<PAGE>
As filed with the Securities 1933 Act File No. 2-75443
and Exchange Commission 1940 Act File No. 811-3359
on July 23, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
<TABLE>
<CAPTION>
<S> <C>
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 18 [X]
and/or
REGISTRATION STATEMENT UNDER [ ]
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 18 [X]
</TABLE>
WAYNE HUMMER MONEY FUND TRUST
(Exact Name of Registrant as Specified in Charter)
300 South Wacker Drive (312) 431-1700
Chicago, Illinois 60604 (Registrant's Telephone Number
(Address of Principal Executive including Area Code)
Offices, Zip Code)
Robert J. Moran, Esq.
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street, Suite 2600
Chicago, Illinois 60601
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[X] on July 25, 1997 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.
An indefinite amount of securities have been registered pursuant to Rule 24f-2
under the Investment Company Act of 1940. The Rule 24f-2 Notice for the year
ended March 31, 1997 was filed with the Securities and Exchange Commission on or
about May 22, 1997.
________________________________________________________________________________
<PAGE>
WAYNE HUMMER MONEY FUND TRUST
CROSS-REFERENCE SHEET
-----------------------------
<TABLE>
<CAPTION>
Form N-1A Item Number
- ---------------------
PART A Location in Prospectus
------ ----------------------
<S> <C> <C>
1 Cover Page Cover Page
2 Synopsis Summary of Expense
Information
3 Condensed Financial Financial Highlights;
Information Performance Information;
Supplement
4 General Description of Introduction; Investment
Registrant Objective, Policies
and Restrictions; Risks;
Supplement
5 Management of the Fund Management of the Trust;
Cover Page
5A Management's Discussion Not Applicable
of Fund Performance
6 Capital Stock and Other Description of Shares;
Securities Dividends; Taxes
7 Purchase of Securities Purchase of Shares;
Being Offered Management of the
Trust; Pricing of
Shares
8 Redemption or Repurchase Redemption of Shares
9 Pending Legal Proceedings Not Applicable
PART B Location in Statement of
------ ------------------------
Additional Information
----------------------
10 Cover Page Cover Page
11 Table of Contents Table of Contents
12 General Information and Background
History
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
13 Investment Objectives and Investment Objec-
Policies tive, Policies
and Restrictions;
Trust Investments
14 Management of the Management of the
Fund Trust
15 Control Persons and Management of the Trust
Principal Holders
of Securities
16 Investment Advisory and Management of the Trust;
Other Services Independent Auditors;
Custodian and Transfer and
Dividend Crediting Agent
17 Brokerage Allocation Management of the
and Other Practices Trust
18 Capital Stock and Other Shareholder Voting Rights
Securities
19 Purchase, Redemption and Purchase and Redemption
Pricing of Securities of Shares; Pricing of
Being Offered Shares
20 Tax Status Dividends; Taxes
21 Underwriters Management of the Trust
22 Calculation of Performance Information
Performance Data
23 Financial Statements Financial Statements and
Report of Independent
Auditors
</TABLE>
ii
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS, NOT CONTAINED IN THIS PROSPECTUS OR IN
THE STATEMENT OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFER CONTAINED
IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESEN-
TATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST, THE
INVESTMENT ADVISER, OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING IN ANY STATE IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
---------------
DISTRIBUTOR AND SHAREHOLDER SERVICE AGENT:
Wayne Hummer Investments L.L.C.
300 South Wacker Drive
Chicago, Illinois 60606
INVESTMENT ADVISER AND PORTFOLIO ACCOUNTING AGENT:
Wayne Hummer Management Company
300 South Wacker Drive
Chicago, Illinois 60606
AUDITORS:
Ernst & Young LLP
233 South Wacker Drive
Chicago, Illinois 60606
COUNSEL:
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, Illinois 60601
CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Expense Information............................................. 2
Financial Highlights....................................................... 2
Introduction............................................................... 3
Investment Objective, Policies and Restrictions............................ 3
Risks...................................................................... 4
Purchase of Shares......................................................... 4
Redemption of Shares....................................................... 6
Management of the Trust.................................................... 7
Description of Shares...................................................... 7
Pricing of Shares.......................................................... 8
Performance Information.................................................... 9
Dividends.................................................................. 9
Taxes...................................................................... 9
Reports to Shareholders.................................................... 9
</TABLE>
LOGO
Wayne
Hummer A NO-LOAD
Money MONEY MARKET FUND
Fund
Trust
300 South Wacker Drive, Chicago, Illinois 60606
The Wayne Hummer Money Fund Trust (the "Trust") is a no-load money market mu-
tual fund organized as a Massachusetts business trust. The objective of the
Trust is to maximize current income to the extent consistent with preservation
of capital and maintenance of liquidity. An investment in the Trust is not a
deposit or obligation of or guaranteed or insured by the U.S. Government, any
bank, the Federal Deposit Insurance Corporation, the Federal Reserve Board or
any other agency. There can be no assurance that the Trust will be able to
maintain a stable net asset value of $1.00 per share. Assistance with opening
an account and information about the Trust may be obtained from Wayne Hummer
Investments L.L.C. ("Wayne Hummer") at the above address or by telephone at
one of the following numbers:
CHICAGO RESIDENTS (312) 431-1700
TOLL FREE (800) 621-4477
This prospectus sets forth concisely information about the Trust that a pro-
spective investor ought to know before investing. Please read this prospectus
and retain it for future reference. A Statement of Additional Information dated
July 25, 1997 (which is incorporated herein by reference) has been filed with
the Securities and Exchange Commission. It may be obtained from the Trust at no
charge by calling one of the numbers listed above or by writing to Wayne Hummer
at the above address.
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 AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
LOGO
---------------
The date of this prospectus is July 25, 1997.
<PAGE>
LOGO
SUMMARY OF EXPENSE INFORMATION
<TABLE>
<S> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases or Reinvested Dividends......... None
Deferred Sales Load..................................................... None
Redemption Fee.......................................................... None
Exchange Fee............................................................ None
Annual Trust Operating Expenses (as a percentage of average net assets)
Management Fees......................................................... .50%
12b-1 Fees.............................................................. None
Other Expenses (primarily transfer agent, shareholder service and cus-
todian)................................................................ .24%
----
Total Trust Operating Expenses........................................ .74%
====
</TABLE>
EXAMPLE
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment, assuming (1) a 5% annual
return, and (2) redemption at the end of each
time period. As noted in the table above, the
Trust does not charge any redemption fee...... $8 $24 $41 $92
</TABLE>
The purpose of the preceding table and example is to assist investors in
understanding the various costs and expenses that an investor (referred to
herein as a "Shareholder") in the Trust will bear directly or indirectly. The
example should not be considered a representation of past or future expenses.
Actual expenses may be greater or lesser than those shown. The example assumes
a 5% annual rate of return pursuant to requirements of the Securities and
Exchange Commission and is not intended to be representative of past or future
performance of the Trust. See "Management of the Trust" and "Financial
Highlights" for further information.
FINANCIAL HIGHLIGHTS
(for a Share outstanding throughout each year)
The table below reflects the results of the Trust's operations for the ten
fiscal periods ended March 31, 1997. The Trust's audited financial statements
and information in the table for the most recent five years, including the
report thereon of Ernst & Young LLP, independent auditors, are included in the
Trust's annual report for the year ended March 31, 1997, which is incorporated
by reference into the Statement of Additional Information. The Statement of
Additional Information may be obtained from Wayne Hummer upon request and
without charge.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of year........... $1.00 $1.00 $1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income.. 0.04 0.05 0.04 0.02 0.03 0.05 0.07 0.07 0.07 0.06
Less dividends from in-
vestment income....... (0.04) (0.05) (0.04) (0.02) (0.03) (0.05) (0.07) (0.07) (0.07) (0.06)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of $1.00 $1.00 $1.00 $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
year................... ===== ===== ===== ====== ===== ===== ===== ===== ===== =====
Total return............ 4.80% 5.18% 4.24%(a) 2.47% 2.83% 4.74% 7.34% 8.47% 7.58% 6.29%
RATIOS AND SUPPLEMENTARY
DATA
Net assets, end of pe-
riod ($000's).......... 238,238 226,273 155,248 153,529 158,170 180,823 220,297 175,287 140,366 116,473
Ratio of total expenses
to average net assets.. .74% .79% .80% .80% .79% .76% .80% .82% .85% .86%
Ratio of net investment
income to average net
assets................. 4.70% 5.04% 4.16% 2.44% 2.80% 4.66% 7.06% 8.11% 7.39% 6.11%
</TABLE>
- -------
NOTE TO FINANCIAL HIGHLIGHTS:
(a) The total return includes the effect of the capital contribution of
$0.0011 per share from Wayne Hummer Investments LLC. The return without the
capital contribution would have been 4.12%.
<PAGE>
INTRODUCTION
The Trust is a no-load, diversified, open-end management investment company
organized as a Massachusetts business trust pursuant to an Agreement and
Declaration of Trust dated December 4, 1981 ("Trust Agreement"). The Trust is
designed to provide a convenient means of investing funds where the direct
purchase of money market instruments may be undesirable or impractical. An
investment in the Trust permits participation in money market instruments
(with maturities not exceeding one year from date of acquisition) while
relieving the investor of most details associated with the direct purchase of
money market instruments, such as the need to maintain bookkeeping records, to
make frequent investment decisions, to schedule maturities and to provide for
safekeeping. "No-load" means that the Trust imposes no commissions or charges
when its Shares are purchased or redeemed.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
The Trust seeks to maximize current income to the extent consistent with
preservation of capital and maintenance of liquidity. Of course, there can be
no assurance that the Trust will achieve its investment objective.
The Trust seeks to achieve its investment objective by investing exclusively
in the following types of money market instruments maturing in one year or
less from time of purchase: (1) debt securities issued or guaranteed by the
U.S. Government or by its agencies or instrumentalities (including securities
supported by the limited right of the issuer to borrow from the U.S. Treasury,
such as Federal Home Loan Bank securities, or solely by the creditworthiness
of the issuer, such as Federal National Mortgage Association debentures and
notes), and repurchase agreements/1/ with respect to any of such securities;
(2) zero coupon securities that are U.S. Treasury notes and bonds stripped of
their unmatured interest coupons, the unmatured interest coupons or interests
in such U.S. Treasury securities or coupons; (3) certificates of deposit,
variable rate certificates of deposit, time deposits, and banker's acceptances
of United States banks (excluding foreign branches) having total assets of at
least $1 billion and which are members of the Federal Deposit Insurance
Corporation; (4) commercial paper at the time of purchase rated Prime-1 by
Moody's Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's
Corporation ("S&P") or, if unrated, issued or guaranteed by a corporation with
outstanding debt rated Aa or better by Moody's or AA or better by S&P; and (5)
any other corporate notes, bonds and debentures rated Aa or better by Moody's
or AA or better by S&P at the time of purchase. In addition, the Trust limits
its investments to securities that meet the quality and diversification
requirements of Rule 2a-7 under the Investment Company Act of 1940. See the
Statement of Additional Information and its "Appendix," for a description of
commercial paper, note and bond ratings and for a more detailed description of
the money market instruments in which the Trust may invest.
Generally, the Trust will invest only in securities that are considered
liquid and that are not subject to restriction as to disposition under the
federal securities laws, except that the Trust may invest in money market
instruments issued in a private placement under Section 4(2) of the Securities
Act of 1933 ("Securities Act") and may invest up to 10% of its assets in
illiquid securities. Securities issued pursuant to Section 4(2) include
instruments similar in nature to commercial paper, but which are not entitled
to the exemption afforded commercial paper by Section 3(a)(3) of the
Securities Act because they were issued to finance other than current
transactions or were issued with a maturity greater than nine months. The
Trust's investment adviser considers Section 4(2) paper generally to be
liquid. If a particular investment in Section 4(2) paper is determined not to
be liquid, however, based on specified standards, the investment will be
included within the 10% limitation on illiquid securities. The Board of
Trustees has approved guidelines and procedures adopted by the investment
adviser and has delegated the day-to-day function of determining and
monitoring the liquidity of securities to the Trust's adviser. The Board,
however, will retain oversight and be ultimately responsible for the
determination. See "Investment Objective, Policies and Restrictions" and
"Trust Investments" in the Statement of Additional Information.
In addition to the Section 4(2) paper, other types of "restricted" money
market instruments that meet the Trust's credit, maturity and other investment
criteria (such as high quality bonds with less than one year remaining to
maturity) could be purchased or sold by the Trust in a private placement. The
Trust does not have a current intention to purchase such securities, but is
permitted to do so provided that investments in all securities considered
illiquid were not greater than 10%.
The 10% limitation on illiquid securities also would include securities for
which a readily available market may not exist and repurchase agreements
maturing in more than seven days. For a more detailed discussion of the
Trust's investment restrictions, see the Statement of Additional Information,
"Investment Objective, Policies and Restrictions."
- -------
/1/Repurchase agreements are instruments under which the Trust acquires
ownership of a security and the seller (a broker-dealer or bank) agrees to
repurchase the security at a mutually agreed upon time and price, thereby
determining the yield during the Trust's holding period. In the event of
bankruptcy or other default of a seller of a repurchase agreement the Trust
might have expenses in enforcing its rights, and could experience losses,
including a decline in the value of the underlying securities and loss of
income.
3
<PAGE>
It is the policy of the Trust to seek to maintain a net asset value of $1
per share, and, as a general policy, to hold securities until maturity. See
"RISKS." Pursuant to an exemptive order obtained from the Securities and
Exchange Commission and procedures adopted pursuant to Rule 2a-7, the Trust
values its assets on the basis of amortized cost which permits it, if the
investment adviser deems it advisable, to maintain a dollar weighted average
portfolio maturity of up to 90 days. The Trust may attempt, from time to time,
to increase its yield by trading to take advantage of variations in the
markets for short-term money market instruments. For additional information,
see the Statement of Additional Information, "Pricing of Shares."
The foregoing investment objective, policies and restrictions (as well as
certain others specified in the Statement of Additional Information) may not
be changed without the approval of the holders of a majority of the
outstanding shares of the Trust as defined under "DESCRIPTION OF SHARES."
RISKS
While the Trust intends to invest in high quality money market instruments,
these investments are not entirely without risk. An increase in interest rates
generally will reduce the value of the Trust's investments and a decline in
interest rates generally will increase their value. Redemptions of the Trust's
Shares could necessitate the sale of securities at times when such sales would
not otherwise be desirable. Because the Trust invests exclusively in short-
term high quality money market instruments, such instruments generally may not
yield as high a level of current income as longer term or lower grade
securities which generally have less liquidity and greater fluctuation in
value. Although the Trust seeks to maintain a net asset value of $1 per share,
there is no assurance that it will be able to do so. For additional risks see
the Statement of Additional Information, "Trust Investments" and "Investment
Objective, Policies and Restrictions."
PURCHASE OF SHARES
The Trust's Shares may be purchased through Wayne Hummer, 300 South Wacker
Drive, Chicago, Illinois 60606 (the "Distributor"), without a sales charge at
their net asset value next determined after an order in proper form and
payment are received. The net asset value of the Trust's Shares is determined
as of the close of trading on the New York Stock Exchange (generally 3:00 p.m.
Chicago time) on each business day and at 3:00 p.m. Chicago time on each other
day in which there is a sufficient degree of trading in the securities held by
the Trust so as to affect materially the Trust's net asset value. See "PRICING
OF SHARES."
The purchase price normally is $1 per Share. The minimum initial investment
generally is $500 and subsequent investments generally must also be at least
$500. The foregoing minimum investments may be lower for accounts that are
part of an employer sponsored and administered 401(K) pension plan. The
minimum initial purchase of Shares with respect to an Individual Retirement
Account, a Simplified Employee Pension Plan, a Defined Contribution Plan or
any other type of retirement plan provided by Wayne Hummer is $500 and
subsequent investments must be at least $100. The Trust reserves the right, in
its sole discretion, at any time to vary the initial and subsequent investment
minimums, to withdraw the offering or to refuse any purchase order.
To purchase Shares, an investor who does not currently maintain a brokerage
account with Wayne Hummer must establish one. Purchases will be effected
through the investor's brokerage account and all Shares purchased are entered
and credited to the account. Payment must be made to Wayne Hummer in cash or
by check, draft or wire transfer, unless the necessary funds are already
available as a free credit balance in the account. Shares may be purchased by
mail, in person, or in the case where an investor has an adequate free credit
balance in his or her brokerage account, automatically as described below.
Shares purchased begin to earn dividends on the business day following the day
on which an investor's order is effected.
Orders received by Wayne Hummer with payment prior to the close of trading
on the New York Stock Exchange (generally 3:00 p.m. Chicago time) will be
effected that business day. Orders received after that time will be effected
the next business day. In the case of an order for the purchase of Shares paid
for by check, Wayne Hummer advances federal funds, usually not later than the
next business day following receipt of an order in proper form, though the
order is effected when the check is received by Wayne Hummer as described
above. If Shares are purchased by a check which is subsequently dishonored,
Wayne Hummer has the right to redeem such Shares and to retain any dividends
or distributions made with respect thereto. "Business day" as used in this
prospectus means any day that the New York Stock Exchange and federal banks in
both Illinois and Massachusetts are open for business.
Additional information on retirement plans provided by Wayne Hummer,
including a description of applicable service fees and limitations on
contributions and withdrawals, may be obtained by calling Wayne Hummer at the
telephone numbers shown on the cover of this prospectus or by writing to Wayne
Hummer, Attention: Retirement Plans Department, 300 South Wacker Drive,
Chicago, Illinois 60606. A retirement plan account may combine investments in
Trust Shares with investments in shares of Wayne Hummer Investment Trust or in
other securities purchased through Wayne Hummer.
4
<PAGE>
AUTOMATIC PURCHASES
The Trust, in conjunction with Wayne Hummer, maintains a "sweep program" for
the automatic purchase and redemption of Shares. Expenses of maintaining the
"sweep program" are borne by Wayne Hummer pursuant to a Shareholder Service
Agreement. See "MANAGEMENT OF THE TRUST." Under the program, free credit cash
balances of $100 or more arising in a Shareholder's Wayne Hummer brokerage
account are automatically invested in Shares on a specified day of each week
(currently, Friday), or if the specified day is not a business day, then on
the prior business day. Free credit balances of $500 or more arising from cash
deposits into an account from dividend and interest payments that are not to
be paid to the Shareholder in cash, or from any other source, are invested in
Shares on the day of receipt in the account if deposited in the account prior
to 3:00 p.m. Chicago time. Free credit balances of $500 or more arising from
the sale of securities that do not settle on the day of the transaction (such
as most common and preferred stock transactions) and from principal repayments
on debt securities are invested in Shares on the business day on which the
proceeds are received in the brokerage account. The automatic Share purchase
procedure, and the automatic Share redemption procedure described below, may
be suspended at any time by the Trust or Wayne Hummer. A Shareholder wishing
to terminate his or her participation in the "sweep program" may do so at any
time by notifying his or her Wayne Hummer investment executive.
SYSTEMATIC INVESTMENT PLAN
Shareholders of the Trust (except retirement plan accounts) can arrange to
have a pre-authorized amount ($100 minimum) drawn on their bank checking
account and automatically invested in the Trust on a specified day of each
month. An authorization agreement which contains details of the plan can be
obtained from the Shareholder's Wayne Hummer investment executive. The
Systematic Investment Plan may be terminated by the Trust at any time and by
the Shareholder at any time by notifying his or her investment executive.
PAYROLL DIRECT DEPOSIT PLAN
Once a Shareholder meets the Trust's minimum initial investment requirement,
additional Shares may be purchased through Payroll Direct Deposit. Through
this Plan, periodic investments (minimum $100) are made automatically from the
Shareholder's payroll check into his or her existing Trust account. By
enrolling in the Plan, the Shareholder authorizes his or her employer or its
agents to deposit a specified amount from the Shareholder's payroll check into
the Trust's bank account for the purchase of additional Shares. In most cases,
the Shareholder's Trust account will be credited the day after the amount is
received by the Trust's bank. In order to participate in the Plan, the
Shareholder's employer must have direct deposit capabilities through Automated
Clearing House available to its employees. The Plan may be used for other
direct deposits, such as social security checks, military allotments, and
annuity payments.
To establish Payroll Direct Deposit, a Shareholder should call his or her
investment executive to obtain an Authorization for Payroll Direct Deposit.
Once the Plan is established, a Shareholder may alter the amount of the
deposit, alter the frequency of the deposit, or terminate participation in the
Plan by notifying his or her employer.
EXCHANGE PRIVILEGE
Shareholders of the Trust have the unlimited privilege (without charge) of
exchanging their Shares for shares of either the Wayne Hummer Growth Fund (
"Growth Fund") or the Wayne Hummer Income Fund ("Income Fund"), both of which
are portfolios of the Wayne Hummer Investment Trust ("Investment Trust") and
each of which operates as a separate no-load mutual fund. Similarly, shares of
either the Growth Fund or the Income Fund may be exchanged for Shares of the
Trust without charge. Exchanges may only be made, however, for shares of a
Trust which are available for sale in the Shareholder's state of residence. A
Shareholder desiring to utilize the exchange privilege should contact his or
her Wayne Hummer investment executive at the phone number or address shown on
the cover of this prospectus to obtain information about the Investment
Trust's mutual funds and exchange procedures. No guarantee can be made as to
the availability of the telephone exchange privilege (or the telephone
redemption privilege discussed below) during emergency situations or unusual
market conditions. Before exchanging Shares, Shareholders should read the
Investment Trust prospectus carefully. Exchanges will be effected through the
redemption of Shares tendered for exchange and the purchase of shares of the
either Growth Fund or the Income Fund at their respective net asset values
next determined after receipt by Wayne Hummer of the exchange request. For
federal income tax purposes, an exchange constitutes a sale with respect to
which a gain or loss may be realized depending upon whether the value of the
Shares being exchanged is more or less than the Shareholder's adjusted cost
basis.
5
<PAGE>
REDEMPTION OF SHARES
The Trust will redeem all or any number of a Shareholder's Shares without
charge at their net asset value next determined after receipt by Wayne Hummer
of a redemption request in proper form. Except for redemptions by check,
redemption requests must be made to Wayne Hummer by telephone, mail or in
person. Shares covered by a redemption request received in proper form prior
to 3:00 p.m. Chicago time will continue to accrue dividends through the close
of business on the date of receipt. Shares covered by a redemption request
received in proper form after 3:00 p.m. Chicago time will continue to accrue
dividends through the close of business on the next business day following the
date of receipt. Redemption proceeds are normally credited to a Shareholder's
Wayne Hummer brokerage account at the start of business on the next business
day following the date through which dividends are accrued, but in no event
later than three business days after the redemption request is received. In
certain instances, redemptions may be automatically effected by Wayne Hummer
as described below.
REDEMPTIONS BY CHECK
A Shareholder (except retirement plan accounts) may establish a special
checking account with State Street Bank and Trust Company for the purpose of
redeeming Shares by check. Checks may be requested from Wayne Hummer. Checks
may be written in amounts of $500 or more up to a maximum of $250,000 and may
be made payable to any party.
The checkwriting procedure for redeeming Shares enables a Shareholder to
earn the dividends declared on Shares until such time as the check is
presented to State Street Bank and Trust Company which effects the redemption
on behalf of the Trust and makes payment on the check. If (1) the amount of
the check is greater than the value in a Shareholder's account, or (2) the
check is for an amount less than $500 or (3) the check is in excess of
$250,000, the check will not be honored and will be returned unpaid to the
person to whom the check was written. The Trust reserves the right to impose a
charge for the checkwriting privilege at a future date, to charge for
excessive use of the checkwriting privilege, to charge Shareholders its costs
for stop payment requests and checks returned for any reason, and to make
additional charges to recover the costs of providing the checkwriting service.
The check redemption procedure may be suspended or terminated at any time by
the Trust, Wayne Hummer or State Street Bank and Trust Company.
At various times the Trust may be requested to redeem shares for which good
payment has not been received. For example, if Shares are purchased by check,
the Shareholder's check may not have been cleared through the banking system
even though Wayne Hummer has advanced federal funds to effect the purchase. In
such event, Wayne Hummer or, in the case of redemption by check, State Street
Bank and Trust Company, may delay payment for redeemed Shares for up to 15
days while the Trust awaits assurance that good payment has been collected.
AUTOMATIC REDEMPTIONS
Redemptions of Shares will be automatically effected on a daily basis by
Wayne Hummer to satisfy debit balances of $10 or more existing in a
Shareholder's brokerage account just prior to 3:00 p.m. Chicago time. After
application of any free credit cash balances in the account to such debit
balances, the number of Shares needed to satisfy the remaining debit balance
will be redeemed at net asset value determined at 3:00 p.m. Chicago time that
day. If more than one redemption transaction is processed on a specific day
and the number of Shares available for redemption is insufficient to satisfy
all redemption transactions, redemptions by check, if presented, will take
precedence over redemption to satisfy debit balances resulting from activity
in the Shareholder's brokerage account. The automatic redemption of Shares to
settle debit balances in the brokerage account for purchases of other
securities may occur prior to the settlement date of such purchases and, thus,
the redemption proceeds may remain uninvested in the brokerage account until
such settlement date.
Due to the relatively high cost of maintaining accounts of less than $500,
the Trust reserves the right to redeem involuntarily Shares in any account
(other than a retirement plan account) for their then current value if at any
time a Shareholder's total investment does not have a value of at least $500.
A Shareholder will first be notified that the value of his or her account is
less than $500 and will be allowed 60 days to make an additional investment
before the involuntary redemption is made. The proceeds of an involuntary
redemption will be credited promptly to the Shareholder's Wayne Hummer
brokerage account and, on the following business day, will be mailed to the
Shareholder by check.
The Trust may suspend the right of redemption and the determination of net
asset value and may postpone the date of payment for redeemed Shares beyond
seven days under the following unusual circumstances: when the New
LOGO
<PAGE>
York Stock Exchange is closed (other than weekends and holidays) or trading is
restricted; when an emergency exists as determined by the Securities and
Exchange Commission, making disposal of portfolio securities or the valuation
of net assets not reasonably practicable; or during any period when the
Securities and Exchange Commission has by order permitted a suspension of
redemption for the protection of Shareholders. For a more detailed description
of these circumstances see the Statement of Additional Information, "Purchase
and Redemption of Shares."
MANAGEMENT OF THE TRUST
Wayne Hummer Management Company (the "Investment Adviser"), 300 South Wacker
Drive, Chicago, Illinois 60606, acts as investment adviser to the Trust and
provides the Trust with operating facilities and management and portfolio
accounting services and serves as investment adviser to the Investment Trust
as well as to various individual, institutional and fiduciary accounts. The
Investment Adviser, organized in 1981, is owned by the voting members of Wayne
Hummer, a securities brokerage firm, which acts as Shareholder Service Agent
and Distributor.
Subject to the general supervision of the Board of Trustees, the Investment
Adviser determines the securities to be purchased, sold and held by the Trust,
is responsible for management of the Trust's portfolio and places all orders
subject to periodic review by the Board of Trustees.
As compensation for its advisory and management services to the Trust, the
Investment Adviser receives a fee from the Trust, payable monthly, at an
annual rate based on a percentage of the Trust's average daily net assets. The
annual rate of the advisory fee is .50% of the first $500 million of average
daily net assets and is reduced at several breakpoints for average daily net
assets in excess of $500 million. See the Statement of Additional Information,
"Management of the Trust--Investment Adviser." The Investment Adviser has
agreed to waive its fees to the extent that the Trust's operating expenses
during any fiscal year exceed 1% of the Trust's average daily net assets.
Expenses which are not subject to these limitations are interest, taxes,
brokerage commissions and extraordinary items.
The Investment Adviser also provides the Trust with certain portfolio
accounting services under the terms of a Portfolio Accounting Services
Agreement. The Investment Adviser maintains the accounting books and records
that constitute the record forming the basis for financial statements of the
Trust; maintains the capital stock account for the Trust; prepares a daily
trial balance for the Trust and calculates its net asset value; maintains all
records of a financial nature to the Trust's transactions; and processes
special ledgers and other reports when requested. As compensation for its
accounting services to the Trust, the Investment Adviser receives an annual
fee of .01 of 1% of average daily net assets of the Trust, which is computed
and accrued daily and payable monthly; but such fee shall not exceed $15,000
per annum. In addition, the Investment Adviser receives an equipment fee of
$50 per month and is reimbursed for its out-of-pocket costs for obtaining
securities pricing services, the license for use of portfolio accounting
software, and for other out-of-pocket costs which are incurred in providing
the pricing and software services.
Wayne Hummer provides services to the Trust pursuant to a Shareholder
Service Agreement. Such services, which are provided at their approximate cost
(excluding labor and overhead), if any, include such matters as: converting
funds into or advancing Federal Funds for the purchase of Shares; transmitting
purchase orders or redemption requests to the Transfer Agent; maintaining
records of Shareholders' transactions; preparing and transmitting federal and
state informational tax returns; recording Share dividends and forwarding cash
dividends to Shareholders; maintaining the automatic Share redemption and
purchase "sweep program"; generating and transmitting monthly statements; and
providing telephonic and written communications with respect to Shareholder
account inquiries.
DESCRIPTION OF SHARES
The Trust's Agreement and Declaration of Trust ("Trust Agreement") permits
the Trust to issue an unlimited number of full and fractional Shares. Each
Share is without par value, represents a proportionate interest in the Trust
which is equal to the proportionate interest represented by each other Share
and is entitled to such distributions from the net investment income generated
by the Trust's investments as are declared by the Trustees. Upon the
liquidation of the Trust, Shareholders are entitled to share pro rata in the
net assets that are available for distribution. Shares do not have
7
<PAGE>
cumulative voting rights nor any preemptive or conversion rights. Shares are
fully paid and nonassessable when issued as described herein, except as
expressly set forth below. Share Certificates are not issued. Shares owned and
dividends paid thereon will be reflected in each Shareholder's Wayne Hummer
monthly statement.
SHAREHOLDER VOTING RIGHTS
As a general rule the Trust will not hold annual or other meetings of
Shareholders. Under the Trust Agreement, Shareholders are entitled to vote in
connection with the following matters: (1) for the election or removal of one
or more Trustees if a meeting is called for that purpose; (2) with respect to
the adoption of any contract for which Shareholder approval is required under
the Investment Company Act of 1940 (such as the Trust's Investment Advisory
and Management Agreement); (3) with respect to any termination of the Trust to
the extent and as provided in the Trust Agreement; (4) with respect to any
amendment of the Trust Agreement (other than amendments changing the name of
the Trust, supplying any omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent provision thereof); (5) 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, to the same extent as the stockholders of a Massachusetts
business corporation; and (6) with respect to such additional matters relating
to the Trust as may be required by law, the Trust Agreement, the By-laws of
the Trust, any registration of the Trust with the Securities and Exchange
Commission or any state, or as the Trustees may consider necessary or
desirable. Each Trustee serves until the next meeting of Shareholders and
until the election and qualification of his or her successor or until such
Trustee sooner dies, resigns, retires or is removed by vote of at least two-
thirds of the Shares entitled to vote or a majority of the Trustees.
ADDITIONAL PORTFOLIOS
The Trust Agreement permits the Board of Trustees to issue Shares in one or
more series ("Portfolios"). Only one Portfolio is currently authorized, which
is designated as the "Money Market Portfolio." If additional Portfolios are
established, each Share of a particular Portfolio will represent an equal
proportionate interest in the assets and liabilities belonging to such
Portfolio with each other Share of that Portfolio. Should the Trust issue
Shares in two or more Portfolios, voting with respect to certain matters will
be by Portfolio (such as approval of the Investment Advisory and Management
Agreement) and with respect to other matters will be by all Shareholders
without regard to Portfolio (such as election of Trustees and the ratification
of the selection of independent auditors).
SHAREHOLDER LIABILITY
The Trust is organized as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obligations of the Trust. The
Trust Agreement provides that Shareholders shall not be subject to any
personal liability to any person extending credit to, contracting with or
having any claims against the Trust and that every written agreement,
obligation, instrument or undertaking made by the Trust shall contain a
provision that the same is not binding upon the Shareholders personally. With
respect to other claims, a Shareholder may be held personally liable to the
extent that claims are not satisfied by the Trust. Upon payment of any such
liability, however, Shareholders will be entitled to reimbursement from the
general assets of the Trust. The Trust is covered by insurance which the
Trustees consider adequate to cover foreseeable tort claims. See the Statement
of Additional Information, "Shareholder Liability."
PRICING OF SHARES
Shares may be purchased or redeemed at their net asset value, which normally
is $1. The net asset value per Share is computed by dividing the value of the
securities held by the Trust plus any other assets minus all liabilities by
the total number of Shares outstanding. The securities held by the Trust will
be valued using the amortized cost method of valuation. The net asset value
per Share is determined on each day the New York Stock Exchange is open for
trading as of the close of regular session trading on the Exchange (generally
3:00 p.m. Chicago time) and at 3:00 p.m. Chicago time on each other day during
which there is a sufficient degree of trading in securities of the Trust's
portfolio so as to affect materially the net asset value of the Shares. See
the Statement of Additional Information, "Pricing of Shares." Expenses,
including the fee payable to the Investment Adviser, are accrued daily.
8
<PAGE>
PERFORMANCE INFORMATION
From time to time, in advertisements or reports to shareholders, the Trust
may quote recognized independent publishers and other sources, such as
IBC/Donoghue, Inc. or similar industry services, for purposes of comparing the
Trust's rank or performance with that of other money market funds having
similar investment objectives or asset size. Performance comparisons should
not be considered representative of the future performance of the Trust.
Additionally, from time to time, the Trust may quote "yield" and "effective
yield" figures for the Trust's performance in advertisements and other
materials furnished to present or prospective shareholders. Each of these
figures is based upon historical earnings and is not necessarily
representative of the future performance of the Trust. The yield of the Trust
refers to the income generated by a hypothetical investment in the Trust over
a specific seven day period. This income is then annualized, which means that
the income generated during the seven day period is assumed to be generated
each week over an annual period and is shown as a percentage of the
investment. The effective yield is calculated similarly but, when annualized,
the income earned by the investment is assumed to be reinvested. The effective
yield will be slightly higher than the yield due to this compounding effect.
The Trust's yield and effective yield will fluctuate. See the Statement of
Additional Information, "Performance Information," for more information
concerning the Trust's performance.
DIVIDENDS
The Trust declares as daily dividends all of the Trust's undistributed net
investment income. Net investment income of the Trust is determined
immediately prior to the determination of net asset value and consists of (1)
accrued interest income plus or minus amortized purchase discount or premium,
(2) plus or minus all short-term realized and unrealized gains and losses and
(3) minus accrued expenses. The Trust does not expect to realize any long-term
gains or losses. Dividends are reinvested monthly in the form of additional
full and fractional Shares at net asset value, or at the option of the
Shareholder, are paid as cash dividends monthly by credit to the Shareholder's
brokerage account with Wayne Hummer and, on the following business day, are
mailed to the Shareholder by check. Dividends are taxable to Shareholders
whether received in cash or reinvested in additional Shares, as described
below.
TAXES
The Trust intends to continue to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"), as it has
since its inception. If so qualified, the Trust will not be subject to federal
income tax on its net investment income and realized capital gains distributed
to Shareholders.
Distributions of net income including any short-term capital gains are
taxable to Shareholders as ordinary income, whether such distributions are
taken in cash or reinvested in additional Shares. It is expected that none of
the Trust's distributions to Shareholders will be eligible for the dividends-
received deduction currently available to corporate Shareholders. Promptly
after the end of each calendar year, each Shareholder will receive a statement
of the federal income tax status of all distributions made during the year.
Distributions declared in October, November or December to Shareholders of
record as of a date in one of those months and paid before the following
February 1 are treated for federal income tax purposes as paid on December 31
of the calendar year declared. Shareholders are advised to consult with their
tax advisors concerning their individual tax situations.
The Trust is required by law to withhold federal income tax at a rate of 31%
from taxable distributions to Shareholders who do not furnish their correct
taxpayer identification numbers (in the case of individuals, their social
security numbers) and in certain other circumstances.
REPORTS TO SHAREHOLDERS
The Trust sends to its Shareholders various financial reports ("Reports")
such as unaudited semi-annual financial statements and fiscal year-end
financial statements audited by the Trust's independent auditors. To reduce
expenses, only one copy of most Reports may be mailed to all accounts with the
same social security or taxpayer identification number or to all Shareholders
in the same household. Shareholders may call or write Wayne Hummer to request
that copies of Reports be mailed to each account with a common taxpayer number
or to two or more Shareholders in the same household.
9
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<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
WAYNE HUMMER MONEY FUND TRUST
A NO-LOAD MUTUAL FUND
300 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
CHICAGO RESIDENTS CALL.........(312) 431-1700
TOLL
FREE......................................(800)
621-4477
----------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT THE TRUST'S PROSPECTUS. THIS
STATEMENT PROVIDES ADDITIONAL INFORMATION WHICH SHOULD BE READ IN CONJUNCTION
WITH THE TRUST'S PROSPECTUS DATED JULY 25, 1997. THE PROSPECTUS MAY BE
OBTAINED AT NO CHARGE BY TELEPHONING WAYNE HUMMER INVESTMENTS L.L.C. ("WAYNE
HUMMER") THE TRUST'S DISTRIBUTOR AND SHAREHOLDER SERVICE AGENT, AT ONE OF THE
NUMBERS ABOVE OR BY WRITING TO THE ABOVE ADDRESS.
The date of this Statement of Additional Information is July 25, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
BACKGROUND................................................................. B-1
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS ........................... B-1
TRUST INVESTMENTS ......................................................... B-3
MANAGEMENT OF THE TRUST ................................................... B-6
Trustees ................................................................ B-6
Officers ................................................................ B-6
Investment Adviser ...................................................... B-7
Relationship of the Trust, Wayne Hummer
and Wayne Hummer Management Company..................................... B-10
PURCHASE AND REDEMPTION OF SHARES ......................................... B-12
PRICING OF SHARES ......................................................... B-13
SHAREHOLDER VOTING RIGHTS ................................................. B-14
SHAREHOLDER LIABILITY ..................................................... B-15
LIMITATION OF LIABILITY ................................................... B-15
OTHER MATTERS ............................................................. B-15
TRUST NAME ................................................................ B-15
PERFORMANCE INFORMATION ................................................... B-16
DIVIDENDS ................................................................. B-17
TAXES ..................................................................... B-17
Federal Income Tax ...................................................... B-17
Other Taxes ............................................................. B-18
INDEPENDENT AUDITORS ...................................................... B-18
CUSTODIAN AND TRANSFER AND DIVIDEND CREDITING AGENT ....................... B-18
REPORTS TO SHAREHOLDERS ................................................... B-18
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT AUDITORS............................................ B-18
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER AND BOND RATINGS........................... B-19
</TABLE>
i
<PAGE>
BACKGROUND
Wayne Hummer Money Fund Trust (the "Trust") is a no-load, diversified, open-
end management investment company organized as a Massachusetts business trust
pursuant to an Agreement and Declaration of Trust dated December 4, 1981 (the
"Trust Agreement"). The Trust Agreement authorizes the Trustees to issue one
or more series of units of beneficial interest ("Shares"). The Trust currently
offers Shares of only one series, the Money Market Portfolio.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
In addition to the investment objective, policies and restrictions discussed
in the prospectus, the Trust may NOT:
(1) Purchase any securities other than money market instruments and
securities described in the Trust's current prospectus or Statement of
Additional Information;
(2) Purchase the securities of issuers whose principal business is in the
same industry (other than United States Government securities, United
States Government agency or instrumentality securities or bank money
instruments) if immediately after such purchase the value of the Trust's
investments in such industry would exceed 25% of the value of its total
assets (taken at market value at the time of each investment). For purposes
of this subparagraph, the personal credit and business credit businesses of
finance companies will be considered separate industries and, as to
utilities, the water, gas, electric and telephone businesses will be
considered separate industries;
(3) Purchase the securities (other than of the United States Government,
its agencies and instrumentalities) of any one issuer if immediately after
such purchase more than 5% of the value of the Trust's total assets (taken
at market value at the time of each investment) would be invested in such
issuer, except that up to 25% of the value of the Trust's total assets may
be invested without regard to such 5% limitation but shall instead be
subject to a 10% limitation;(1)
(4) Purchase more than 10% of any one class of an issuer's outstanding
securities, except that such restriction shall not apply to securities of
the United States Government, its agencies or instrumentalities,
certificates of deposit, bankers' acceptances or repurchase agreements;
(5) Make investments for the purpose of exercising control or management;
(6) Make loans, except that securities owned or held by the Trust may be
loaned pursuant to paragraph (7) below; provided, however, that the Trust
may purchase money market securities and enter into repurchase agreements
with banks, brokers and dealers;
(7) Lend securities in excess of 20% of the Trust's total assets, taken
at market value; provided, however, that loans not exceeding 20% of the
Trust's total assets may be made if collateral is maintained from the
borrower equal at all times to the current market value of the securities
loaned;(2)
(8) Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization; The
Trust did not lend its securities during the past fiscal year. There is no
present intention to engage in the lending of Trust securities.
(9) Purchase any securities on margin, except for use of short-term
credits necessary for clearance of purchases and sales of Portfolio
securities; make short sales of securities or maintain a short position or
write, purchase or sell puts, calls, straddles, spreads or combinations
thereof;
- --------
(1) Procedures adopted pursuant to Rule 2a-7 under the Investment Company Act
of 1940 restrict the Trust generally to the 5% limitation; the 10%
limitation will not be available so long as such procedures are in effect.
See "PRICING OF SHARES".
(2) The Trust did not lend its securities during the past fiscal year. There
is no present intention to engage in the lending of Trust securities.
B-1
<PAGE>
(10) Purchase or sell real estate (other than money market securities
secured by real estate or interests therein or money market securities
issued by companies which invest in real estate, or interests therein),
commodities or commodity contracts, oil or gas interests or other mineral
exploration or development programs;
(11) Purchase securities of issuers (other than securities of the United
States Government, its agencies or instrumentalities) having a record,
together with its predecessors, of less than three years of continuous
operation if, regarding all such securities, more than 5% of the Trust's
total assets, taken at market value, would be invested in such securities;
(12) Invest in securities restricted as to disposition under the federal
securities laws (except money market instruments issued under Section 4(2)
of the Securities Act);
(13) Invest more than 10% of its assets in securities (including
repurchase agreements maturing in more than seven days) which are
considered illiquid;
(14) Borrow money except from banks and only as a temporary measure for
extraordinary or emergency purposes, but not for investment purposes nor in
any amount exceeding 5% of the Trust's total assets, taken at market value;
(15) Mortgage, pledge or hypothecate or in any manner transfer (except as
provided in paragraph (7) above) as security for indebtedness any
securities owned or held by the Trust except as may be necessary in
connection with borrowings mentioned in paragraph (14) above, and then such
mortgaging, pledging or hypothecating may not exceed 25% of the Trust's
total assets, taken at market value;
(16) Act as an underwriter of securities;
(17) Purchase or retain securities of any issuer employing, as an officer
or director, any person serving as an officer or Trustee of the Trust, or
purchase or retain the securities of any issuer, if, to the Trustees'
knowledge, those officers, directors or Trustees of the Trust or its
Investment Adviser who individually either directly or indirectly own,
control or hold with power to vote more than 0.5% of the outstanding
securities of such issuer, together own directly or indirectly, control or
hold with power to vote more than 5% of such outstanding securities;
(18) Issue a class of securities which is senior to the Shares, except as
provided pursuant to paragraph 14 and in accordance with the Investment
Company Act of 1940.
The restrictions set forth above may not be changed without the approval of
the holders of a majority of the Trust's Shares, as defined in the Investment
Company Act of 1940. See "SHAREHOLDER VOTING RIGHTS." In addition to the
foregoing restrictions, the Trust limits its investments to securities that
meet the quality and diversification requirements of Rule 2a-7 under the
Investment Company Act of 1940. See "PRICING OF SHARES".
In order to permit the sale of Shares of the Trust in certain states, the
Trust may make commitments more restrictive than the restrictions described
above and in the prospectus. Should the Trustees determine that any such
commitment is no longer in the best interests of the Trust and its
Shareholders, the Trust will revoke the commitment by terminating sales of its
Shares in the state(s) involved.
If any applicable percentage restriction contained in the foregoing
investment restrictions is satisfied at the time the securities subject
thereto are purchased, the fact that the percentage restriction subsequently
is exceeded due to a fluctuation in the value of such securities or of other
securities of the Trust will not require the Trust to dispose of such
securities. Notwithstanding the foregoing, if the percentage restriction
contained in paragraph (7) or paragraph (14) above is violated due to a
subsequent fluctuation in value of the Trust's portfolio of securities, the
Trust shall be entitled, as a condition which shall be a part of all loans
subject to paragraph (7) and all borrowings subject to paragraph (14), to
reduce within three business days the outstanding amount of such loans or
borrowings in order once again to satisfy such percentage restriction.
B-2
<PAGE>
Moreover, subject to the investment restriction contained in paragraph (7)
above, the Trust may from time to time loan its securities to brokers, dealers
and financial institutions and receive collateral in cash or cash equivalents
which will be maintained at all times in an amount equal to at least 100% of
the current value of the loaned securities. In this regard: (1) such
collateral will be invested in short-term securities, the income from which
will increase the return to the Trust; (2) the Trust will retain all rights of
beneficial ownership as to the loaned Portfolio securities, including voting
rights and rights to interest or other distributions, and will have the right
to regain record ownership of loaned securities to exercise such beneficial
rights; (3) such loans will be terminable within three business days; and (4)
upon termination of the loan, the Trust will receive securities which are of
the same class and issue as those loaned. In the event that the borrower of
such loaned securities fails financially, the Trust might experience a delay
in recovery, incur expenses in enforcing its rights and experience losses,
including a substitution of securities and loss of income. The Trust may pay
reasonable fees to persons not affiliated with the Trust, as defined in the
Investment Company Act of 1940, in connection with the arranging of such
loans.
TRUST INVESTMENTS
The following is a description of the types of money market instruments in
which the Trust may invest. All securities purchased by the Trust will mature
within one year from the date of purchase.
United States Government Securities are marketable debt securities which are
issued by and are a direct obligation of the United States Treasury. Treasury
securities differ in their interest rates, maturities and times of issuance:
Treasury bills have maturities of one year or less; Treasury notes have
maturities of one to 10 years; Treasury bonds generally have maturities of
greater than ten years. All Treasury securities are direct obligations of the
United States Government and generally are considered the safest forms of
investment as no borrower has a higher credit rating than the United States
Government.
United States Government Agency and Instrumentality Securities are
marketable debt securities issued or guaranteed by agencies and
instrumentalities of the United States Government. Although these securities
are not direct obligations of the United States Government, some are supported
by the full faith and credit of the Treasury, such as Government National
Mortgage Association pass-through certificates; others are supported to the
extent of the right of the issuer to borrow from the Treasury, such as Federal
Home Loan Bank bonds and notes; while others solely depend on the credit of
the agency or instrumentality and not the Treasury, such as Federal National
Mortgage Association debentures and notes. There can be no assurance that the
United States Government would support an agency or instrumentality that
defaults on securities not guaranteed by the Treasury.
United States Government Agencies and Instrumentalities may also issue
securities having rates of interest that are adjusted periodically or that
"float" continuously or periodically according to formulae intended to
minimize fluctuation in values of the instruments ("Variable Rate
Securities"). The interest rate on a Variable Rate Security is ordinarily
determined by reference to, or is a percentage of, an objective standard such
as a bank's prime rate, the 90-day U.S. Treasury Bill rate, or the rate of
return on commercial paper or bank certificates of deposit. Generally, the
changes in the interest rates on Variable Rate Securities reduce the
fluctuation in the market value of such securities. Accordingly, as interest
rates decrease or increase, the potential for capital appreciation or
depreciation is less than for fixed-rate obligations.
The maturity of Variable Rate Securities are determined in accordance with
the Securities and Exchange Commission rules, that allow the trust to consider
certain of such instruments as having maturities shorter than the maturity
date on the face of the instrument if they are guaranteed by the U.S.
Government or its agencies or instrumentalities.
B-3
<PAGE>
Zero Coupon Bonds are purchased at a discount from the face amount. The
buyer receives only the right to receive a fixed payment on a certain date in
the future and does not receive periodic interest payments. The zero coupon
securities in which the Fund may invest are U.S. Treasury notes and bonds that
have been stripped of their unmatured interest coupons, the unmatured interest
coupons or interests in such U.S. Treasury securities or coupons.
Bank Money Instruments include certificates of deposit, variable rate
certificates of deposit, and bankers' acceptances.
Certificates of deposit generally are short-term, interest-bearing
negotiable certificates issued by commercial banks against funds deposited in
the issuing institution.
Variable rate certificates of deposit are certificates of deposit on which
the interest rate is periodically adjusted prior to their stated maturity,
usually at 30, 90 or 180 day intervals, based upon a specified market rate
which is considered by the issuers to be representative of the then-prevailing
certificate of deposit rate. As a result of these adjustments the interest
rate on these obligations may be increased or decreased periodically. Variable
rate certificates of deposit also may contain provisions whereby the issuing
banks agree to repurchase such instruments at par on any coupon date, on any
rate adjustment date, or on any date after a specified holding period.
Variable rate certificates of deposit normally carry a higher initial interest
rate than fixed rate certificates of deposit with shorter maturities because
the issuing bank pays a premium for the use of the money for a longer period
of time. With respect to variable rate certificates of deposit maturing in one
year or less from the time of purchase, the Trust uses the period remaining
until the next rate adjustment date for purposes of determining the average
weighted maturity.
Bankers' acceptances are time drafts drawn on a commercial bank by a
borrower, usually in connection with an international commercial transaction
(to finance the import, export, transfer or storage of goods). The borrower,
as well as the bank which unconditionally guarantees to pay the draft at its
face amount on the maturity date, is liable for payment. Most acceptances have
maturities of six months or less and are traded in secondary markets prior to
maturity.
The Trust may not invest in any security issued by a commercial bank unless
the bank is organized and operating in the United States, has total assets of
at least $1 billion and is a member of the Federal Deposit Insurance
Corporation ("FDIC"), although the securities in which the Trust invests may
not be insured by the FDIC. The Trust may not invest in money market
instruments issued by foreign banks or foreign branches of domestic banks.
Short-Term Corporate Debt Instruments include both commercial paper and non-
convertible corporate debt securities with no more than one year remaining to
maturity from the date of their acquisition by the Trust.
The Trust may invest in commercial paper issued in reliance on the exemption
from Section 3(a)(3) ("Section 3(a)(3) paper") of the Securities Act. Such
commercial paper is generally issued by major corporations and may be issued
only to finance current transactions and must mature in nine months or less.
Although Section 3(a)(3) paper is not restricted as to the types of investors
to whom it may be sold, it is purchased primarily by institutional investors
through investment dealers and individual investor participation in the
commercial paper market is very limited. The Trust also may invest in money
market instruments issued in reliance on the exemption from registration
afforded by Section 4(2) of the Securities Act ("Section 4(2) paper") which is
restricted as to disposition under the federal securities laws, and generally
is sold to institutional investors such as the Trust who agree that they are
purchasing the paper for investment and not with a view to a public
distribution. Any resale by the purchaser must be in an exempt transaction.
Section 4(2) paper is often resold to other institutional investors through or
with the assistance of investment dealers or on an automated trading
B-4
<PAGE>
system operated by the National Association of Securities Dealers, Inc., thus
assisting in providing liquidity.
The Trust's adviser believes that generally, there is no significant
difference between Section 3(a)(3) and Section 4(2) commercial paper in terms
of market or trading characteristics or of the quality of the issuers and
that, despite the legal restrictions thereon, Section 4(2) paper has typically
been no less liquid or saleable than Section 3(a)(3) paper. If a particular
investment in Section 4(2) paper is not determined by the Trust's adviser to
be liquid based on specified standards, the investment will be included within
the 10% limitation on illiquid securities. In accordance with rules of the
Securities and Exchange Commission, the Board of Trustees has approved
guidelines and procedures adopted by the Trust's adviser and has delegated the
day-to-day function of determining and monitoring the liquidity of securities
to the Trust's adviser. The Board, however, will retain oversight and be
ultimately responsible for the determination.
The Trust may also make investments in non-convertible corporate debt
securities (e.g., bonds and debentures) with no more than one year remaining
to maturity from the date of their acquisition by the Trust. Corporate debt
securities with a remaining maturity of less than one year tend to become
extremely liquid and are traded as money market securities. Such issues tend
to have greater liquidity and considerably less market value fluctuations than
longer term issues.
The Section 3(a)(3) paper and Section 4(2) paper investments of the Trust,
at the time of purchase, will be rated "A-1" by Standard & Poor's Corporation
and/or "Prime-1" by Moody's Investors Service, Inc. or, if not rated, issued
by companies having an outstanding debt issue rated at least "AA" by Standard
& Poor's Corporation and/or "Aa" by Moody's Investors Service, Inc. The
Trust's investments in corporate debt securities (which must have maturities
from the date of their acquisition by the Trust of one year or less) must be
rated at the time of purchase at least "AA" by Standard & Poor's Corporation
and/or "Aa" by Moody's Investors Service, Inc. See "APPENDIX" for an
explanation of the commercial paper ratings of Standard & Poor's Corporation
and Moody's Investors Service, Inc.
Repurchase Agreements are instruments under which the purchaser (e.g., the
Trust) acquires ownership of the obligation (underlying security) and the
seller (a broker-dealer or bank) agrees, at the time of the sale, to
repurchase the obligation at a mutually agreed upon time and price, thereby
determining the yield during the purchaser's holding period. This results in a
fixed rate of return for the period. Repurchase agreements usually are for
short periods, frequently less than one week. The value of the underlying
securities is marked to market daily. Should the value of the underlying
securities decline, the issuer of the repurchase agreement is required to
provide the Trust with additional securities so that the aggregate value of
the underlying securities is equal to the repurchase price. The Trust may
invest in securities subject to repurchase agreements with any member bank of
the Federal Reserve System or primary dealer in United States Government
securities. In the event of bankruptcy or other default of a seller of a
repurchase agreement, the Trust might have expenses in enforcing its rights,
and could experience losses, including a decline in the value of the
underlying securities and a loss of income. Repurchase agreements may be
entered into only with respect to underlying United States Government or
United States Government agency or instrumentality securities, certificates of
deposit, commercial paper or bankers' acceptances in which the Trust may
otherwise invest, as described above.
The Trust is managed so that the average maturity of all instruments in its
Portfolio (on a dollar-weighted basis) is generally between 15 and 75 days and
not more than 90 days depending upon the Investment Adviser's evaluation of
market trends and other conditions. The securities of the Trust normally
mature within six months and in no event will the Trust contain any securities
maturing more than one year from the date of acquisition.
B-5
<PAGE>
Although the Trust generally does not seek profits through short-term
trading, it may dispose of any security prior to its maturity if, on the basis
of a revised credit evaluation of the issuer or other circumstances or
considerations, the Investment Adviser believes such disposition advisable. In
addition, the Trust may attempt, from time to time, to increase its yield by
trading to take advantage of variations in the markets for short-term money
market instruments.
MANAGEMENT OF THE TRUST
The Trustees and executive officers of the Trust, their ages and their
principal occupations are set forth below. Unless otherwise noted, the address
of each of the following Trustees and executive officers is 300 South Wacker
Drive, Chicago, Illinois 60606.
TRUSTEES
Steven R. Becker (46), Member, Wayne Hummer and prior to April 1, 1996,
Partner, Wayne Hummer & Co.; Director and Former Vice President, Wayne Hummer
Management Company.*(3)
Philip M. Burno (65), Chairman, Board of Trustees of the Trust; Member,
Wayne Hummer and prior to April 1, 1996, Partner, Wayne Hummer & Co.;
Director, Wayne Hummer Management Company.*(3)
Charles V. Doherty (63), 3 First National Plaza, Suite 1400, Chicago,
Illinois 60602; Director, Lakeside Bank, Chicago, Illinois (Illinois State
Chartered Bank); Managing Director, Madison Asset Group, Chicago, Illinois
(Registered Investment Adviser); President and Director, Doherty Zable & Co.
(Certified Public Accountants); September 1, 1989 to December 31, 1992,
President and Chief Operating Officer, Midwest Stock Exchange (now, Chicago
Stock Exchange).(3)
Joel D. Gingiss (54), 207 Hazel, Highland Park, Illinois 60035; Assistant
States Attorney, Lake County, Illinois; Former Chairman of the Board of
Directors and President, Gingiss International, Inc. (franchisor of Gingiss
Formalwear Stores); Past President, International Franchise Association.(3)
Patrick B. Long (54), 101 N. Main Street, Ann Arbor, Michigan 48104;
Chairman and Chief Executive Officer, KMS Industries, Inc. (fusion energy
research).
Eustace K. Shaw (72), 200 First Avenue E., Newton, Iowa 50208; President, B.
F. Shaw Printing Co.; Chairman of the Board of Directors, B. F. Shaw Printing
Co.; Former Publisher, Newton Daily News.
The Trustees serve in similar capacities with Wayne Hummer Investment Trust.
OFFICERS
David P. Poitras (36), President of the Trust since August 1, 1993; Vice
President, Wayne Hummer Investment Trust since 1993; Vice President, Wayne
Hummer Management Company since
- --------
* Interested person, as defined in the Investment Company Act of 1940, of the
Trust, the Investment Adviser and/or the Distributor.
(3) Member of the Executive Committee of the Trust. The Executive Committee is
elected by the Board of Trustees and is composed of four Trustees, two of
whom are interested persons as defined in the Investment Company Act of
1940. The Executive Committee is authorized by the Agreement and
Declaration of Trust to exercise such powers and authority of the Trustees
as the Trustees may determine, when the Board of Trustees is not in
session and as are consistent with law.
B-6
<PAGE>
May, 1992; Member, Wayne Hummer and prior to April 1, 1996, Partner, Wayne
Hummer & Co. since January, 1992 and Bond Department Manager, Wayne Hummer.
Thomas J. Rowland (51), Vice President of the Trust; President, Wayne Hummer
Investment Trust and Wayne Hummer Management Company (formerly Vice President
of Wayne Hummer Investment Trust and Wayne Hummer Management Company); Member,
Wayne Hummer and prior to April 1, 1996, Partner, Wayne Hummer & Co.
Jean M. Maurice (34), Treasurer of the Trust and Secretary and Treasurer of
Wayne Hummer Investment Trust since March, 1988; Administrative Assistant for
the Trust and Wayne Hummer Investment Trust, prior thereto.
Robert J. Moran (51), 222 North LaSalle Street, Chicago, Illinois 60601;
Secretary of the Trust; Partner of the law firm Vedder, Price, Kaufman &
Kammholz.(4)
Wayne Hummer Management Company, the investment adviser, pays all
compensation of the officers of the Trust and the compensation of all Trustees
of the Trust who are interested persons, as defined in the Investment Company
Act of 1940, of the Trust. The Trust pays each Trustee who is not an
interested person of the Trust, as defined in the Investment Company Act of
1940, $2,000 per year, plus $500 and expenses for each Board and committee
meeting attended.
The following table sets forth the compensation received by all Trustees of
the Trust for the fiscal year ended March 31, 1997. The information in the
last column of the table sets forth the total compensation received by all
Trustees for calendar year 1996 for service as a Trustee of this Trust and the
Wayne Hummer Investment Trust.
<TABLE>
<CAPTION>
PENSION AND
RETIREMENT TOTAL
BENEFITS COMPENSATION
AGGREGATE ACCRUED AS HUMMER FUNDS
COMPENSATION PART OF TRUST PAID TO
TRUSTEE FROM THE TRUST EXPENSES TRUSTEES
- ------- -------------- ------------- ------------
<S> <C> <C> <C>
Steven R. Becker...................... $ 0 $ 0 $ 0
Philip M. Burno....................... 0 0 0
Charles V. Doherty.................... 5,000 0 9,000
Joel D. Gingiss....................... 5,500 0 10,500
Patrick B. Long....................... 5,000 0 9,000
Eustace K. Shaw....................... 5,000 0 9,000
</TABLE>
As of June 30, 1997, the Trustees and officers as a group owned less than 1%
of the outstanding Shares of the Trust.
INVESTMENT ADVISER
Wayne Hummer Management Company (the "Investment Adviser"), 300 South Wacker
Drive, Chicago, Illinois 60606, acts as investment adviser to the Trust and
provides the Trust with operating facilities and management services under the
terms of an Investment Advisory and Management Agreement. The Investment
Adviser was incorporated on November 30, 1981.
Subject to the review of the Trustees, the Investment Adviser is responsible
for the management of the Trust and reviews the Trust's holdings in light of
its own research analysis and information from other relevant sources. The
Investment Adviser determines the securities to be purchased, sold and
- --------
(4) Mr. Moran receives no compensation for services rendered in his capacity
as Secretary of the Trust. The law firm of Vedder, Price, Kaufman &
Kammholz, of which he is a partner, receives compensation for legal
services rendered to the Trust.
B-7
<PAGE>
held by the Trust and places all orders subject to the general supervision of
the Board of Trustees. Securities normally are purchased directly from the
issuer or from an underwriter or a market maker for money market instruments.
Usually, no brokerage commissions are paid by the Trust for such purchases.
Purchases from underwriters of securities may include a concession paid by the
issuer to the underwriter. The purchase price paid to dealers serving as
primary market makers for money market instruments may include a spread
between the bid and asked prices. During the three fiscal years ended March
31, 1997, all transactions for the Trust were at net prices and there were no
commissions paid by the Trust.
Transactions are allocated among various brokers and dealers by the
Investment Adviser in its best judgment. In placing such orders, the
Investment Adviser primarily is concerned with obtaining the best combination
of price and execution. This does not mean that the Trust must base its
execution decisions solely on whether the lowest possible price or commission
costs may be obtained. In seeking to achieve the best combination of price and
execution, an effort will be made to evaluate the overall quality and
reliability of broker-dealers and the services they provide, including their
general execution capability, reliability and integrity, willingness to take
positions in securities, general operational capabilities and financial
condition. When the execution and prices offered by two or more brokers or
dealers are comparable, the Investment Adviser may, in its discretion,
purchase and sell Portfolio securities from and to brokers or dealers that
provide the Investment Adviser with research, statistical or other services.
Such services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities; and
furnishing analysis and reports concerning issuers and industries, securities,
economic factors, trends and portfolio strategy. It is not possible to place a
monetary value on such research services. Since such research and statistical
services only supplement the Investment Adviser's own research efforts and any
information received must be analyzed, weighed and reviewed by the Investment
Adviser's staff, the receipt of such information is not expected materially to
reduce the Investment Adviser's cost of performing its advisory contract with
the Trust. The information received may be used by the Adviser for its other
clients and/or made available to Wayne Hummer for use in serving its
customers. Additionally, information available to Wayne Hummer may be made
available to the Investment Adviser in serving the Trust and its other
clients. Portfolio securities will not be purchased from or sold to Wayne
Hummer or the Investment Adviser or an affiliate, as defined in the Investment
Company Act of 1940, of either, except pursuant to special procedures adopted
under Rule 17a-7 promulgated under the Investment Company Act of 1940.
Investment decisions for the Trust are reached independently from those for
Wayne Hummer Investment Trust ("WHIT"), the other investment company managed
by the Investment Adviser, or other of the Investment Adviser's clients
("Clients"). WHIT and/or Clients may also make investments in money market
instruments at the same time as the Trust. When the Trust, WHIT and/or Clients
have funds available for investment in money market instruments, the
Investment Adviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased in order to
obtain the best combination of price and execution. In such event, allocation
of the securities so purchased or sold, as well as the costs incurred in a
transaction, will be made by the Investment Adviser in a manner it considers
to be equitable and consistent with its fiduciary obligations to the Trust,
WHIT and/or its Clients. In some cases this procedure may affect the size or
price of the position available to the Trust. It is the opinion of management
of the Trust that the benefits available outweigh any disadvantages that may
arise from concurrent transactions.
The principal executive officers and directors of the Investment Adviser are
as follows:
Harry Flagg Baum, Director; Steven R. Becker, Director; G. Ted Becker,
Treasurer; Philip M. Burno, Director; Philip Wayne Hummer, Director and
Chairman; David P. Poitras, Vice President; William A. Rogers, Director and
Secretary; Thomas J. Rowland, President; Mark H. Dierkes, Vice President;
and Damaris E. Martinez, Vice President, Administration.
B-8
<PAGE>
As compensation for its advisory and management services to the Trust, the
Investment Adviser receives a fee from the Trust monthly at the following
annual rates:
<TABLE>
<CAPTION>
ADVISORY
FEE
--------
<S> <C>
Average daily net assets of the Trust:
Up to $500 million................................................... 0.500%
In excess of $500 million but not exceeding $750 million............. 0.425%
In excess of $750 million but not exceeding $1 billion............... 0.375%
In excess of $1 billion but not exceeding $1.5 billion............... 0.350%
In excess of $1.5 billion but not exceeding $2 billion............... 0.325%
In excess of $2 billion but not exceeding $2.5 billion............... 0.300%
In excess of $2.5 billion............................................ 0.275%
</TABLE>
For the fiscal years ended March 31, 1997, 1996, and 1995, the Trust
incurred total advisory fees amounting to $1,097,662, $976,895, and $736,790,
respectively.
The Investment Adviser has agreed to waive its advisory fee to the extent
that the Trust's ordinary operating expenses, including the fee of the
Investment Adviser, exceed either (1) 1% of the average daily net assets of
the Trust, computed on an annual basis or (2) the expense limitations imposed
by the securities laws or regulations thereunder of any state in which the
Fund's Shares are qualified for sale, as such limitations may be increased or
decreased from time to time, and, if required by such laws or regulations, to
reimburse the Fund for certain expenses in excess of any expense limitation.
Expenses which are not subject to these limitations are interest, taxes,
brokerage commissions and extraordinary items such as litigation costs. No
reimbursement by the Investment Adviser was required for the last three fiscal
years.
The Investment Adviser is obligated, among other things: to provide
investment advisory services; to furnish administrative services, office space
and basic facilities for management of the Trust's affairs; to pay the
compensation of all officers and other personnel of the Trust for their
services to the Trust as well as of the Trustees of the Trust who are
interested persons, as defined in the Investment Company Act of 1940. The
Trust pays all other expenses incurred in the operation of the Trust
including, among other things: brokerage commissions and transaction costs in
connection with the purchase and sale of the Trust's portfolio of securities;
taxes; expenses for legal, auditing and accounting services; costs of
preparing, typesetting, printing and mailing prospectuses, Shareholder
reports, proxy materials and notices to Shareholders of the Trust; charges of
the Custodian, Transfer Agent and Shareholder Service Agent; premiums for
insurance carried by the Trust pursuant to the requirements of Section 17(g)
or permissible under any other provision of the Investment Company Act of 1940
and the regulations promulgated thereunder; expenses related to the issuance
or redemption of Shares; expenses of registering, qualifying and maintaining
registration and qualification of Shares for sale under federal, state and
other laws; costs of conducting Shareholder relations; fees and out-of-pocket
expenses of Trustees who are not interested persons, as defined in the
Investment Company Act of 1940; expenses incidental to holding meetings of the
Trust's Shareholders, including proxy solicitations therefor, as well as
expenses incidental to holding meetings of the Board of Trustees and
committees of the Board of Trustees; interest expenses; costs of transactions
in portfolio securities; costs incidental to generating and mailing
confirmations and monthly statements; the allocated portion of fees and
expenses incurred in connection with any investment company organization or
trade association of which the Trust may be a member; and other expenses
properly payable by the Trust. Certain of these expenses will be incurred on
behalf of the Trust by the Investment Adviser or by Wayne Hummer as
Distributor or Shareholder Service Agent and will be reimbursed to such party
by the Trust at approximately such party's cost.
The Investment Advisory and Management Agreement (the "Advisory Agreement")
was approved (i) at the May 2, 1997 meeting of the Board of Trustees by a
majority of the Trustees who are neither
B-9
<PAGE>
interested persons, as defined in the Investment Company Act of 1940, nor
parties to the Advisory Agreement, and (ii) by the Shareholders of the Trust
at the meeting of Shareholders held December 13, 1990. The Advisory Agreement
has been approved by the Trustees as specified above for continuance until
July 31, 1998. Unless earlier terminated as described below, the Advisory
Agreement thereafter will continue in effect from year to year if approved
annually (1) by the Trustees of the Trust or by a majority of the outstanding
voting Shares of the Trust and (2) by a majority of Trustees who are not
parties to such Agreement or interested persons, as defined in the Investment
Company Act of 1940, of any such party. The Advisory Agreement is not
assignable and may be terminated without penalty on 60 days' written notice at
the option of either party thereto or by the vote of the Shareholders.
The Investment Adviser also provides the Trust with certain portfolio
accounting services under the terms of a Portfolio Accounting Services
Agreement (the "Accounting Agreement"). The Investment Adviser maintains the
accounting books and records that constitute the record forming the basis for
financial statements of the Trust; maintains the capital stock account for the
Trust; prepares a daily trial balance for the Trust and calculates its net
asset value; maintains all records of a financial nature to the Trust's
transactions; and processes special ledgers and other reports when requested.
Under the Accounting Agreement in effect since November 1, 1994, the
Investment Adviser receives as compensation for its accounting services to the
Trust, an annual fee which is computed and accrued daily and payable monthly.
The Investment Adviser received for the period January 1, 1995 through
December 31, 1995 an annual fee of .0025 of 1% of average daily net assets and
for the period January 1, 1996 and thereafter an annual fee of .01 of 1% of
average daily net assets; but such fee shall not exceed $15,000 per annum. In
addition, the Investment Adviser receives an equipment fee of $50 per month
and is reimbursed for its out-of-pocket costs for obtaining securities pricing
services, the license for use of portfolio accounting software, and other out-
of-pocket costs which are incurred in providing the pricing and software
services. For the fiscal years ended March 31, 1997 and 1996 and 1995, the
total portfolio accounting services fees incurred by the Trust were $21,852,
$17,844, and $6,028, respectively.
The Accounting Agreement was approved at the October 25, 1994 meeting of the
Board of Trustees by a majority of the Trustees who are neither parties to the
Accounting Agreement nor interested persons, as defined in the Investment
Company Act of 1940, of any such party. The Accounting Agreement shall
continue in effect until terminated. The Accounting Agreement may be
terminated by either party upon sixty days' prior written notice; provided,
however, that the Trust may terminate the Accounting Agreement without prior
notice in order to preserve the integrity of its records from material and
continuing errors and omissions on the part of the Investment Adviser.
RELATIONSHIP OF THE TRUST, WAYNE HUMMER AND WAYNE HUMMER MANAGEMENT COMPANY
The shareholders of the Investment Adviser are the voting members of Wayne
Hummer, who own shares in proportion to their percentages of voting membership
interest. Wayne Hummer with offices at 300 South Wacker Drive, Chicago,
Illinois 60606, has been engaged in the securities brokerage business since
1931.
Wayne Hummer provides services to the Trust pursuant to a Shareholder
Service Agreement. Such services are provided at their approximate cost
(excluding labor and overhead), if any, and include the following: (1)
converting funds into or advancing Federal Funds for the purchase of Shares as
well as transmitting purchase orders to the Transfer Agent; (2) maintaining
records of Shareholders' transactions for federal and state tax and securities
law purposes as well as for other purposes; (3) preparing and transmitting
federal and state tax informational returns relating to Share transactions to
Shareholders and governmental agencies; (4) recording dividends on
Shareholders' brokerage
B-10
<PAGE>
accounts with Wayne Hummer and forwarding cash dividends to Shareholders; (5)
generating and transmitting transaction confirmations (if required) and
monthly statements to Shareholders; (6) transmitting redemption requests to
the Transfer Agent and transmitting the proceeds of redemption of Shares
pursuant to Shareholder instructions when such redemption is effected other
than in connection with the checkwriting privilege; (7) transmitting proxy
materials and reports to the Trust's Shareholders; (8) maintaining the
automatic Share purchase and redemption "sweep program" as described in the
Trust's prospectus; and (9) providing telephonic and written communications
with respect to Shareholder account inquiries. For the three fiscal years
ended March 31, 1997, 1996, and 1995, the Trust reimbursed the Shareholder
Service Agent $127,739, $120,930, and $114,800, respectively.
Wayne Hummer also acts as the sole Distributor of the Trust's Shares
pursuant to a Distribution Agreement. The terms of the Distribution Agreement
as to continuation, termination and assignment are identical to those of the
Investment Advisory and Management Agreement described above, except that the
Distributor may only terminate the Distribution Agreement upon 90 days'
written notice to the Trust. The Distribution Agreement provides that the
Distributor will hold itself available to receive or will arrange to receive
orders for Shares which continuously will be issued by the Trust and that the
Distributor pays all costs and expenses in connection with the distribution of
the Trust's Shares. The Distributor is not obligated thereunder to sell any
certain number of Shares.
As of January 1, 1991 the Investment Adviser entered into an Agreement with
Wayne Hummer whereby the Investment Adviser agreed to pay to Wayne Hummer the
following: (a) for distribution services rendered to the Trust under the
Distribution Agreement, an amount equal to 35% of the gross revenues generated
from the rendering of investment advisory services to the Trust, not to exceed
in the aggregate for a particular fiscal year, however, the net profit (before
taxes and before payment of the fees so payable) earned by the Investment
Adviser for such year for the rendering of such advisory services, and (b) for
services rendered by Wayne Hummer to Trust Shareholders under the Shareholder
Service Agreement, an amount equal to 130% of the unreimbursed overhead and
labor expenses incurred by Wayne Hummer in rendering such services. The
Agreement also provides for similar payments to be made by the Investment
Adviser to Wayne Hummer for distribution and shareholder services rendered to
WHIT and its shareholders.
The following persons, all of whom, except as specified, are located at 300
South Wacker Drive, Chicago, Illinois 60606, have been members or employees of
Wayne Hummer for at least the past five years and presently are members of
Wayne Hummer: William B. Hummer; Philip Wayne Hummer; Harry Flagg Baum;
William A. Rogers; Robert F. Kahlfeldt; Philip M. Burno; Joseph A. Piekarczyk;
G. Ted Becker; Steven R. Becker; W. Douglas Carroll; Richard J. Kosarek;
Raymond L. Kratzer; Jean E. Williams; Linda C. Becker; Thomas J. Rowland;
Laura A. Kogut; David P. Poitras; Richard Wholey, Jr.; Peder H. Culver; and
Donald G. Hack. Ronald A. Tyrpin, a member of Wayne Hummer, joined the firm in
September, 1992. The George E. Barnes Family Trust(5) is a Class C member of
Wayne Hummer and prior to April 1, 1996, had been limited partner of Wayne
Hummer & Co. since April, 1986. Robert H. Chase(6) is a Class D member of
Wayne Hummer and prior to April 1, 1996, had been a limited partner since
January, 1992.
As noted in the preceding discussion of Trustees and Officers, certain of
the members of Wayne Hummer are also officers, directors or employees of the
Investment Adviser, as well as officers and interested persons, as defined in
the Investment Company Act of 1940, of the Trust.
- --------
(5) George E. Barnes, grantor of the Family Trust, was a founding partner of
Wayne Hummer & Co. and was a general partner through March, 1986. Mr.
Barnes' address is 46-730 Amir Drive, Palm Desert, California 92260.
(6) Robert H. Chase was a general partner of Wayne Hummer & Co. through
December, 1991. His address is 1246 Nicolet Circle, Appleton, Wisconsin
54915.
B-11
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
Please refer to the description of procedures for the purchase and
redemption of Shares contained in the prospectus under "Purchase of Shares"
and "Redemption of Shares," which are incorporated herein by reference.
With regard to the checkwriting redemption privilege described in the
prospectus, it should be noted that checks which have been honored will be
returned periodically to Shareholders by Wayne Hummer. A check representing a
redemption request will be processed ahead of any other redemption
instructions issued by a Shareholder and before any automatic redemptions are
effected in a Shareholder's account pursuant to the "sweep program" as
described in the prospectus under "Redemption of Shares." The check redemption
procedure may be suspended or terminated at any time by the Trust, Wayne
Hummer or State Street Bank and Trust Company.
There is no charge to the Shareholder for normal use of the check redemption
privilege other than as set forth below. The Trust may charge Shareholders its
costs (currently $5) for (1) each stop payment; (2) each check written for an
amount under $500; (3) each check written in excess of $250,000; and (4) each
check returned because there are insufficient Shares in the account against
which the check is drawn. In addition, the Trust reserves the right to impose
a charge for the checkwriting privilege at a future date, to charge for
excessive use of the checkwriting privilege and to make additional charges to
recover the costs of providing this service. All charges will be deducted from
any existing or future credit balance in the Shareholder's Wayne Hummer
brokerage account.
By opening an account with Wayne Hummer, a Shareholder is agreeing with the
Trust and Wayne Hummer that neither the Trust nor Wayne Hummer is responsible
for the authenticity of redemption instructions or the delivery of the
redemption proceeds by check from Wayne Hummer.
Redemption requests made other than by check normally will be credited to a
Shareholder's Wayne Hummer brokerage account on the business day after the
redemption request is effective. If, at the time the redemption request is
made, a Shareholder has requested that Wayne Hummer transmit the proceeds of
redemption by mail, the proceeds normally will be mailed on the day they are
credited to the Shareholder's Wayne Hummer brokerage account, or, if the
request to transmit the proceeds by mail is made subsequent to the request to
redeem, on the next business day after receipt of the Shareholder's request to
transmit the proceeds by mail; but in either event, payment will be made
within three business days after the redemption is effective or the request to
transmit proceeds is made, respectively.
The right to receive payment or the right to redeem Shares may be suspended
for more than seven days (1) for any period (a) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings or
(b) during which trading on the New York Stock Exchange is restricted; (2) for
any period during which an emergency exists as a result of which (a) disposal
by the Trust of securities owned by it is not reasonably practicable or (b) it
is not reasonably practicable for the Trust fairly to determine the value of
its net assets; or (3) for such other periods as the Securities and Exchange
Commission may by order permit for the protection of Shareholders of the
Trust. The rules and regulations promulgated by the Securities and Exchange
Commission shall be used to determine the conditions under which trading shall
be deemed to be restricted within the meaning of (1) above and an emergency
shall be deemed to exist within the meaning of (2) above.
The value of a Shareholder's investment at the time of redemption may be
more or less than his initial cost, but normally will be $1 per Share,
depending principally on the value of the securities held in the Trust at such
time.
The Trust has made an election pursuant to Rule 18f-1 under the Investment
Company Act of 1940 to enable the Trust to elect to limit payments in cash for
large redemptions. Under the provisions
B-12
<PAGE>
of Rule 18f-1, the Trust may limit cash redemptions with respect to each
Shareholder during any 90-day period to the lesser of (1) $250,000 or (2) 1%
of the net asset value of the applicable Portfolio at the beginning of such
period. If deemed advisable by the Board of Trustees, the Trust may pay the
redemption price in excess of the amounts described above in whole or in part
in securities owned by the applicable Portfolio. The market value of such
securities shall be determined as of the close of trading on the New York
Stock Exchange on the business day on which the redemption is effective. In
such case a Shareholder might incur transaction costs if he or she sold the
securities received.
PRICING OF SHARES
The net asset value per Share of the Trust is determined on each day the New
York Stock Exchange is open for trading as of the close of trading on the
Exchange (generally 3:00 p.m. Chicago time) immediately after dividends have
been declared on each business day and at 3:00 p.m. Chicago time on each other
day during which there is a sufficient degree of trading in securities held by
the Trust so as materially to affect the net asset value of the Shares. The
net asset value per Share normally is $1.00. The net asset value per Share is
computed by dividing the value of the securities held by the Trust plus any
other assets minus all liabilities by the total number of Shares outstanding.
The Securities and Exchange Commission has issued an order of exemption from
certain provisions of the Investment Company Act of 1940 to the extent
necessary to permit the Trust to use the amortized cost method of valuing its
Portfolios' securities. As a condition of the order of exemption and pursuant
to Rule 2a-7 promulgated by the Securities Exchange Commission and Procedures
adopted by the Trust's Board of Directors pursuant thereto, the Trust will (1)
maintain a dollar-weighted average Portfolio maturity of 90 days or less, (2)
purchase only instruments having remaining maturities of one year or less, and
(3) limit Portfolio investments, including repurchase agreements, to those
United States dollar-denominated instruments which the Board of Trustees
determines present minimal credit risks, and which are of high quality, as
determined by any major rating service or, in the case of any instrument that
is not rated, of comparable quality as determined by the Board of Trustees.
The Trust, however, further will limit its investments as described under
"TRUST INVESTMENTS" above and under "INVESTMENT OBJECTIVE, POLICIES AND
RESTRICTIONS" in this Statement of Additional Information and in the
Prospectus.
The valuation of the securities held by the Trust is based upon their
amortized cost, which does not take into account unrealized securities gains
or losses. This involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may
result in periods during which the value of an instrument, as determined by
amortized cost, is higher or lower than the price the Trust would receive if
it sold the instrument. During such periods the yield to investors in the
Trust may differ somewhat from that obtained in a similar entity which uses
available indications as to market value to value its portfolio securities.
For example, if the use of amortized cost resulted in a lower (higher)
aggregate Trust value on a particular day, a prospective investor in such
Trust could obtain a somewhat higher (lower) yield and ownership interest than
would result from investment in such similar entity and existing investors
would receive less (more) investment income and ownership interest. The Trust
expects, however, that the procedures referred to in the following paragraphs
of this section will tend to minimize the differences referred to above.
The Trustees have established procedures designed to stabilize, to the
extent reasonably possible, the Trust's price per Share, as computed for the
purpose of sales and redemptions, at $1.00. Such procedures include review of
the securities holdings by the Trustees, at such intervals as they may deem
appropriate, to determine whether the net asset value per Share of the Trust
calculated by using available market quotations or market equivalents deviates
more than .50% from $1.00 per
B-13
<PAGE>
Share based on amortized cost and, if so, whether such deviation may result in
material dilution or is otherwise unfair to investors or existing
Shareholders. In such review, investments for which market quotations are
readily available will be valued at the most recent bid-asked mean or yield
equivalent for such securities or for securities of comparable maturity,
quality and type, as obtained from one or more of the major market makers for
the securities to be valued. If market quotations are not readily available
for an investment, the investment will be valued pursuant to a security
valuation matrix system that classifies investments by type, days to maturity
and quality and which system is considered dependable in producing a fair
value of such investments.
To the extent that any deviation between the Trust's net asset value based
upon available market quotations or market equivalents and $1.00 per Share
based on amortized cost exceeds .50%, the Trustees promptly will consider what
action, if any, will be initiated. In the event the Trustees determine that a
deviation exists which may result in material dilution or other unfair results
to investors or existing Shareholders, the Trustees have agreed to take such
corrective action as they consider necessary and appropriate, including the
sale of Trust instruments prior to maturity to realize gains or losses or to
shorten average portfolio maturity, withholding dividends or payment of
distributions, redeeming Shares in kind, or establishing a net asset value per
Share by using available market quotations or by using estimates of value
reflecting current market conditions selected by the Board of Trustees as
appropriate indicators of value. In addition, in the event that the Trust
incurs a loss or liability which the Trustees determine to be significant with
respect to the maintenance of a net asset value of $1.00 per Share, the
Trustees shall have the power (1) to reduce the number of Shares of the Trust
by that number of Shares which represents the amount of such loss or liability
by reducing the number of Shares of each Shareholder on a pro rata basis, (2)
to offset the pro rata amount of such loss or liability from the accrued
dividend account of each Shareholder, and/or (3) to establish an account in
the amount of such loss or liability and to offset such account and to defer
the declaration of dividends until sufficient income is obtained to reduce
such account to zero. There can be no assurance that the Trust will be able to
maintain a stable net asset value of $1.00 per share.
SHAREHOLDER VOTING RIGHTS
Please refer to the section of the Prospectus entitled "Description of
Shares--Shareholder Voting Rights," which information is incorporated herein
by reference. That section sets forth a general rule that the Trust will not
hold annual or other meetings of Shareholders but specifies several matters in
connection with which the Shareholders are entitled to vote, including "the
election or removal of one or more Trustees if a meeting is called for that
purpose." In this regard and in accordance with the Investment Company Act of
1940 (i) the Trust will hold a Shareholder's meeting for the election of
Trustees at such time as less than a majority of the Trustees holding office
have been elected by Shareholders, and (ii) if, as a result of a vacancy in
the Board of Trustees, less than 2/3 of the Trustees holding office have been
elected by the Shareholders, that vacancy will only be filled by a vote of the
Shareholders. In addition, Trustees may be removed from office by a vote of
the holders of at least 2/3 of the outstanding Shares at a meeting duly called
for that purpose, which meeting shall be held upon the written request of the
holders of not less than 10% of the outstanding Shares. Upon the written
request of the holders of Shares having a net asset value of $25,000 or
constituting 1% of the outstanding Shares stating that such Shareholders wish
to communicate with the other Shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a Trustee, the
Trust has undertaken to provide a list of Shareholders or to disseminate
appropriate materials (at the expense of the requesting Shareholders).
The Trust Agreement permits the Trustees to issue Shares in one or more
Portfolios. Only one Portfolio currently is authorized. Should more than one
Portfolio be issued, however, the Trust Agreement provides that on any matter
submitted to a vote of the Shareholders, all Shares entitled to vote,
irrespective of Portfolio, shall be voted in the aggregate and not by
Portfolio except as otherwise
B-14
<PAGE>
required by the Investment Company Act of 1940. The Trust Agreement also
expressly permits the Trustees to terminate the Trust without Shareholder
approval by notice to the Shareholders. The Investment Company Act of 1940,
however, prohibits an investment company from changing the nature of its
business so as to cease to be an investment company unless such action is
authorized by the vote of a majority of its outstanding shares.
As used in the Prospectus and this Statement of Additional Information, the
term "majority of the outstanding Shares" of either the Trust or a particular
Portfolio of the Trust means the vote of the lesser of (1) the holders of 67%
or more of the Shares of the Trust or such Portfolio present at a meeting, if
the holders of more than 50% of the outstanding Shares of the Trust or such
Portfolio are present or represented by proxy, or (2) the holders of more than
50% of the outstanding Shares of the Trust or such Portfolio.
SHAREHOLDER LIABILITY
Please refer to the section of the Prospectus entitled "Description of
Shares--Shareholder Liability" which is incorporated herein by reference.
The Trust Agreement provides that Shareholders shall not be subject to any
personal liability to any person extending credit to, contracting with or
having any claims against the Trust and that every written agreement,
obligation, instrument or undertaking made by the Trust shall contain a
provision that the same is not binding upon the Shareholders personally. The
law firm of Ropes & Gray, Boston, Massachusetts, which supervised the
organization of the Trust under Massachusetts law, is of the opinion that,
pursuant to Massachusetts law, Shareholders will not be liable personally for
contract claims under any such agreement, obligation, instrument or
undertaking governed by Massachusetts law and containing such provision when
adequate notice of such provision is given.
The Trustees intend to conduct the operations of the Trust, with the advice
of counsel, in such a way so as to avoid, as far as possible, ultimate
liability of the Shareholders for liabilities of the Trust. The Trust is
covered by insurance which the Trustees consider adequate to cover foreseeable
tort claims.
LIMITATION OF LIABILITY
The Trust Agreement provides that the Trust shall indemnify the Trustees and
Officers of the Trust against liability arising in connection with the affairs
of the Trust to the fullest extent permitted by law. The Trust Agreement also
provides that all third persons shall look solely to the Trust property for
satisfaction of claims arising in connection with the affairs of the Trust.
OTHER MATTERS
The Trust is not required to issue share certificates. Unless terminated by
vote of Shareholders holding at least a majority of the Shares entitled to
vote or by the Trustees by written notice to the Shareholders, the Trust will
continue without limitation as to duration. A Portfolio may be terminated at
any time by vote of Shareholders holding at least a majority of the Shares of
such Portfolio entitled to vote or by the Trustees by written notice to the
Shareholders of such Portfolio.
TRUST NAME
Pursuant to an agreement with the Investment Adviser, the Trust has been
granted a non-exclusive license ("License") to use the trade name and service
mark "Wayne Hummer" (the "Name"), without charge for as long as the Trust is
solvent, Wayne Hummer Management Company is the
B-15
<PAGE>
Investment Adviser to the Trust and Wayne Hummer & Co. is the Distributor. If
Wayne Hummer Management Company ceases to act as Investment Adviser or if
Wayne Hummer ceases to act as Distributor, then the Trust will be required to
change its name within 90 days of written notice from Wayne Hummer Management
Company and the Trust will be required to adopt a new Trust name, amend its
Trust Agreement to accomplish a change of Trust name, and deliver to Wayne
Hummer Management Company for destruction all materials in which the Name is
used. Wayne Hummer Management Company may exercise control over use of the
Name and the Trust has agreed to indemnify Wayne Hummer Management Company
against expenses or losses which may arise from the Trust's misuse of the Name
or out of any breach of the License regarding the use of the Name.
PERFORMANCE INFORMATION
As described in the Prospectus, the Trust's historical performance may be
shown in the form of "yield" or "effective yield." The Trust's yield is
computed in accordance with a standard method prescribed by rules of the
Securities and Exchange Commission. Under that method, the yield quotation is
based on a seven-day period and is computed as follows: The Trust's net
investment income per share (accrued interest on portfolio securities, plus or
minus amortized purchase discount or premium, less accrued expenses) is
divided by the price per share (expected to remain constant at $1.00) at the
beginning of the period ("base period return") and the result is divided by
seven and multiplied by 365 and the resulting yield figure is carried to the
nearest one hundredth of one percent. The Trust's yield for the seven-day
period ended March 31, 1997 was 4.70%.
The Trust's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of assumed
compounding. The formula for the effective yield is: [(base period return + 1)
365/7] - 1. The Trust's effective yield for the seven-day period ended March
31, 1997 was 4.80%.
Realized capital gains or losses and unrealized appreciation or depreciation
of the Trust's investments are not included in the calculation of yield or
effective yield. The Trust's yield fluctuates, and the publication of an
annualized yield quotation is not a representation as to what an investment in
the Trust will actually yield for any given future period. Actual yields will
depend not only on changes in interest rates on money market instruments
during the period in which the investment in the Trust is held, but also on
such matters as Trust expenses.
Yield fluctuations may reflect changes in the Trust's net income, and
portfolio changes resulting from net purchases or net redemptions of the
Trust's shares may affect the yield. Accordingly, the Trust's yield may vary
from day to day, and the yield stated for a particular past period is not
necessarily representative of its future yield. Since the Trust uses the
amortized cost method of net asset value computation, it does not anticipate
any change in yield resulting from any unrealized gains or losses or
unrealized appreciation or depreciation not reflected in the yield
computation, or change in net asset value during the period used for computing
yield. If any of these conditions should occur, yield quotations would be
suspended. The Trust's yield is not guaranteed, and its principal is not
insured. Although the Trust uses its best efforts to maintain its net asset
value at $1.00 per share, there can be no assurance that it will be able to do
so.
In addition, the Trust's performance may be compared to that of other money
market mutual funds tracked by Lipper Analytical Services, Inc., a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives and assets and by IBC/Donoghue's, Inc., which reports on
money market funds.
The Trust's performance also may be compared to various bank products,
including the average rate of bank and thrift institution money market deposit
accounts, Super N.0.W. accounts, passbook savings accounts and 6-month
maturity certificates of deposit. Account minimums for money market
B-16
<PAGE>
deposit accounts and Super N.0.W. accounts range upward from $2,000 and
compounding methods may vary. Super N.0.W. accounts generally offer unlimited
check writing while money market deposit accounts generally restrict the
number of checks that may be written. Bank and thrift institution deposit
accounts may be insured by the Bank Insurance Fund or Savings Association
Insurance Fund. Shareholder accounts in the Trust are not insured.
Additionally, bank passbook savings accounts compete with money market mutual
fund products with respect to certain liquidity features but may not offer all
of the features available from a money market mutual fund, such as check
writing. Bank checking accounts normally do not pay interest but compete with
money market mutual fund products with respect to certain liquidity features
(e.g., the ability to write checks against the account). Bank certificates of
deposit may offer fixed or variable rates for a set term. Withdrawal of these
deposits prior to maturity will normally be subject to a penalty. In contrast,
shares of the Trust are redeemable at net asset value (normally $1.00 per
share) next determined after a request is received, without charge.
Investors may also want to compare the Trust's performance to that of United
States Treasury Bills or Notes because such instruments represent alternative
income producing products. Treasury obligations are issued in selected
denominations. Rates of Treasury obligations are fixed at the time of issuance
and payment of principal and interest is backed by the full faith and credit
of the United States Treasury. The market value of such instruments will
generally fluctuate inversely with interest rates prior to maturity and will
equal par value at maturity. Generally the values of obligations with shorter
maturities will fluctuate less than those with longer maturities. The Trust's
yield will fluctuate. Also, while the Trust seeks to maintain a net asset
value per share of $1.00, there is no assurance that it will be able to do so.
DIVIDENDS
The Trust declares as daily dividends all of the Trust's undistributed net
investment income. The Trust's net investment income for dividend purposes is
determined by the Investment Adviser immediately prior to the determination of
net asset value per Share. See "PRICING OF SHARES" above and in the
prospectus. Net investment income of the Trust (from the time of the
immediately preceding determination thereof) consists of (1) accrued interest
income plus or minus amortized purchase discount or premium, (2) plus or minus
all short-term realized and unrealized gains and losses and (3) minus accrued
expenses (including the fees payable to the Investment Adviser). The Trust
does not expect to realize any long-term gains or losses. Dividends are
declared daily and reinvested monthly in the form of additional full and
fractional Shares at net asset value, or at the option of the Shareholder, are
paid as cash dividends monthly by credit to a Shareholder's brokerage account
with Wayne Hummer. Dividends are taxable to Shareholders whether received in
cash or reinvested in additional Shares, as described below. See "TAXES."
TAXES
Please refer to information concerning taxes which is found in the
Prospectus under the headings "Dividends" and "Taxes," which is incorporated
by reference herein.
FEDERAL INCOME TAX
The Trust intends to continue to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended, as it has since its
inception. If so qualified, the Trust will not be subject to federal income
tax to the extent that it distributes its net investment income and realized
capital gains. Distributions of net income including any short-term capital
gains are taxable to Shareholders as ordinary income, whether such
distributions are received in cash or reinvested in additional Shares.
Ordinary income distributions are not expected to qualify for the dividends-
received deduction available to corporate Shareholders.
B-17
<PAGE>
OTHER TAXES
The Trust may be subject to tax in certain states where it does business.
Further, in those states which have income tax laws, the tax treatment of the
Trust and of Shareholders with respect to distributions by the Trust may
differ from federal income tax treatment. In particular, distributions may be
subject to state and local income taxes as dividend or interest income even
though a substantial portion of such distributions may be derived from
interest on United States Government instruments which might be exempt from
such taxes if received directly by the Shareholder. Shareholders are advised
to consult their own tax advisers regarding specific questions as to federal,
state or local taxes.
INDEPENDENT AUDITORS
The Trust's independent auditors are Ernst & Young LLP, 233 South Wacker
Drive, Chicago, Illinois 60606, who audit and report on the Trust's annual
financial statements, review certain regulatory reports and the Trust's
federal income tax return, and perform other professional accounting,
auditing, tax and advisory services when engaged to do so by the Trust. The
selection of independent auditors is subject to ratification by the Trust's
Shareholders should a meeting of Shareholders be held.
CUSTODIAN AND TRANSFER AND DIVIDEND CREDITING AGENT
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, acts as Custodian for the Trust's assets and as the
Trust's Transfer and Dividend Crediting Agent.
The Custodian is responsible for holding all securities and cash of the
Trust, receiving and paying for securities purchased, delivering securities
sold upon payment therefor, receiving and collecting income from investments,
making all payments covering expenses of the Trust, and performing other
administrative duties, all as directed by authorized persons. The Custodian
does not exercise any supervisory function in such matters as purchase and
sale of portfolio securities, payment of dividends, or payment of expenses of
the Trust. The Trust has authorized the Custodian to deposit certain portfolio
securities in central depository systems as permitted under Federal law. The
Trust may invest in obligations of the Custodian and may purchase securities
from or sell securities to the Custodian.
REPORTS TO SHAREHOLDERS
The Trust sends to its Shareholders various financial reports ("Reports")
such as unaudited semi-annual financial statements and fiscal year-end
financial statements audited by the Trust's independent auditors. To reduce
expenses, only one copy of most Reports may be mailed to all accounts with the
same social security or taxpayer identification number or to all Shareholders
in the same household. Shareholders may call or write Wayne Hummer to request
that copies of Reports be mailed to each account with a common taxpayer number
or to two or more Shareholders in the same household.
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT AUDITORS
The financial statements and the report of independent auditors contained in
the Trust's annual report to Shareholders entitled "Annual Financial
Statements (Audited)" for the fiscal year ended March 31, 1997 are
incorporated herein by reference. The Trust's Annual Financial Statements
(Audited), unless previously received, must accompany this Statement of
Additional Information.
B-18
<PAGE>
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER AND BOND RATINGS
Description of Moody's Investors Service, Inc.'s two highest bond ratings:
AAA--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
AA--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities, fluctuation of
protective elements may be of greater amplitude, or there may be other
elements present which make the long-term risks appear somewhat greater than
in Aaa securities.
Description of Standard & Poor's Corporation's two highest bond ratings:
AAA--Bonds rated AAA are highest grade obligations. They possess the
ultimate degree of protection as to principal and interest. Marketwise they
move with interest rates, and hence provide the maximum safety on all counts.
AA--Bonds rated AA also qualify as high-grade obligations and, in the
majority of instances, differ from AAA issues only in a small degree. Here,
too, prices move with the long-term money market.
Description of Moody's Investors Service, Inc.'s three highest commercial
paper ratings:
Among the factors considered by Moody's Investors Service, Inc. in assigning
commercial paper ratings are the following: (1) evaluation of the management
of the issuer; (2) economic evaluation of the issuer's industry or industries
and an appraisal of the risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.
Relative differences in strength and weakness in respect to these criteria
would establish a rating in one of three classifications: Prime-1; Prime-2; or
Prime-3.
Description of Standard & Poor's Corporation's three highest commercial paper
ratings:
Commercial paper rated "A" by Standard & Poor's Corporation has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is generally rated "A" or better. The
issuer has access to at least two additional channels of borrowing. Basic
earnings and cash flow have an upward trend with allowance made for unusual
circumstances. Typically, the issuer's industry is well established and the
issuer has a strong position within the industry. The reliability and quality
of management are unquestioned. Relative strength or weakness of the above
factors determine whether the issuer's commercial paper is rated A-1, A-2 or
A-3.
B-19
<PAGE>
WAYNE
HUMMER
MONEY
FUND
TRUST
Annual
Financial Statements
Audited
March 31, 1997
<PAGE>
WAYNE
HUMMER
MONEY
FUND
TRUST
[PHOTO]
David P. Poitras
Dear Fellow Shareholder:
We are pleased to present the annual financial statements of the Wayne Hummer
Money Fund Trust (the "Fund") for the year ended March 31, 1997. Net assets
under management at the end of the year totaled $238,237,876, an increase of
5.3% for the year. Since its inception, the Fund has continued to meet its
objectives of liquidity and stability, which are the most important
considerations of short-term investing.
The seven day average yield on the Fund's portfolio for the period ended March
31, 1997, was 4.70%; if dividends were reinvested the effective yield was 4.80%.
Since these figures represent historical data, future yields may be higher or
lower. Due to the highly liquid nature of the portfolio, the Fund has been able
to take advantage of the Federal Reserve's increase in short-term interest rates
which occurred on March 25, 1997. We expect interest rates to rise slightly,
then remain stable for the rest of the year.
Since the Fund's objective is preservation of capital and maintenance of
liquidity, we do not purchase investments that we perceive to be risky or
potentially volatile. We also pay close attention to the maturity structure,
credit quality, diversification, and market price exposure of the Fund's
portfolio. You can be assured the Fund adheres to the same strict criteria which
rating agencies use to assign the highest rating to money market funds.
As you know, the Fund provides a vehicle for earning a yield on investments
which reflects changes in current rates. Additionally, the Fund offers
convenient services such as automatic monthly purchases and check writing
privileges. You can make investing easy by having money deducted directly from
your checking, savings or payroll check. Your Wayne Hummer Investment Executive
will personally handle your transactions and answer any questions.
We appreciate your continued support of the Fund and ask that you call or write
us if you have any questions about the Fund or your account.
Sincerely,
/s/ David P. Poitras
David P. Poitras
President
Wayne Hummer Money Fund Trust
An investment in the Fund is not a deposit or obligation of or guaranteed or
insured by the U.S. Government, any bank, the Federal Deposit Insurance
Corporation, or any other agency. There can be no assurance that the Fund will
be able to maintain a stable net asset value of $1.00 per share.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
--------------
<S> <C>
Assets
Investments, at amortized cost ............................. $238,180,881
Cash ....................................................... 32,669
Interest receivable ........................................ 374,987
Prepaid expenses ........................................... 34,326
Insurance deposit .......................................... 18,775
------------
Total assets ................................. 238,641,638
Liabilities and Net Assets
Dividends payable .......................................... 244,339
Due to Wayne Hummer Management Company ..................... 101,605
Accounts payable ........................................... 57,818
------------
Total liabilities ............................ 403,762
------------
Net assets applicable to Shares
outstanding, equivalent to $1.00 per Share ............... $238,237,876
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Year ended
March 31, 1997
--------------
<S> <C>
Interest income ........................................... $11,926,831
Expenses:
Management fee .......................................... 1,097,662
Transfer agent fees ..................................... 144,100
Shareholder service agent fees .......................... 127,739
Registration costs ...................................... 50,232
Custodian fees .......................................... 48,700
Professional fees ....................................... 39,000
Printing costs .......................................... 37,183
Trustee fees ............................................ 24,519
Portfolio accounting fees ............................... 21,852
Insurance costs ......................................... 14,920
Other ................................................... 11,682
-----------
Total expenses .............................. 1,617,589
-----------
Net increase in net assets resulting
from operations ......................................... $10,309,242
===========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Year ended March 31,
1997 1996
------ ------
<S> <C> <C>
Operations:
Net investment income ...................................................... $ 10,309,242 $ 9,838,725
Dividends to Shareholders from net investment income ......................... (10,309,242) (9,838,725)
Capital Share transactions (dollar amounts and number of Shares are the same):
Proceeds from Shares sold .................................................. 552,545,079 521,966,037
Shares issued upon reinvestment of dividends ............................... 9,906,164 9,405,599
------------- -------------
562,451,243 531,371,636
Less payments for Shares redeemed .......................................... (550,486,447) (460,346,433)
------------- -------------
Increase due to Capital Share transactions ................................. 11,964,796 71,025,203
Net assets at beginning of the year .......................................... 226,273,080 155,247,877
------------- -------------
Net assets at end of the year ................................................ $ 238,237,876 $ 226,273,080
============= =============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a Share outstanding throughout each year)
Year ended March 31,
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income............................... 0.04 0.05 0.04 0.02 0.03
Less dividends from net investment income........... (0.04) (0.05) (0.04) (0.02) (0.03)
------- ------- ------- ------- -------
Net asset value, end of year.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total return.......................................... 4.80% 5.18% 4.24%(a) 2.47% 2.83%
Ratios and Supplementary Data
Net assets, end of year ($000's).................... 238,238 226,273 155,248 153,529 158,170
Ratio of total expenses to average net assets....... .74% .79% .80% .80% .79%
Ratio of net investment income to average net assets 4.70% 5.04% 4.16% 2.44% 2.80%
</TABLE>
(a) The total return includes the effect of the capital contribution of $0.0011
per Share from Wayne Hummer Investments LLC. The return without the capital
contribution would have been 4.12%.
See accompanying notes to financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
March 31, 1997
PRINCIPAL RATE MATURITY DATE
AMOUNT COMMERCIAL PAPER (74.25%) % (1997) VALUE
- ----------- ---------------- --------- ------------- -------
BANKING (5.41%)
<S> <C> <C> <C> <C>
$ 5,300,000 First Chicago Financial Corp.................................................. 5.511 04/07 $ 5,295,204
1,300,000 The Northern Trust Corp....................................................... 5.371 04/10 1,298,281
3,200,000 First Chicago Financial Corp.................................................. 5.367 04/17 3,192,491
2,490,000 SunTrust Banks, Inc........................................................... 5.412 04/23 2,481,905
630,000 First Chicago Financial Corp.................................................. 5.490 05/13 626,046
----------
12,893,927
BROKERAGE (3.89%)
2,600,000 Merrill Lynch & Co., Inc...................................................... 5.364 04/01 2,600,000
1,455,000 Merrill Lynch & Co., Inc...................................................... 5.454 05/19 1,444,640
3,300,000 Merrill Lynch & Co., Inc...................................................... 5.502 05/27 3,272,383
2,000,000 Merrill Lynch & Co., Inc...................................................... 5.659 10/09 1,942,488
----------
9,259,511
BUSINESS FINANCE (20.79%)
6,500,000 Ford Motor Credit Co.......................................................... 5.400 04/08 6,493,276
1,500,000 General Electric Capital Corp................................................. 5.446 04/14 1,497,097
1,420,000 Ameritech Capital Funding Corp................................................ 5.375 04/14 1,417,287
1,000,000 General Electric Capital Corp................................................. 5.396 04/16 997,788
5,500,000 J.C. Penney Funding Corp. .................................................... 5.349 04/21 5,483,928
5,000,000 GE Credit Cap. Services of Puerto Rico, Inc................................... 5.444 04/24 4,982,910
590,000 Ford Motor Credit Co.......................................................... 5.419 05/01 587,384
2,850,000 Ford Motor Credit Co.......................................................... 5.420 05/02 2,836,944
2,000,000 J.C. Penney Funding Corp. .................................................... 5.432 05/05 1,989,932
2,275,000 National Rural Utilities Cooperative Finance Corp............................. 5.577 05/07 2,262,556
5,000,000 Pitney Bowes Credit Corp...................................................... 5.424 05/08 4,972,661
1,000,000 GE Credit Cap. Services of Puerto Rico, Inc................................... 5.372 05/19 992,987
4,000,000 National Rural Utilities Cooperative Finance Corp............................. 5.434 05/20 3,971,035
3,000,000 Pitney Bowes Credit Corp...................................................... 5.653 05/23 2,976,037
1,920,000 General Electric Capital Corp................................................. 5.422 05/30 1,903,323
1,900,000 J.C. Penney Funding Corp. .................................................... 5.476 06/02 1,882,494
830,000 Pitney Bowes Credit Corp...................................................... 5.534 06/10 821,285
2,500,000 J.C. Penney Funding Corp. .................................................... 5.495 06/25 2,468,420
1,000,000 Pitney Bowes Credit Corp...................................................... 5.505 07/08 985,436
----------
49,522,780
OIL AND GAS (6.75%)
5,000,000 Equitable Resources Inc....................................................... 5.410 04/07 4,995,558
3,700,000 Chevron Transport Corp........................................................ 5.398 05/13 3,677,165
4,500,000 Chevron Transport Corp........................................................ 5.516 06/13 4,450,907
3,000,000 Chevron Transport Corp........................................................ 5.501 07/03 2,958,538
----------
16,082,168
PERSONAL FINANCE (13.45%)
2,705,000 Commerical Credit Co.......................................................... 5.315 04/03 2,704,212
5,765,000 Associates Corp. of North America............................................. 5.382 04/11 5,756,513
5,334,000 Beneficial Corp............................................................... 5.445 04/25 5,314,975
2,635,000 Norwest Financial Inc......................................................... 5.418 04/30 2,623,708
4,431,000 Beneficial Corp............................................................... 5.661 05/09 4,405,042
500,000 Norwest Financial Inc......................................................... 5.462 05/16 496,656
1,645,000 Commerical Credit Co.......................................................... 5.462 05/16 1,633,999
5,823,000 Associates Corp. of North America............................................. 5.441 05/28 5,773,951
2,990,000 Norwest Financial Inc......................................................... 5.459 06/20 2,954,652
390,000 Norwest Financial Inc......................................................... 5.459 06/20 385,389
----------
32,049,097
PHARMACEUTICALS (7.02%)
8,900,000 Schering-Plough Corp.......................................................... 5.376 04/29 8,863,450
8,000,000 Eli Lilly & Co................................................................ 5.503 07/30 7,857,867
----------
16,721,317
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (CONTINUED)
PRINCIPAL RATE MATURITY DATE
AMOUNT TELECOMMUNICATIONS (5.59%) % (1997) VALUE
- ----------- --------- ------------- -----------
<S> <C> <C> <C> <C>
$ 4,100,000 Southwestern Bell Telephone Co................................................ 5.351 04/10 $ 4,094,598
5,004,000 Bellsouth Telecommunications Inc.............................................. 5.337 04/18 4,991,594
4,300,000 AT&T Corp..................................................................... 5.398 07/17 4,233,030
-----------
13,319,222
MISCELLANEOUS (11.35%)
10,000,000 AON Corp...................................................................... 5.375 04/01 9,998,524
2,860,000 Madison Gas & Electric Co..................................................... 5.628 04/25 2,849,456
823,000 WMX Technologies Inc.......................................................... 5.433 05/06 818,735
5,175,000 WMX Technologies Inc.......................................................... 5.433 05/06 5,148,183
1,000,000 WMX Technologies Inc.......................................................... 5.644 05/13 993,548
2,945,000 WMX Technologies Inc.......................................................... 5.444 05/20 2,923,635
4,395,000 DuPont (E.I.) de Nemours & Co................................................. 5.456 08/06 4,313,136
-----------
27,045,217
-----------
TOTAL COMMERCIAL PAPER........................................................ 176,893,239
-----------
BANKERS ACCEPTANCES (12.76%)
-------------------
5,000,000 NationsBank, N.A. (South), Atlanta, GA........................................ 5.356 04/03 4,998,533
2,600,000 LaSalle National Bank, Chicago, IL............................................ 5.341 04/09 2,596,887
1,700,000 Northern Trust Co., Chicago. IL .............................................. 5.382 04/09 1,697,998
3,800,000 The Northern Trust Co., Chicago, IL........................................... 5.668 04/23 3,787,065
1,580,573 SunTrust Bank, Atlanta, Atlanta, GA.......................................... 5.343 04/25 1,575,041
2,000,000 NationsBank of Texas N.A., Dallas, Texas...................................... 5.407 04/28 1,992,035
1,000,000 Republic National Bank of New York............................................ 5.451 05/27 991,708
5,000,000 SunTrust Bank-Atlanta, Atlanta, GA............................................ 5.566 06/10 4,947,208
1,000,000 NationsBank, N.A. (South), Atlanta, GA........................................ 5.511 07/14 984,545
2,520,000 Northern Trust Co., Chicago. IL .............................................. 5.518 07/22 2,478,056
1,400,000 Republic National Bank of New York............................................ 5.463 08/01 1,374,902
3,027,000 NationsBank, N.A. (South), Atlanta, GA........................................ 5.440 08/11 2,968,619
-----------
TOTAL BANKERS ACCEPTANCES..................................................... 30,392,597
-----------
US GOVERNMENT AGENCY NOTES (5.87%)
--------------------------
2,000,000 Federal National Mortgage Assoc. (a).......................................... 5.650 04/08 1,999,848
2,000,000 Federal Home Loan Banks (a)................................................... 5.600 04/08 1,999,465
310,000 Federal Home Loan Mortgage Corp............................................... 5.372 05/19 307,826
875,000 Federal Home Loan Banks....................................................... 5.575 06/16 875,526
1,000,000 Federal Home Loan Banks....................................................... 5.636 06/23 1,000,197
3,270,000 Federal Farm Credit Banks..................................................... 5.431 07/01 3,273,961
2,500,000 Federal Home Loan Bank........................................................ 5.392 07/10 2,463,611
2,000,000 Federal Home Loan Banks....................................................... 5.780 01/28/98 2,000,000
64,000 United States Treasury Bill .................................................. 5.654 02/05/98 61,068
-----------
TOTAL GOVERNMENT AGENCIES..................................................... 13,981,502
-----------
CORPORATE AND BANK NOTES (5.00%)
------------------------
BANKING (3.06%)
1,000,000 Key Bank of Washington, Tacoma, Wash. (a)..................................... 5.338 04/10 999,654
1,000,000 Harris Trust & Savings Bank, Chicago, IL...................................... 6.100 06/17 999,879
1,400,000 LaSalle National Bank, Chicago, IL ........................................... 5.500 07/01 1,400,000
1,600,000 LaSalle National Bank, Chicago, IL ........................................... 5.520 07/07 1,600,000
1,300,000 LaSalle National Bank, Chicago, IL ........................................... 5.530 07/14 1,300,000
1,000,000 LaSalle National Bank, Chicago, IL ........................................... 6.000 03/19/98 1,000,000
-----------
7,299,533
MISCELLANEOUS (1.94%)
1,600,000 SAFECO Corporation............................................................ 6.000 05/01 1,603,436
1,000,000 General Electric Capital Corp................................................. 5.596 07/01 1,008,098
2,000,000 Kellogg Co.................................................................... 5.445 07/15 2,002,476
-----------
4,614,010
-----------
TOTAL CORPORATE AND BANK NOTES................................................ 11,913,543
-----------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (CONTINUED)
PRINCIPAL RATE MATURITY DATE
AMOUNT CERTIFICATE OF DEPOSIT (2.10%) % (1997) VALUE
- ---------- ---------------------- ---- ------------- -----
<S> <C> <C> <C> <C>
5,000,000 Regions Bank of Alabama............................ 5.420 04/15 5,000,000
------------
TOTAL INVESTMENTS (99.98%)......................... 238,180,881
CASH AND OTHER ASSETS, LESS LIABILITIES (0.02%).... 56,995
------------
NET ASSETS (100.0%)................................ $238,237,876
============
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS:
(a) Short-term floating rate security. Rate shown is the effective interest rate
at March 31, 1997. The date shown represents the next interest rate change
date.
(b) Interest rates represent annualized yield to date of maturity.
(c) For each security, cost (for financial reporting and federal income tax
purposes) and carrying value are the same.
See accompanying notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
Organization:
Wayne Hummer Money Fund Trust (the "Fund") is an open-end management
investment company organized as a Massachusetts business trust. It commenced
investment operations on April 2, 1982. The Fund may issue an unlimited
number of full and fractional units of beneficial interest ("Shares") without
par value in one or more series ("Portfolios"). At March 31, 1997, Shares of
only one series were outstanding. The investment objective of the Fund is to
maximize current income to the extent consistent with preservation of capital
and maintenance of liquidity.
1. Significant Accounting Policies
Security Valuation
Investments are stated at value. The Fund utilizes the amortized cost method
to determine value. In the event that a deviation of 1/2 of 1% or more exists
between a Portfolio's $1.00 per Share net asset value and the net asset value
as calculated by valuing the Portfolio securities based upon market
quotations, if available, or otherwise based upon a matrix system approved by
the Board of Trustees, or if there is any other deviation which the Fund
believes would result in a material dilution to Shareholders or purchasers,
the Board of Trustees of the Fund promptly will consider what action should
be taken.
Security Transactions and Investment Income
Security transactions are accounted for on the trade date. Investment income
is recorded on the accrual basis and includes amortization of premium and
discount on investments.
2. Fund Share Valuation and Dividends to Shareholders
Fund Shares are sold and redeemed on a continuous basis at net asset value.
Net asset value per Share is determined on each day the New York Stock
Exchange is open for trading as of the close of trading on the Exchange by
dividing the value of net assets (total assets less liabilities) by the total
number of Shares outstanding. Dividends are declared daily and distributed
monthly in the form of additional Shares at net asset value unless the
Shareholder elects to have dividends paid in cash, in which case they are
credited monthly to the Shareholder's brokerage account with Wayne Hummer
Investments LLC.
3. Federal Income Taxes
It is the Fund's policy to comply with the special provisions of the Internal
Revenue Code available to investment companies and, in the manner provided
therein, to distribute all of its taxable income, as well as any net realized
gain on sales of investments. Such provisions were complied with and
therefore no federal income tax provision is required.
4. Transactions With Affiliates
The Fund has an Investment Advisory and Management Agreement and a Portfolio
Accounting Services Agreement with Wayne Hummer Management Company
("Investment Adviser"), and a Distribution Agreement and a Shareholder
Service Agreement with Wayne Hummer Investments LLC ("Distributor and
Shareholder Service Agent"). The shareholders of the Investment Adviser are
the Voting Members of the Distributor and Shareholder Service Agent. For
advisory and management services and facilities furnished, the Fund pays fees
on a declining annual basis ranging from .50 of 1% on the first $500 million
of average daily net assets to .275 of 1% of average daily net assets in
excess of $2.5 billion. The Investment Adviser is obligated to reimburse the
Fund to the extent that the Fund's ordinary operating expenses, including the
fee of the Investment Adviser, exceed 1% of average daily net assets on an
annual basis. During the year ended March 31, 1997, the Fund incurred
management fees of $1,097,662.
For portfolio accounting services, the Fund pays the Investment Adviser
a fee based on the level of average daily net assets plus out-of-pocket
expenses. The Fund reimburses the Shareholder Service Agent for the
approximate cost of processing Fund Share transactions and maintaining
Shareholder accounts.
Certain trustees of the Fund are also officers or directors of the Investment
Adviser or Voting Members of the Distributor and Shareholder Service Agent.
During the year ended March 31, 1997, the Fund made no direct payments to
its officers and incurred trustee fees for its unaffiliated trustees
of $24,519.
4
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Wayne Hummer Money Fund Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Wayne Hummer Money Fund Trust as of March 31,
1997, and the related statements of operations for the year then ended and
changes in net assets for each of the two years in the period then ended, and
financial highlights for each of the fiscal years since 1993. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
March 31, 1997, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Wayne
Hummer Money Fund Trust as of March 31, 1997, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the periods then ended, and financial highlights for each of the fiscal years
since 1993, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
May 2, 1997
==============================================================================
BOARD OF TRUSTEES
Philip M. Burno
Chairman
Steven R. Becker
Charles V. Doherty
Joel D. Gingiss Member of 100% NO-LOAD(TM)
Patrick B. Long MUTUAL FUND COUNCIL
Eustace K. Shaw
==============================================================================
[LOGO]
WAYNE HUMMER
INVESTMENTS LLC
This brochure must be preceded or accompanied by a current prospectus of the
Wayne Hummer Money Fund Trust.
300 South Wacker 200 E. Washington Street
Chicago, Illinois Appleton, Wisconsin
60606-6607 54911-5468
1.800.621.4477 (toll-free) 1.800.678.0833 (toll-free)
(312) 431.1700 (local) (414) 734.1474 (local)
5
<PAGE>
PART C
WAYNE HUMMER MONEY FUND TRUST
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Index to Financial Statements and Supporting Schedules:
1. Included in Part A of this Registration Statement:
(i) Condensed Financial Information - Per Share Income and
Capital Changes.
2. Included in Part B of this Registration Statement through
incorporation by reference to the financial statements in the
Fund's annual report to Shareholders for the fiscal year ended
March 31, 1997:
(i) Report of Independent Auditors
(ii) Statement of Assets and Liabilities at March 31, 1997
(iii) Statement of Operations for the year ended March 31,
1997
(iv) Statement of Changes in Net Assets for the years ended
March 31, 1997 and 1996
(v) Portfolio of Investments at March 31, 1997
(vi) Notes to Financial Statements
3. Included in Part C of this Registration Statement:
(i) Schedule I has been omitted as the required information is
presented in the Portfolio of Investments at March 31,
1997, which is included in Part B.
(ii) Schedules II, III and IV, V are omitted as the required
information is not present.
C-1
<PAGE>
(b) Exhibits:
1. Declaration of Trust 1/
-
1(a). Amendment to Agreement and Declaration of Trust, dated
July 12, 1984 1/
-
2. By-laws 1/
-
2(a). Amendment to By-laws, dated April 13, 1984 1/
-
2(b). By-laws, Amended and Restated as of October 10, 1990
3. Not applicable
4. Not applicable
5. Investment Advisory and Management Agreement 1/
-
6. Distribution Agreement 1/
-
6(a). Acknowledgment and Consent of Assignment 2/
_______________________
* Filed herewith
1/ Previously filed via EDGAR with Post-Effective Amendment No. 16
- - on or about July 27, 1995 and incorporated herein by reference.
2/ Previously filed with Post-Effective Amendment No. 17 on July
- - 26, 1996 and incorporated herein by reference.
C-2
<PAGE>
7. Not applicable
8(a). Custodian Agreement 1/
-
8(b). Amendments to Custodian Agreement 1/
-
9(a). Shareholder Service Agreement 1/
-
9(a)(i). Revised Schedule A to Shareholder Service Agreement,
effective November 1, 1985 1/
-
9(a)(ii). Acknowledgement and Consent of Assignment
9(b). Transfer and Dividend Crediting Agency Agreement 1/
-
9(c). Trade Name and Service Mark License Agreement 1/
-
9(d). Portfolio Accounting Services Agreement 1/
-
10. Not applicable
C-3
<PAGE>
*11(a) Consent of Ernst & Young LLP
*11(b) Representation of Vedder, Price, Kaufman
& Kammholz
12. Not applicable
13. Investment Letter from Wayne Hummer Management Company
to the Trust 1/
-
14(a). IRA Prototype Plan and Documents 1/
-
14(b). SEP Prototype Plan and Documents 1/
-
14(c). Defined Contribution Prototype Plans and Documents 1/
-
15. Not applicable
16. Computation of Performance Quotations 1/
-
*27. Financial Data Schedule
C-4
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
Not applicable.
Item 26. Number of Holders of Securities
Number of
Title of Class Record Holders
-------------- --------------
Money Market Portfolio Shares ............ 14,586
(Information supplied as of June 30, 1997)
Item 27. Indemnification
The information required by this item is incorporated herein by reference
to (a) Item 4 of Part II of Pre-Effective Amendment No. 1 and (b) Item 10 of
Part II of Post-Effective Amendment No. 1, and (c) Item 4 of Part II of Post-
Effective Amendment No. 3 to the Form N-1 Registration Statement for Wayne
Hummer Money Fund Trust, File No. 2-75443, filed on or about March 26, 1982,
April 20, 1982 and May 24, 1983 respectively.
Item 28. Business and Other Connections of Investment Adviser
Wayne Hummer Management Company, Registrant's investment adviser and
portfolio accounting agent, is a corporation organized under the laws of
Illinois on November 30, 1981. Wayne Hummer Management Company also acts as
investment adviser and portfolio accounting agent to Wayne Hummer Investment
Trust, a registered investment company, and as investment adviser to individual,
fiduciary and corporate clients. Set forth below is information as to any other
business, vocation or employment of a substantial nature in which each director
or officer of the Registrant's investment adviser is, or at any time during the
past two fiscal years has been, engaged for his own account or in the capacity
of director, officer, employee, partner or trustee:
C-5
<PAGE>
Harry Flagg Baum, Wayne Hummer Investments Voting Member
Director L.L.C., securities bro-
kerage firm
Steven R. Becker, Wayne Hummer Investments Voting Member
Director L.L.C., securities bro-
kerage firm
Wayne Hummer Investments Trustee
Trust, registered
investment company
Registrant Trustee
G. Ted Becker, Wayne Hummer Investments Voting Member
Treasurer L.L.C., securities bro-
kerage firm
Philip M. Burno, Wayne Hummer Investments Voting Member
Director L.L.C., securities bro-
kerage firm
Wayne Hummer Investment Chairman of the
Trust, registered Board of Trustees
investment company
Registrant Chairman of the
Board of Trustees
Philip Wayne Wayne Hummer Investments Voting Member
Hummer, L.L.C., securities bro-
Chairman kerage firm
and Director
David P. Poitras Wayne Hummer Investments Voting Member
Vice President L.L.C., securities bro-
kerage firm
Registrant President
Wayne Hummer Investment Vice President
Trust, registered
investment company
C-6
<PAGE>
Name and Position Name of Company and/or
with Investment Adviser Principal Business Capacity
- ----------------------- ---------------------- --------
William A. Rogers, Wayne Hummer Investments Voting Member
Secretary L.L.C., securities bro-
and Director kerage firm
Thomas J. Rowland, Wayne Hummer Investments Voting Member
President L.L.C., securities bro-
kerage firm
Wayne Hummer Investment President
Trust, registered
investment company
Mark H. Dierkes, Wayne Hummer Investments Employee
Vice President L.L.C., securities
brokerage firm
Damaris E. Martinez, Wayne Hummer Investments Employee
Vice President L.L.C., securities bro-
kerage firm
The principal business address of each company or other entity named
above is 300 South Wacker Drive, Chicago, Illinois 60606.
Item 29. Principal Underwriter
(a) Wayne Hummer Investments L.L.C., the Registrant's distributor,
also acts as distributor of Wayne Hummer Investment Trust.
(b) The members of Wayne Hummer Investments L.L.C. are:
Positions and Offices
with Wayne Hummer Positions and Offices
Name Investments L.L.C. with Registrant
- ---- ---------------------- ---------------------
William B. Voting Member None
Hummer
Philip Wayne Voting Member None
Hummer
Harry Flagg Voting Member None
Baum
Robert H. Class D Member None
Chase
C-7
<PAGE>
Positions and Offices
with Wayne Hummer Positions and Offices
Name Investments L.L.C. with Registrant
- ---- ---------------------- ---------------------
William A. Voting Member None
Rogers
Robert F. Voting Member None
Kahlfeldt
Philip M. Voting Member Chairman of
Burno the Board of
Trustees
Joseph A. Voting Member None
Piekarczyk
G. Ted Voting Member None
Becker
Steven R. Voting Member Trustee
Becker
W. Douglas Voting Member None
Carroll
Richard J. Voting Member None
Kosarek
Raymond L. Voting Member None
Kratzer
Jean E. Voting Member None
Williams
George E. Barnes Class C Member None
Family Trust
Thomas J. Rowland Voting Member Vice President
Linda C. Becker Voting Member None
Laura A. Kogut Voting Member None
David P. Poitras Voting Member President
Richard Wholey, Jr. Voting Member None
Peder H. Culver Voting Member None
Daniel G. Hack Voting Member None
Ronald A. Tyrpin Voting Member None
C-8
<PAGE>
The principal business address of each person listed above is 300 South
Wacker Drive, Chicago, Illinois 60606. George E. Barnes, grantor of the Family
Trust, was a founding partner of Wayne Hummer & Co. and was a General Partner
until April, 1986, and had been a limited partner from April 1986 through April
1, 1996. Mr. Barnes's address is 46-730 Amir Drive, Palm Desert, CA 92260.
Robert H. Chase, whose address is 1246 Nicolet Circle, Appleton, Wisconsin
54915, was a General Partner of Wayne Hummer & Co. until December, 1991, and had
been a limited partner from December 1991 through April 1, 1996.
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained pursuant
to Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder are in the physical possession of Registrant's investment adviser,
Wayne Hummer Management Company; Registrant's shareholder service agent, Wayne
Hummer & Co.; and Registrant's transfer agent and custodian, State Street Bank
and Trust Company. The address of Wayne Hummer Management Company and of Wayne
Hummer is 300 South Wacker Drive, Chicago, Illinois 60606. The address of State
Street Bank and Trust Company is 225 Franklin Street, Boston, Massachusetts
02110.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) The Registrant undertakes to comply with the last three paragraphs of
Section 16(c) of the Investment Company Act of 1940 as though such
provisions of the Act were applicable to Registrant.
C-9
<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 of
the requirements for effectiveness of this 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, thereto
duly authorized, in the City of Chicago and State of Illinois on the 21st day of
July, 1997.
WAYNE HUMMER MONEY FUND TRUST
By /s/ David P. Poitras
------------------------------
David P. Poitras, President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on July 21, 1997 by the following
persons in the capacities indicated.
Signature Title
--------- -----
/s/ David P. Poitras President
- ----------------------
David P. Poitras
/s/ Jean M. Maurice Treasurer
- ----------------------
Jean M. Maurice
/s/ Steven R. Becker Trustee
- ----------------------
Steven R. Becker
/s/ Philip M. Burno Trustee
- ----------------------
Philip M. Burno
/s/ Joel D. Gingiss Trustee
- ----------------------
Joel D. Gingiss
/s/ Patrick B. Long Trustee
- ----------------------
Patrick B. Long
/s/ Eustace K. Shaw Trustee
- ----------------------
Eustace K. Shaw
/s/ Charles V. Doherty Trustee
- ----------------------
Charles V. Doherty
C-10
<PAGE>
EXHIBIT INDEX
-------------
Exhibits
- --------
1. Declaration of Trust 1/
-
1(a). Amendment to Agreement and Declaration of Trust, dated July 12,
1984 1/
-
2. By-laws 1/
-
2(a). Amendment to By-laws, dated April 13, 1984 1/
-
2(b). By-laws, Amended and Restated as of October 10, 1990
3. Not applicable
_______________________
* Filed herewith
1/ Previously filed via EDGAR with Post-Effective Amendment No. 16
- - on or about July 27, 1995 and incorporated herein by reference.
2/ Previously filed with Post-Effective Amendment No. 17 on July 26,
- - 1996 and incorporated herein by reference.
C-11
<PAGE>
Exhibits
- --------
4. Not applicable
5. Investment Advisory and Management Agreement 1/
-
6. Distribution Agreement 1/
-
6(a). Acknowledgment and Consent of Assignment 2/
-
7. Not applicable
8(a). Custodian Agreement 1/
-
8(b). Amendments to Custodian Agreement 1/
-
9(a). Shareholder Service Agreement 1/
-
C-12
<PAGE>
Exhibits
- --------
9(a)(i). Revised Schedule A to Shareholder Service Agreement, effective
November 1, 1985 1/
-
*9(a)(ii). Acknowledgement and Consent of Assignment
9(b). Transfer and Dividend Crediting Agency Agreement 1/
-
9(c). Trade Name and Service Mark License Agreement 1/
-
9(d). Portfolio Accounting Services Agreement 1/
-
10. Not applicable
C-13
<PAGE>
Exhibits
- --------
*11.(a) Consent of Ernst & Young LLP
*11.(b) Representation of Vedder, Price, Kaufman & Kammholz
12. Not applicable
13. Investment Letter from Wayne Hummer Management Company to the
Trust 1/
-
14(a). IRA Prototype Plan and Documents 1/
-
14(b). SEP Prototype Plan and Documents 1/
-
14(c). Defined Contribution Prototype Plans and Documents 1/
-
15. Not applicable
16. Computation of Performance Quotations 1/
-
*27. Financial Data Schedule
C-14
<PAGE>
Exhibit 11(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Independent Auditors" and to the incorporation by reference
of our report dated May 2, 1997 in the Registration Statement of Wayne
Hummer Money Fund Trust on Form N-1A and the related Prospectus filed with the
Securities and Exchange Commission in this Post-Effective Amendment No. 18 to
the Registration Statement under the Securities Act of 1933 (File No. 2-75443)
and in this Amendment No. 18 to the Registration Statement under the
Investment Company Act of 1940 (File No. 811-3359).
/s/ Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
July 21, 1997
<PAGE>
Exhibit 11(b)
July 23, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Wayne Hummer Money Fund Trust
To the Commission:
We are counsel to the above-referenced investment company (the "Fund") and
as such have participated in the preparation and review of Post-Effective
Amendment No. 18 to the Fund's Registration Statement being filed pursuant to
Rule 485(b) under the Securities Act of 1933. In accordance with paragraph
(b)(4) of Rule 485, we hereby represent that such amendment does not contain
disclosures that would render it ineligible to become effective pursuant to
paragraph (b) thereof.
Very truly yours,
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
By /s/ Robert J. Moran
-------------------------------
Robert J. Moran
RJM/cy
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