint FDDI
as attorney-in-fact to sell any or all of the
reserved shares to cover any additional sales
charges if you do not fulfill your undertaking.
Signing a LOI does not bind you to purchase the
full amount indicated, but you must complete the
intended purchase in accordance with the terms of
the LOI to obtain the reduced sales charge. For
more information on the LOI, please contact your
investment professional, FDDI, or Firstar.
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. The Plan
authorizes payments by the Fund in connection with the
distribution of its shares at an annual rate, as
determined from time to time by the Board of Directors,
of 0.25% of the Fund's average daily net assets.
Amounts paid under the Plan by the Fund may be spent on
any activities or expenses primarily intended to result
in the sale of shares of the Fund as determined by the
Board of Directors, including but not limited to,
advertising, compensation for sales and sales marketing
activities of financial institutions and others, such
as dealers or other distributors, shareholder account
servicing, production and dissemination of prospectuses
and sales and marketing materials, and capital or other
expenses of associated equipment, rent, salaries,
bonuses, interest and other overhead. Under the terms
of the Plan, the Distributor is authorized to, in turn,
pay all or a portion of this fee to any securities
dealer, financial institution or any other person (the
"Recipient") who renders assistance in distributing or
promoting the sale of Fund shares, or who provides
certain shareholder services to Fund shareholders,
pursuant to a written agreement (the "Related
Agreement"). To the extent any
<PAGE>
activity is one which
the Fund may finance without a Plan, the Fund may also
make payments to finance such activity outside of the
Plan and not subject to its limitations. Payments
under the Plan are based upon a percentage of average
daily net assets attributable to each Fund regardless
of the amounts actually paid or expenses actually
incurred by the Distributor, however, in no event, may
such payments exceed the maximum allowable fee. It is,
therefore, possible that the Distributor may realize a
profit in a particular year as a result of these
payments. The Plan has the effect of increasing the
Fund's expenses from what they would otherwise be. The
Board of Directors reviews the Fund's distribution and
shareholder servicing fee payments in connection with
their determination as to the continuance of the Plan.
Investors should understand that the purpose and
function of the initial sales charge and distribution
fees discussed above is to provide the financing of the
distribution of the shares of the Fund.
GENERAL INFORMATION
The Company is a Maryland corporation. The Articles of
Incorporation permit the Board of Directors of the
Company to issue a total of one hundred million shares
of common stock with a $0.0001 par value, fifty million
of which have been classified as the shares of the
Fund. The Board of Directors of the Company has the
power to designate one or more classes ("series") of
shares of common stock and to classify or reclassify
any unissued shares with respect to such series.
Currently the Company is offering one class of shares.
The shares of the Fund are fully paid and non-
assessable; have no preference as to conversion,
exchange, dividends, retirement or other features; and
have no pre-emptive rights. Such shares have non-
cumulative voting rights, meaning that the holders of
more than 50% of the shares voting for the election of
directors can elect 100% of the directors if they so
choose.
Annual meetings of shareholders will not be held except
as required by the 1940 Act and other applicable law.
An annual meeting will be held to vote on the removal
of a director or directors of the Fund if requested in
writing by the holders of not less than 10% of the
outstanding shares of the Fund.
All securities and cash of the Fund are held by
Firstar, which serves as the Fund's Transfer and
Dividend Disbursing Agent. PricewaterhouseCoopers, LLP
serves as the independent accountant of the Fund and
will audit its financial statements annually. The Fund
is not involved in any litigation.
WHO SHOULD INVEST
The Fund is designed for investors seeking capital
appreciation. See "Investment Objective and Policies."
Shareholders should expect to be fully exposed to the
market risks inherent in investing in stocks. As the
prices of stocks may be volatile, only investors able
to tolerate possibly substantial fluctuations in the
value of their investment should contemplate an
investment in the Fund.
<PAGE>
Investors may wish to reduce the potential risk of
investing in the Fund by purchasing shares on a
regular, periodic basis (dollar-cost averaging) rather
than making an investment in one lump sum. See "Share
Price - Front-End Sales Charge Waivers and Reductions -
Reducing Sales Charges."
The Fund is intended to be a long-term investment
vehicle and is not designed to provide investors with a
means of speculating on short-term market movements.
Investors who engage in excessive account activity
generate additional costs which are borne by all
shareholders. In order to minimize such costs, the Fund
reserves the right to reject any purchase request that
is reasonably deemed to be disruptive to efficient
portfolio management. The Fund also reserves the right
to suspend the offering of its shares.
Investors should not consider an investment in the Fund
a complete investment program, but only as one
component of a diversified portfolio of investments.
OPENING AN ACCOUNT AND PURCHASING SHARES
You may open a regular (non-retirement) account, either
by mail or wire. Simply complete and return a Purchase
Application and any required legal documentation,
indicating the amount you wish to invest. Your
purchase must be equal to or greater than the $10,000
minimum initial investment requirement or $1,000 for
Uniform Gifts/Transfers to Minors Act accounts and
Individual Retirement Accounts (IRAs) (except for
Education IRAs, which have no minimum investment
requirements). You must open a new IRA by mail (IRAs
may not be opened by wire) using a Light Revolution IRA
Application. Your purchase must be equal to or greater
than the $1,000 minimum initial investment requirement,
but no more than $2,000 if you are making a regular IRA
contribution (no more than $500 for an Education IRA
contribution). Rollover contributions are generally
limited to the amount withdrawn within the past 60 days
from an IRA or other qualified Retirement Plan. If you
need assistance with the forms or have any questions
about the Fund, please call our Investor Information
Department at 1-888-463-3957. Note: For other types
of account registrations (e.g. corporations,
associations, other organizations, trusts or powers of
attorney), please call us to determine which additional
forms you may need.
All applications to purchase capital stock are subject
to acceptance or rejection by authorized officers of
the Fund and are not binding until accepted.
Applications will not be accepted unless accompanied by
payment in U.S. funds. Payment should be made by check
drawn on a U.S. bank, savings and loan, or credit
union. The custodian will charge a $20 fee against a
shareholder's account, in addition to any loss
sustained by the Fund, for any payment check returned
to the custodian for insufficient funds, stop payment
or account closed. It is the policy of the Fund not to
accept applications under certain circumstances, for
example, if an individual previously tried to purchase
shares with a bad check, or in amounts considered
disadvantageous to shareholders.
Because of the risks associated with common stock and
bond investments, the Fund is intended to be a long-
term investment vehicle and is not designed to provide
investors with a means of speculating on short-term
market movements. Consequently, the Fund reserves the
right to
<PAGE>
reject any specific purchase request. The
Fund also reserves the right to suspend the offering of
shares for a period of time.
The Fund's shares are purchased at the next-determined
Offering Price after your investment has been received.
See "Share Price."
Purchasing by Mail. Complete and sign the Purchase
Application.
New Account. Please include the amount of your initial
investment on the Purchase Application, make your check
payable to Light Revolution Fund and mail to:
Light Revolution Fund
c/o Firstar Trust Company
P.O. Box 701
Milwaukee, WI 53201-0701
_____________________
For express or registered mail, sent to:
Light Revolution Fund
c/o Firstar Trust Company
615 East Michigan Street
Milwaukee, WI 53202-5207
The Fund does not consider the U.S. Postal Service or
other independent delivery service to be its agent.
Therefore, deposit in the mail or with such services,
or receipt at Firstar's post office box of purchase
applications or redemption requests does not constitute
receipt by Firstar or the Fund.
Alternatively, you may place an order to purchase
shares of the Fund through a broker-dealer. Broker-
dealers may charge a transaction fee for placing orders
to purchase Fund shares. It is the responsibility of
the broker-dealer to place the order with the Fund on a
timely basis.
Additional Investments. Subsequent investments to any
account may be made by mail or wire. The minimum
subsequent investment is $100. Additional investments
should include the Additional Investment Form attached
to your Fund confirmation statements. Please make your
check payable to Light Revolution Fund, write your
account number on your check and, using the return
envelope provided, mail to one of the addresses
indicated for new accounts.
All written requests should be mailed to one of the
addresses indicated for new accounts. Do not send
registered, overnight or express mail to the post
office box address.
Purchasing by Wire. Money should be wired to:
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, WI 53202
ABA Number 0750-000-22
<PAGE>
For credit to: Firstar Trust Company
Account Number 112-952-137
For further
credit to:
Light
Revolution
Fund,
[shareholder
account
number],
[shareholder
name].
Before Wiring. To assure proper receipt, please be
sure to contact our Investor Information Department at
1-888-463-3957 before wiring and to include the above-
referenced information. If you are opening a new
account, please complete the Purchase Application and
mail it to the "New Account" address after completing
your wire arrangement. Note: Federal Funds wire
purchase orders will be accepted only when the Fund and
Firstar are open for business.
Purchasing by Telephone. The Fund lets you move money
from your bank account to your Light Revolution Fund
account by telephone transfer at your request. Only
bank accounts held at domestic financial institutions
that are Automated Clearing House ("ACH") members can
be used for telephone transactions. Telephone
transactions may not be used for initial purchases of
Fund shares, and there is a minimum purchase
requirement of $100 per telephone transaction. Your
account must already be established prior to initiating
telephone purchases. Your Fund shares will be
purchased at the net asset value determined as of the
close of regular trading on the date that Firstar
receives payment by electronic funds transfer through
the ACH System. Most transfers are completed within 3
business days. To preserve flexibility, the Fund may
revise or remove the ability to purchase shares by
phone, or may charge a fee for such service, although
currently the Fund does not expect to charge a fee.
Shareholders in the Fund may also request by telephone
a change of address, a change in investments made
through an Automatic Investment Plan, and a change in
the manner in which dividends are received.
Automatic Investment Plan. The Automatic Investment
Plan allows you to purchase shares by an electronic
transfer of funds at regular monthly intervals from
your bank checking account, money market account, NOW
account or savings account.
There is no minimum initial investment if you enroll in
the Automatic Investment Plan when you open your
account. Your account will be debited and shares will
be purchased at regular monthly intervals of your
choosing at the then-current net asset value. You may
join the Automatic Investment Plan by completing that
portion of the Purchase Application or filling out a
separate Automatic Investment Plan Application which
you may obtain from the Fund or from Firstar. You may
cancel your participation in the Automatic Investment
Plan or change the amount of purchase or the day of
each month on which shares are purchased at any time by
calling our Investor Information Department at 1-888-
463-3957 or by writing to the Fund, c/o Firstar Trust
Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
The change or cancellation by a shareholder will be
effective five business days following receipt.
<PAGE>
Each investment through the Automatic Investment Plan
must be at least $100 and not more than $50,000. For
you to participate in the Automatic Investment Plan,
your bank or other financial institution must be an ACH
member. It will take about 15 days for Firstar to
process your Automatic Investment Plan enrollment. The
Fund may modify or terminate the Automatic Investment
Plan at any time or charge a service fee, although no
such fee is currently contemplated.
Choosing a Distribution Option. You must select one of
three distribution options:
1. Automatic Reinvestment Option -- Both
dividends and capital gains
distributions will be reinvested in
additional Fund shares. This option
will be selected for you unless you
specify one of the other options.
2. Cash Dividend Option -- Your dividends
will be paid in cash and your capital
gains will be reinvested in additional
Fund shares.
3. All Cash Option -- Both dividend and
capital gains distributions will be paid
in cash.
You may change your option by calling our
Investor Information Department at 1-888-463-
3957.
Tax Caution. Investors should ask about the timing of
capital gains and dividend distributions before
investing. Under Federal tax laws, the Fund is
required to distribute net capital gains and dividend
income to Fund shareholders. These distributions are
made to all shareholders who own Fund shares as of the
distribution's record date, regardless of how long the
shares have been owned. Purchasing shares just prior
to the record date could have a significant impact on
your tax liability for the year. For example, if you
purchase Fund shares immediately prior to the record
date of a sizable capital gain or income dividend
distribution, you will be assessed taxes on the amount
of the capital gain and/or dividend distribution later
paid even though you owned the Fund shares for just a
short period of time. (Taxes are due on the
distributions even if the dividend or gain is
reinvested in additional Fund shares.) While the total
value of your investment will be the same after the
distribution - the amount of the distribution will
offset the drop in the net asset value of the shares -
you should be aware of the tax implications the timing
of your purchase may have.
Prospective investors should, therefore, inquire about
potential distributions before investing. The Fund's
annual capital gains distributions normally occur in
December, and income from dividends are generally paid
annually in December. For additional information on
distributions and taxes, see "Dividends, Capital Gains,
and Taxes."
Important Information. Certain optional Fund services
may be selected when you complete your Purchase
Application. However, the easiest way to establish
optional Fund services on your account is to call our
Investor Information Department (1-888-463-3957) for
assistance.
For our mutual protection, we may require a signature
guarantee on certain written transaction requests and
will require a signature guarantee for all written
redemptions over $25,000 and
<PAGE>
when redemption proceeds
are made payable to other than the account owner(s) or
are being sent to other than the address of record. A
signature guarantee verifies the authenticity of your
signature and may be obtained from banks, brokers and
any other guarantor that the Fund deems acceptable. A
signature guarantee cannot be provided by a notary
public.
Share certificates will be issued upon request. If a
certificate is lost, you may incur an expense to
replace it.
If you purchase shares in the Fund through a registered
broker-dealer or investment adviser, the broker-dealer
or adviser may charge a service fee.
The Fund will not cancel any trade (e.g., a purchase or
redemption) believed to be authentic, received in
writing or by telephone, once the trade has been
received.
When Your Account Will Be Credited. Your trade date is
the date on which your account is credited. If your
purchase is made by check or Federal Funds wire and is
received by the close of regular trading on the New
York Stock Exchange (generally 4:00 p.m. Eastern time),
your trade date is the day of receipt. If your
purchase is received after the close of the Exchange,
your trade date is the next business day. Your shares
are purchased at the net asset value determined on your
trade date. The Fund will not accept third-party
checks to open an account. Please be sure your
purchase check is made payable to "Light Revolution
Fund."
SELLING YOUR SHARES
You may withdraw any portion of the funds in your
account by redeeming shares at any time (please see
"-Important Redemption Information"). You may initiate
a request by writing or by telephone. Your redemption
proceeds will be mailed no later than the seventh day
after the receipt of the request in Good Order (as
defined below), except that when a purchase has been
made by check, the Fund can hold payment on redemption
until it is reasonably satisfied the check has cleared,
which may take up to 12 days. If you redeem by
telephone and request wire payment, such payment will
normally be made in Federal Funds on the next business
day. The transfer agent will charge a $12 fee to wire
redemption proceeds.
Selling by Mail. Requests should be mailed to Light
Revolution Fund, c/o Firstar Trust Company, Shareholder
Services Center, P.O. Box 701, Milwaukee, Wisconsin
53201-0701 (For express or registered mail, send your
request to Light Revolution Fund, c/o Firstar Trust
Company, 615 East Michigan Street, Milwaukee, WI 53202-
5207.)
If you are requesting a redemption of shares from an
Individual Retirement Account (IRA), you must include
instructions regarding federal income tax withholding.
Unless otherwise indicated, such a redemption, as well
as redemptions of other retirement plans not involving
a direct rollover to an eligible plan, will be subject
to federal income tax withholding.
The redemption price of shares will be the Fund's net
asset value next determined after Firstar has received
all required documents in Good Order.
Definition of Good Order. Good Order means that the
request includes the following:
<PAGE>
1. The account number and Fund name.
2. The amount of the transaction (specified
in dollars or shares).
3. Signatures of all owners exactly as they
are registered on the account.
4. Any required signature guarantees.
5. Other supporting legal documentation
that might be required in the case of
estates, corporations, trusts and
certain other accounts.
6. Any certificates you hold for the
account.
If you have questions about this definition as it
pertains to your request, please call our Investor
Information Department at 1-888-463-3957.
Selling by Telephone. To sell shares by telephone you
or your pre-authorized representative may call our
Investor Information Department at 1-888-463-3957. The
proceeds will be sent to you by mail, unless you
request wire payment. If you redeem by telephone and
request wire payment, such payment will normally be
made in Federal Funds on the next business day.
Firstar will wire redemption proceeds only to the bank
and account designated on your Purchase Application or
in written instructions subsequently received by
Firstar and only if the bank is a commercial bank
located within the United States which is an ACH
member. Firstar charges a fee (currently $12, but
subject to change without notice) for each payment made
by wire of redemption proceeds, which fee will be
deducted from your account. Please see "Important
Information About Telephone Transactions."
Systematic Withdrawal Plan. You may submit a
systematic withdrawal plan which provides for regular
monthly or quarterly checks to be sent to you (or your
designee). Shareholders owning shares of the Fund with
a value of $10,000 or more may establish a Systematic
Withdrawal Plan. A shareholder may receive monthly or
quarterly payments, in amounts of not less that $50 per
payment, by authorizing Firstar to redeem the necessary
number of shares either monthly or quarterly in order
to make the payments requested. Proceeds may either be
mailed to you or moved to your bank account by ACH
transfer. Transfers by ACH generally take up to three
business days to reach your bank account. Share
certificates for the shares being redeemed must be held
for you by Firstar. If the recipient is other than the
registered shareholder, the signature of each
shareholder must be guaranteed on the application.
Corporations or other legal entities should call
Firstar for special instructions. There is no charge
for the use of this plan. Shareholders should be aware
that such systematic withdrawals could deplete or use
up entirely the initial investment and may result in
realized long-term or short-term capital gains or
losses. The Systematic Withdrawal Plan may be
terminated at any time by the Fund upon 60 days written
notice or by a shareholder upon written notice to
Firstar. An application may be obtained from Firstar
by telephone at 1-888-463-3957. A signature guarantee
is required to convert an existing account to
systematic withdrawal. A signature guarantee verifies
the authenticity of your signature and may be obtained
from banks, brokers and any other guarantor that the
Fund deems acceptable. A signature guarantee cannot be
provided by a notary public.
<PAGE>
Important Redemption Information. Shares purchased by
check or telephone transfer may be redeemed at any
time. However, redemption proceeds will not be paid
until payment for the purchase is collected, which may
take up to ten calendar days.
Delivery of Redemption Proceeds. Redemption requests
received by telephone prior to the close of regular
trading on the New York Stock Exchange (generally 4:00
p.m. Eastern time) are processed on the day of receipt
and the redemption proceeds are normally sent on the
following business day.
Redemption requests received by telephone after the
close of the New York Stock Exchange are processed on
the business day following receipt and the proceeds are
normally sent on the second business day following
receipt. The Fund reserves the right to revise or
terminate the telephone redemption privilege at any
time.
Redemption proceeds must be sent to you within seven
days of receipt of your request in Good Order.
If you experience difficulty in making a telephone
redemption during periods of drastic economic or market
changes, your redemption request may be made by regular
or express mail. It will be implemented at the net
asset value next determined after your request has been
received by Firstar in Good Order.
The Fund may suspend the redemption right or postpone
payment at times when the New York Stock Exchange is
closed or under any emergency circumstances as
determined by the SEC.
If the Board of Directors of the Company determines
that it would be detrimental to the best interests of
the Fund's remaining shareholders to make payment in
cash, the Fund may pay redemption proceeds in whole or
in part by a distribution in kind of readily marketable
securities.
Minimum Account Balance Requirement. Due to the
relatively high cost of maintaining smaller accounts,
the Fund reserves the right to redeem shares in any
account that is below $1,000. You will be notified if
the value of your account is below this minimum account
balance requirement. You will then be allowed 30 days
to make an additional investment before the account is
liquidated. If an account is liquidated, the proceeds
will be promptly paid to the shareholder.
IMPORTANT INFORMATION ABOUT TELEPHONE TRANSACTIONS
The ability to initiate redemptions (except wire
redemptions) by telephone is automatically established
on your account unless you request in writing that
telephone transactions on your account not be
permitted.
To protect your account from losses resulting from
unauthorized or fraudulent telephone instructions, the
Fund adheres to the following security procedures:
1. Security Check. To request a transaction by
telephone, the caller must know (i) the name
of the Fund; (ii) the 10-digit account
number; (iii) the exact name
<PAGE>
and address used
in the registration; and (iv) the Social
Security or Employer Identification number
listed on the account.
2. Payment Policy. The proceeds of any
telephone redemption by mail will be made
payable to the registered share owner and
mailed to the address of record only. The
proceeds of any telephone redemption by wire
will be wired only to the bank and account
designated on the Purchase Application or in
written instructions subsequently received by
Firstar from the registered share owner and
only if the bank is a commercial bank located
within the United States.
Neither the Fund nor Firstar will be responsible for
the authenticity of transaction instructions received
by telephone, provided that reasonable security
procedures have been followed. The Fund believes that
the security procedures described above are reasonable
and that if such procedures are followed, you will bear
the risk of any losses resulting from unauthorized or
fraudulent telephone transactions on your account. If
the Fund or Firstar fails to follow reasonable security
procedures, it may be liable for any losses resulting
from unauthorized or fraudulent telephone transactions
on your account.
OTHER ACCOUNT INFORMATION
You may request transfer of the registration of any of
your Fund shares to another person by writing to:
Light Revolution Fund, c/o Firstar Trust Company,
Shareholder Services Center, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701. The request must be in Good
Order. For further instructions, please call our
Investor Information Department (1-888-463-3957).
For more information about any of these services,
please call our Investor Information Department at 1-
888-463-3957.
Firstar will send you a confirmation statement each
time you initiate a transaction in your account. You
will also receive a comprehensive account statement at
the end of each calendar quarter. The fourth-quarter
statement will be a year-end statement, listing all
transaction activity for the entire calendar year.
Financial Statements for the Fund will be mailed to you
semi-annually, according to the Fund's fiscal year-end.
TOTAL RETURN
From time to time the Fund may advertise its total
return. Total return figures are based on historical
earnings and are not intended to indicate future
performance. The "total return" of the Fund refers to
the average annual compounded rates of return over
stated periods or for the life of the Fund (as stated
in the advertisement) that would equate an initial
amount invested at the beginning of a stated period to
the ending redeemable value of the investment, assuming
the reinvestment of all dividend and capital gains
distributions. Any advertised total returns for the
Fund will take into account the effect of the deduction
of the 4.50% maximum sales charge and all recurring
fees and expenses.
<PAGE>
Performance information for the Fund advertised in
reports and promotional literature may be compared to:
(i) the S&P 500, the Dow Jones Industrial Average, or
various other unmanaged indexes, and (ii) the
performance of other mutual funds. Unmanaged indexes
may assume the reinvestment of income distributions,
but generally do not reflect deductions for sales
charges or administrative and management costs and
expenses.
