SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES EXCHANGE ACT OF 1933
Pre-effective Amendment No.
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Post-effective Amendment No. 46 (File #811-597) XX
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Registration Statement under the Investment
Company Act of 1940 Amendment #37 (File #2-9662) XX
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THE OLD DOMINION INVESTORS TRUST, INCORPORATED
110 Bank Street
Suffolk, Virginia 23434
Phone: 804-539-2396
It is proposed that this filing will become effective
(check appropriate box)
XX immediately upon filing pursuant to paragraph (b)
- ---
___ on (date) pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (b)
___ On November 15, 1989, pursuant to paragraph (b) of Rule 485-B
* Registrant has elected to register an indefinite number of shares pursuant
to Rule 270-24f-S.
<PAGE>
Pursuant to rule 404 (c) under the Securities Act of 1933, a cross
reference sheet showing the location in the Prospectus of the information
called for by the items of Form N-8B-1, is hereby furnished.
Form N-8B-1 Page Prospectus
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Item 3 1
4 3,4
5 4
7 4
8 6
16 5
21 9
22 5
26 8
30 7
<PAGE>
PROSPECTUS
[OLD DOMINION INVESTORS TRUST, INC.
A mutual fund since 1951 LOGO]
110 Bank St.,Suffolk, Va. 23434
Telephone: (757) 539-2396
Old Dominion Investors' Trust, Inc. is a diversified open-end Mutual Fund
seeking income with long-term growth of capital being a secondary objective. It
was organized July 17, 1951, as a Virginia Corporation and is intended as a
medium through which investors may receive fulltime supervision of invested
funds. The manager is Investors' Security Company, Inc., which receives a
management fee of 1/2 of 1% of the average daily net assets calculated annually.
A "Statement of Additional Information" containing additional information
about the Fund has been filed with the Securities and Exchange Commission. Such
Statement is dated December 31, 1997 and has been incorporated by reference into
this prospectus. A copy of the Statement may be obtained without charge by
writing to the Fund at the above address.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS SHOULD
BE READ AND RETAINED FOR FUTURE REFERENCE.
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THE DATE OF THIS PROSPECTUS IS DECEMBER 31, 1997
<PAGE>
SUMMARY OF EXPENSES
This table is designed to assist shareholders in understanding the various
fees and expenses associated with investing in the Company. These are historical
expenses; your actual expenses may be greater or less than those shown.
<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price).......... 4.0%(1)
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of offering
price)............................................................................... none
Deferred Sales Charge (as a percentage of original purchase price or redemption
proceeds, as applicable)............................................................. none
Redemption Fees (as a percentage of amount redeemed, if
applicable).......................................................................... none
Exchange Fee........................................................................... none
ANNUAL COMPANY OPERATING EXPENSES (FOR THE YEAR ENDED AUGUST 31, 1997)
(as a percentage of average net assets)
Management Fees........................................................................ 0.50%
12b-1 Fees............................................................................. 0.09%
Other Expenses (Audit, legal shareholder services, transfer agent and custodian)....... 0.57%
Total Company Operating Expenses....................................................... 1.16%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------ ------ ------- ------- --------
<S> <C>
You would pay the following total fees and
expenses on a $1,000 investment, assum-
ing (1) 5% annual return(2) and (2) redemp-
tion at the end of each time period............. $ 51 $75 $ 101 $175
</TABLE>
- ---------------
(1) Sales charges are reduced for purchases of $100,000 or more. See
"Purchase of Shares".
(2) Use of this assumed return is mandated by the Securities Exchange
Commission and is not intended to be an illustration of past or future
investment results.
(3) These are cumulative totals; the average fees and expenses paid over a
10 year period would be approximately $18 per year.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Summary of Expenses........................... 2
Financial Highlights.......................... 3
Investment Objectives......................... 4
Investment Policy and Restrictions............ 4
Manager and Investment Advisor................ 5
Dividend Policy and Tax Status................ 6
Purchase of Shares............................ 7
Right of Accumulation......................... 7
Statement of Intention........................ 8
Pricing of Shares............................. 8
Purchase of Shares at Net
Asset Value................................. 8
Exchange Privilege............................ 9
Plan of Distribution.......................... 9
Redemption of Shares.......................... 9
Redemption From Other Funds................... 10
Individual Retirement Account................. 10
Custodian..................................... 11
Stockholders Meeting.......................... 11
Dividend Reinvestment Plan.................... 11
Systematic Withdrawal Plan.................... 11
Brokerage Allocation.......................... 11
Call Option Transactions...................... 12
Put Option Transactions....................... 13
Financial Statements.......................... 14
Application................................... 15
</TABLE>
NUMEROUS INVESTMENT COMPANIES CONTINUOUSLY OFFER THEIR SHARES TO INVESTORS.
INVESTMENT COMPANIES HAVE DIFFERENT OBJECTIVES AND TECHNIQUES AND INVOLVE
VARYING DEGREES OF RISK. SALES COMMISSIONS WHICH ARE PAID TO COMPENSATE PERSONS
WHO SELL THE FUND'S SHARES VARY AS DO MANAGEMENT CHARGES AND EXPENSE RATIOS. FOR
THE LAST YEAR, THE FUND'S TOTAL EXPENSES, INCLUDING ADVISORY FEES, WERE
APPROXIMATELY 1.16% OF AVERAGE ANNUAL NET ASSETS.
FINANCIAL HIGHLIGHTS
FOR A SHARE OUSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED AUGUST 31,
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------- ------- ------- ------
<S> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period $23.09 $21.52 $19.64 $20.24 $19.71 $ 20.09 $ 18.23 $ 23.49 $20.37
------ ------ ------ ------ ------ ------- ------- ------- ------
Income from investment
operations --
Net investment income 0.47 0.53 0.68 0.63 0.54 0.71 0.64 0.75 0.67
Net realized and
unrealized gain (loss) on
investments 5.52 2.46 2.67 0.51 1.39 0.31 2.88 (3.78) 4.37
------ ------ ------ ------ ------ ------- ------- ------- ------
Total from investment
operations 5.99 2.99 3.35 1.14 1.93 1.02 3.52 (3.03) 5.04
------ ------ ------ ------ ------ ------- ------- ------- ------
Less distributions --
Distributions from net
investment income 0.62 0.29 0.78 0.64 0.45 0.66 0.71 0.82 0.75
Distributions from
realized
gains on investments 1.65 1.13 0.44 1.10 0.95 0.74 0.95 1.41 1.17
Distributions in excess of
realized gains on
investments -- -- 0.25 -- -- -- -- -- --
------ ------ ------ ------ ------ ------- ------- ------- ------
Total distributions 2.27 1.42 1.47 1.74 1.40 1.40 1.66 2.23 1.92
------ ------ ------ ------ ------ ------- ------- ------- ------
Net asset value, end of
period $26.81 $23.09 21.52 $19.64 $20.24 $ 19.71 $ 20.09 $ 18.23 $23.49
------ ------ ------ ------ ------ ------- ------- ------- ------
------ ------ ------ ------ ------ ------- ------- ------- ------
TOTAL RETURN* 27.44% 14.31% 18.05% 5.92% 10.23% 5.29% 21.09% (13.87)% 26.29%
Average commission per share $.4073 $.4008 -- -- -- -- -- -- --
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $9,478 $7,793 $7,277 $6,918 $6,718 $ 6,745 $ 6,525 $ 6,202 $6,796
Ratio to average net
assets --
Exenses 1.16% 1.30% 1.39% 1.33% 1.17% 1.34% 1.33% 1.20% 1.54%
Net investment income 1.88% 2.35% 3.42% 3.29% 2.69% 2.73% 3.46% 3.69% 3.07%
Portfolio turnover rate 86% 119% 64% 67% 76% 54% 56% 76% 88%
<CAPTION>
1988
-------
<S> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period $ 30.97
-------
Income from investment
operations --
Net investment income 0.46
Net realized and
unrealized gain (loss) on
investments (5.95)
-------
Total from investment
operations (5.49)
-------
Less distributions --
Distributions from net
investment income 0.43
Distributions from
realized
gains on investments 4.68
Distributions in excess of
realized gains on
investments --
-------
Total distributions 5.11
-------
Net asset value, end of
period $ 20.37
-------
-------
TOTAL RETURN* (16.84)%
Average commission per share --
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $ 5,523
Ratio to average net
assets --
Exenses 1.66%
Net investment income 3.94%
Portfolio turnover rate 45%
</TABLE>
*CALCULATED WITHOUT DEDUCTION OF SALES LOAD.
3
<PAGE>
INVESTMENT OBJECTIVES
The primary investment objective of the Trust is to seek income with
long-term growth of capital being a secondary objective. It can only be changed
by shareholders approval by a majority of the outstanding voting securities as
defined by the Investment Company Act of 1940. All stocks owned by the Trust are
listed on the New York Stock Exchange or the American Stock Exchange. The
purpose of the Trust is to provide a means by which individual and institutional
investors may combine resources in order to participate in the benefits of
continuous management and diversification of their invested funds. This method
of investing is designed particularly to meet the need of investors who are
seeking diversification but who lack sufficient funds, time, or facilities to
develop and supervise a small or sizeable investment portfolio. There is no
assurance that the Trust's objective can be achieved.
The Trust does not seek extravagant yields or spectacular profit. It is
felt by management that diversification involves the spreading of risk. However,
such diversification does not eliminate the risk of investing in equity
securities.
It should be understood by the investor that the funds of the Trust are
invested in marketable securities whose prices fluctuate. Therefore, the value
of outstanding shares of the Trust are not fixed, but vary with the daily market
of those securities which constitute the Trust's Portfolio.
INVESTMENT POLICY AND RESTRICTIONS
It is the policy of the Trust to remain substantially fully invested in
common stock except during periods, which in the judgment of the management,
there appears to be danger of important stock market decline. But, pursuant to
provisions in the Trust's Charter, the management is required to have a minimum
of 50% for the Trust's total assets invested at all times in common stocks.
The Trust's Charter restricts the investments which can be made by Old
Dominion Investors' Trust, Inc. to the below listed specifications:
1. Funds of the Corporation shall be invested only in common stock,
short-term United States Treasury obligations not to exceed ninety-one
days maturity, convertible preferred stock, and convertible bonds.
2. The Trust may write covered listed call options on stocks it has
invested in and purchase covering options with respect to options the
Trust has written. Refer to Call Option transactions.
3. The Trust may write put options and purchase options with respect to
options the Trust has written. Total liabilities to the Trust from
writing put options cannot exceed 10% of the net assets of the Trust at
the time the put options are written. Refer to Put Option Transactions.
4. Funds may also be invested in Corporate Bonds. Bonds selected must be
Rated A or better. No percent has been set on the amount of bonds the
Trust can hold in its portfolio.
5. All stocks in which funds are invested must be listed on the New York
Stock Exchange or the American Stock Exchange. However, this provision
does not include corporate bonds.
6. Stock investments shall be made only in those stocks which have paid
continuous common stock dividends for a period of ten (10) years or
longer. This restriction applies to companies and their predecessors.
7. Not more than twenty-five percent (25%) of the value of the Trust's
Portfolio will be concentrated in any one industry.
4
<PAGE>
8. No more than five percent (5%) of the Trust's total asset value shall be
invested in any one stock constituting a part of the Trust's Portfolio.
The Trust will not purchase securities in excess of 2% of the total
outstanding voting shares of any one issue held in the portfolio.
9. At no time shall the Trust's Portfolio consist of less than twenty (20)
varied securities.
The management approaches its investment advisory decisions with the
essentially long-term point of view of the investor rather than that of the
trader, but securities may occasionaly be sold for investment reasons even
though they have been held for short periods. Investment reasons for selling for
short periods would be rapid appreciation of securities or rapid depreciation of
securities because of adverse market conditions.
The Trust's policy is to limit portfolio turnover to transactions necessary
to carry out investment policy, to obtain cash for redemption of its shares and
to make changes in its status for the purpose of determining tax liability. The
portfolio turnover rate for the last three years was 1995-64%, 1996-119% and,
1997-86%. The rate is calculated by dividing the lessor of purchases or sales of
portfolio securities for the fiscal year by the monthly average of the value of
the portfolio securities.
MANAGER AND INVESTMENT ADVISOR
Subject to the control and supervision of the Board of Directors,
Investors' Security Company, Inc. has been employed to supervise the investments
of the Trust. In addition, the employed management shall furnish the Trust
office facilities, attend clerical duties coincident with the Trust's
operations, furnish statistical information, compute the net asset value and
advisory fee. The investment advisory offices are located at 110 Bank Street,
Suffolk, Virginia. FPS Services, Inc. is employed by Investors' Security Co.,
Inc. to keep the records of shareholders and to be the dividend dispensing
agent.
Under a contract voted and approved on November 14, 1967, by the
stockholders, between the Trust and Investors' Security Company, Inc. the Trust
agrees to a management fee of 1/8 of one percent (1%) per quarter of the average
value of the Trust's net assets. This is an annual rate of one-half ( 1/2) of
one percent. The fee is computed daily and is paid monthly.
A contract was approved by stockholders on December 12, 1989 and will
continue for a period of one year and thereafter, indefinitely from the date of
its execution, only so long as such continuance is specifically approved at
least annually by (1) the vote of the majority of the Directors of the Trust who
are not parties to the Advisory Agreement or interested persons (as that term is
defined in the Investment Company Act of 1940) of any such party to the Advisory
Agreement, cast in person at a meeting called for that purpose of voting such
approval, and (2) either the Board of Directors of the Trust or the vote of the
majority (as defined in the Investment Act of 1940) of the outstanding voting
securities of the Trust. Under the new contract the fee was the same as the old
one. This contract may be terminated at any time without the payment of any
penalty by the Board of Directors of the Corporation, or by a vote of majority
of the outstanding voting securities of the Corporation, on not more than sixty
(60) days written notice to management. For the last year, the funds total
expenses, including advisory fees, were 1.16% of average Annual Net Assets.
The contract provides that in the event of assignment the contract shall
terminate between Investors' Security Co., Inc. and Old Dominion Investors'
Trust, Inc.
Cabell B. Birdsong has been the Portfolio Manager of the Fund since
September 1964, and also President of Investors Security Co., Inc., the
Investment Advisor to the Fund, since September 1964.
5
<PAGE>
Mark G. Hollingsworth has been with Investors Security Co., Inc. since
1990, and began as Co-manager of the Fund in June 1993. He is also a Vice
President of Investors Security Co., Inc. Mr. Hollingsworth started his career
as a financial consultant with a regional broker-dealer in 1985, and has been in
the business continuously since that time.
The names of the principal officers of Investors' Security Company, Inc.
are as follows: Cabell B. Birdsong, President and Treasurer; Imogene B. Ramsey,
Mark G. Hollingsworth, Vice Presidents; Cabell B. Birdsong owns 100% of the
outstanding shares of Investors' Security Company, Inc. and therefore controls
the Company. Investors' Security Company, Inc. was incorporated in the State of
Virginia on August 28, 1964.
DIVIDEND POLICY AND TAX STATUS
The Trust's Charter provides that dividends shall be paid from "net income"
on or about January 15, May 1, August 1, November 1, of each year to Trust
stockholders for record around the close of the 1st day of the preceding month.
The amount of such dividends shall be set by the Board of Directors, provided
that the dividends shall be so distributed in each year approximately the amount
of the "net income" received during the year. The dividend may be eligible for
the tax dividend exclusion for corporations. For the year August 31, 1997,
34.37% of the ordinary income distributions qualified for the exclusion.
"Net Income" means the amount of "income" remaining after deductions of
management expenses, auditing and legal expenses, and taxes (if any). In
addition, the Trust may make distributions from any assets legally available,
exclusive of unrealized appreciation of assets.
Old Dominion Investors' Trust, Inc. has qualified as a regulated investment
company for the latest fiscal year and meets the diversification of assets and
source of income requirements (prescribed by the Internal Revenue Code) and is
accorded conduit or "pass through" treatment when at least 90% of its taxable
income exclusive of net long-term capital gains, is distributed to shareholders.
The Trust will be taxed only on the portion of such income which it retains. In
prior years it has been the policy of the Trust to distribute to shareholders
100% of all taxable income. It is the present intention of the Trust to pay 100%
of its taxable income to shareholders during the current year. The term
"regulated investment company" does not involve supervision of management or
investment practices or policies.
Shareholders receiving a distribution of such income from the Trust shall
treat such dividend payments as ordinary income in computation of gross income
for tax purposes.
The Trust also follows the policy of distributing to the shareholders 100%
of all net long-term capital gain over its short-term capital loss, if any,
except when the Trust has capital loss carryovers. The Tax Reform Act of 1976
permits a Capital loss carryover for a period up to eight years. Such capital
gains distributed are not taxable to the Trust but are taxable to the
shareholders as a long-term gain. It is the policy of the Trust not to
distribute Capital gains when there is a Capital loss carryforward. Shareholders
receive a long-term capital gain regardless of the length of time the
shareholder has held the stock of the Trust. Advice as to tax status of each
year's dividend and distribution will be made annually and sent by mail to the
stockholders.
6
<PAGE>
PURCHASE OF SHARES
Investors' Security Co., Inc. is the Distributor of the Fund. Shares may be
purchased at the offering price, which is the net asset value plus a sales
charge, through broker-dealers who have sales agreements with the Distributor or
through the Distributor. Initial purchases must be $200.00 or more. Subsequent
purchases must be in the amount of $25 or more. All shares and fractions will be
credited to the shareholder's account. Certificates will be issued only upon
written request.
The offering price is computed at the close of business on the New York
Exchange on each day it is open. Such price applies to all purchase orders
received from authorized securities dealers by the Distributor that day,
provided that orders received after the close of the New York Stock Exchange
will receive the closing price only if such orders were received by the
securities dealers from the customers prior to such close. Purchase orders
received on other than a regular business day will be executed on the next
succeeding regular business day.
The sales charge varies as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS
PERCENTAGE OF DEALER COMMISSION
----------------------- AS PERCENTAGE OF
AMOUNT OF PURCHASE NET OFFERING THE OFFERING
AT THE PUBLIC OFFERING PRICE INVESTMENT PRICE PRICE
- --------------------------------------------------- ---------- -------- -----------------
<S> <C>
Less than $100,000................................. 4.17% 4.00% 3.75%
$100,000 to $250,000............................... 3.62 3.50 3.25
$250,000 to $500,000............................... 2.56 2.50 2.25
$500,000 and over*................................. none 1.00
</TABLE>
* Investors Security Co. will pay a 1% Dealer Commission to the broker/dealers
out of its own resources on purchases of $500,000 or more. Redemptions of
purchases of $500,000 or more that were purchased at net asset value will be
subject to a contingent deferred sales charge of 1% if such redemptions are made
within 12 months of purchase. The 1% contingent deferred sales charge would be
charged only against the amount of the original investment regardless of any
increase or decrease in the value of the investment.
If shares of the Fund are sold through authorized dealers in the United
States, such dealers received a dealers' commission which is shown in the above
table. Under certain circumstances, commissions up to the entire sales charge
may be reallowed to dealers. Such dealers might be deemed to be underwriters
within the meaning of the Securities Act of 1933.
All orders for the purchase of shares of the Fund are subject to acceptance
or rejection by the Distributor in its sole discretion. The sale of shares will
be suspended during any period when the determination of net asset value is
suspended, and may be suspended by the Board of Directors whenever in its
judgement it is in the best interest of the Fund to do so.
No sales charge is imposed in the case of shares sold as an investment to
officers, directors and bona fide, full-time employees of the Fund, the Manager
or Distributor and to certain retirement plans established for employees of
affiliated companies. Each such purchaser must give his written assurance that
the purchase is for investment and that the Fund's shares will not be resold
except through redemption.
7
<PAGE>
PURCHASE OF SHARES AT NET ASSET VALUE
Shares of the Fund may be sold at net asset value (i.e., without the
payment of any sales charge) to:
1. To banks, trust companies, pension, non-profit and charitable
organizations.
2. Registered investment advisers and investment adviser agents may make
sales to clients at net asset value.
3. Current Officers, Directors or Employees of the Fund, Investors Security
Co., Inc. or authorized dealers.
4. Net Asset Value purchases may be made with redemption proceeds from
other mutual fund complexes on which the investor has paid a front end sales
charge.
The sales of shares at net asset value are made upon the written assurance
of the purchaser that the purchase is made for investment purposes and that the
shares will not be resold except through redemption or repurchase. Investors can
be charged a fee in connection with purchases of the fund shares at net asset
value on their behalf by an investment advisor or financial institution if
informed in advance.
Forms for this purpose are available from the Fund.
RIGHT OF ACCUMULATION
Pursuant to the Right of Accumulation privilege, investors are permitted to
purchase shares at the sale charge applicable to the total of (a) the dollar
amount then being purchased plus (b) an amount equal to the then current net
asset value of the purchaser's combined holdings of the shares of all of the
funds distributed by the Distributor. To receive the Right of Accumulation,
shareholders must, at the time of purchase, give the Transfer Agent or the
Distributor sufficient information to permit confirmation of qualification.
STATEMENT OF INTENTION
The reduced sales charges set forth above apply immediately to all
purchases where the purchaser has executed a Statement of Intention calling for
the purchase within a 13 month period of an amount qualifying for a reduced
sales charge. For a description of the Statement of Intention see Part B, the
Statement of Additional Information.
PRICING OF SHARES
In determining asset value, securities are valued at the last sale price
during the preceding trading period for securities traded on the New York Stock
Exchange or the American Stock Exchange. Where such a sale is lacking, and in
the case of all other securities not so traded, the mean of the last bid and ask
price is taken. With respect to all assets on which no bid is obtainable, value
is determined in good faith by the Board of Directors. From the total value of
assets which includes accrued dividends and interest there are deducted all
actual and accrued liabilities. The amount of net assets remaining is then
divided by the number of shares outstanding to obtain the net asset value per
share. After applying selling commission and adjusting any fraction to the next
higher cent, the result is the public offering price.
8
<PAGE>
The fund prices its shares every day Monday through Friday. The fund will
not be pricing on holidays such as New Years, Presidents Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Trust reserves the right at any time to make computations of offering
prices at other times, or to suspend offerings entirely.
Net gain on sale of securities when realized and distributed (actually or
constructively) is taxable as capital gain. If the net asset value of shares
were reduced below a shareholder's cost by distribution of gain realized on sale
of securities, such distribution would be a return of investment though taxable
as stated above.
EXCHANGE PRIVILEGE
Shares of Old Dominion may be exchanged for shares of a money fund now
being offered to shareholders, currently Cash Account Trust which is managed by
Kemper Management Co. and distributed by FPS Services, Inc., a non-affiliated
investment company, whose shares may be re-exchanged for shares of Old Dominion,
each exchange being of the basis of their relative net asset values. Shares of
Old Dominion may not be exchanged for shares of the money fund unless the amount
exchanged satisfies the minimum investment requirements of the money fund.
Investors may redeem shares of Old Dominion by telephone for purposes of
exchanging such shares for shares of the currently offered money fund pursuant
to prior authorization to the Transfer Agent (FPS Services, Inc.). Investors
should review the Prospectus of the money fund prior to making an exchange.
Exchanges may only be made in states where shares of the money fund and Old
Dominion are qualified for sale.
Investors should note that an exchange may result in recognition of a gain
or loss for income tax purposes. Exchange privileges may be suspended by Old
Dominion at any time upon notice to shareholders.
Exchanges may be initiated by writing to the Transfer Agent, which is FPS
Services, Inc., 3200 Horizon Drive, P.O. Box 61503, King of Prussia, PA
19406-0903, or if the telephone privilege authorization is on file with the
Transfer Agent, they can call 1-800-441-6580, toll free, to make the exchange.
PLAN OF DISTRIBUTION
The company has a plan of distribution or "12b-1 Plan" under which it may
finance activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the board and the expenses paid under the
plan were incurred within the last 12 months and accrued while the plan is in
effect. Expenditures by the company under the plan may not exceed 0.25% of its
average net assets annually (all of which may be for service fees).
REDEMPTION OF SHARES
By Mail -- The Company will redeem its shares, upon tender in proper form,
at the net asset value next determined after receipt by the Transfer Agent which
is FPS Services, Inc., 3200 Horizon Drive, P.O. Box 61503, King of Prussia, PA
19406-0903. There is no charge for redemption of shares tendered directly to the
Transfer Agent. Shares registered in a broker's street name account must be
redeemed through the broker. Proper tender of certificate shares requires the
signatures of all persons in whose names the shares are registered, signed
exactly as their names appear on the certificates. Shares for which certificates
have not been issued may be tendered for redemption upon written request bearing
the signatures of the registered shareholders. SIGNATURES MUST BE GUARANTEED BY
A
9
<PAGE>
NATIONAL BANK OR OTHER BANK INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION; OR BY A SAVINGS AND LOAN ASSOCIATION INSURED BY THE FEDERAL SAVINGS
AND LOAN INSURANCE CORPORATION; OR BY A MEMBER FIRM OF THE NATIONAL ASSOCIATION
OF SECURITIES DEALERS, INC. THE COMPANY RESERVES THE RIGHT, IN EXTRAORDINARY
CASES, TO SPECIFY THAT SIGNATURES BE GUARANTEED BY A NATIONAL BANK OR OTHER BANK
WHICH IS INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY A MEMBER
FIRM IN GOOD STANDING OF A UNITED STATES STOCK EXCHANGE. A NOTARY PUBLIC IS NOT
AN ACCEPTABLE GUARANTOR. Additional documentation may be required for redemption
of shares held in corporate partnership or fiduciary accounts. The Transfer
Agent will not mail redemption proceeds until checks (including certified or
cashier's checks) received for shares purchased have cleared (normally not more
than 15 days). Because the Company's net asset value fluctuates, reflecting the
market value of securities owned, the amount a shareholder receives for shares
redeemed may be more or less than the amount paid for them.
Except in extraordinary circumstances and as permissible under the 1940
Act, the redemption proceeds will be paid on or before the seventh day following
receipt of proper tender.
Through a Securities Dealer -- A shareholder may redeem shares through any
securities dealer. Securities dealers may charge a service fee for handling
redemption transactions placed through them.
Reinstatement Privilege -- Shareholders may reinstate redemption proceeds
at net asset value (without sale charge) in shares of the Company. The Transfer
Agent must receive within 30 days after the date of the redemption both a
written request for reinstatement and a check not exceeding the redemption
proceeds. The reinstatement purchase will be made at the net asset value per
share next determined after such receipt. The tax status of a gain realized on a
redemption will not be affected by exercise of the reinstatement privilege, but
a loss may be nullified for tax purpose by such exercise.
INDIVIDUAL RETIREMENT ACCOUNT
Individuals may establish their own tax sheltered Individual Retirement
Account, (IRA). Regardless of income, individuals who are not covered by another
qualified retirement plan can still deduct the full amount of an IRA
contribution up to $2,000 annual -- $2,250 for married taxpayers. Even if they
are covered by another retirement plan, single taxpayers with incomes of $25,000
or less, and married taxpayers with income of $40,000 or less can still deduct
the full amounts specified above. Taxpayers who are covered by another
retirement plan whose incomes are above these levels by less than $10,000 can
deduct a portion of their IRA contributions. The nondeductible portion is
calculated by reference to the amount of income above $25,000 (single) or
$40,000 (married) as a percentage of $10,000.
The table below shows the deductibility of IRA contributions for a range of
incomes.
DEDUCTIBILITY OF IRA CONTRIBUTIONS
<TABLE>
<CAPTION>
INCOME
- ------------------- AMOUNT OVER NONDEDUCTIBLE MAXIMUM
SINGLE MARRIED $25,000/40,000 PERCENTAGE DEDUCTION
- ------- ------- ----------- ------------- ---------
<S> <C>
CONTRIBUTIONS FOR 1997
$25,000 $40,000 0 0 $ 2,000
27,500 42,500 $ 2,500 25 1,500
30,000 45,000 5,000 50 1,000
35,000 50,000 $10,000 100 0
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
INCOME
- ------------------- AMOUNT OVER NONDEDUCTIBLE MAXIMUM
SINGLE MARRIED $25,000/40,000 PERCENTAGE DEDUCTION
- ------- ------- ----------- ------------- ---------
CONTRIBUTIONS FOR 1998
<S> <C>
$30,000 $50,000 $ 0 0 $ 2,000
32,500 52,500 2,500 25 1.500
35,000 55,000 5,000 50 1.000
40,000 60,000 10,000 100 0
</TABLE>
It is suggested that participants consult with a competent tax advisor
before entering the plan. Participants have the right to revoke the plan for
seven (7) days after they have entered the plan and receive their full purchase
back. However, if participants have received copies of IRA plan 7 days in
advance of their purchase then they do not have the right for a refund.
For further details including custodian/trustee fees, see the Old Dominion
Investors' Trust, Inc. Individual Retirement Account (Terms and Conditions) and
Application available from the Distributor, which is Investors' Security
Company, Inc., 110 Bank Street, Suffolk, Virginia 23434.
CUSTODIAN
UMB Bank, 928 Grand Ave., Kansas City, MO 64141 serves as custodian.
STOCKHOLDERS' MEETING
Old Dominion Investors' Trust is not required to hold an annual meeting in
any year in which the election of directors is not required to be held under the
Investment Company Act of 1940. When an annual meeting is required under the
Investment Company Act of 1940, this corporation shall notify stockholders of
the existence of such meeting in the manner provided for special meetings and
shall conduct the meeting in the principal office of the corporation in Suffolk,
Virginia, at 8:00 P.M. on the second Monday of November of such year, if not a
legal holiday, but if a legal holiday, then on the day following, or on any
other date identified in the notice sent to each stockholder.
DIVIDEND REINVESTMENT PLAN
The Trust offers a plan whereby all income dividends and capital gains
distributions can be reinvested to purchase additional shares of the Trust at
net asset value. No sales charge is made on any such reinvestment. The
investors, who participate in this plan, may instruct FPS Services, Inc., 3200
Horizon Drive, P.O. Box 61503, King of Prussia, PA 19406-0903, the transfer
agent in writing at least 7 days prior to any record date to remit to him such
cash dividend and distributions. The investors should bear in mind that, as with
all other types of investments in securities, these plans do not assure a profit
and do not protect against depreciation in declining markets.
SYSTEMATIC WITHDRAWAL PLAN
There is available to shareholders a Systematic Withdrawal Plan under which
a fixed sum may be paid regularly to shareholders who purchase or already own
$10,000.00 or more Trust shares at the current offering price.
Depending upon the size of the payments requested and the fluctuations of
the market price of the underlying portfolio securities, redemptions for the
purpose of making such payments may reduce or even use up the investment.
Withdrawals, in this or any other investment company, concurrently with purchase
of shares, will ordinarily be disadvantageous to the investors because of
payments of duplicative distribution charges.
11
<PAGE>
BROKERAGE ALLOCATION
It is the primary consideration of the Trust to obtain the best price on
its portfolio actions. However, subject to this policy it is the intent of the
Trust's investment advisor, Investors' Security Co., Inc. to direct portfolio
securities transactions to broker-dealers who are furnishing to the investment
advisor, statistical or research information.
The Investment Advisor, Investors' Security Co., is authorized by the Trust
to use its own discretion in allocating brokerage business to broker-dealer
firms furnishing statistical and research information Investors' Security Co.,
Inc. acting as broker, received $93,861 in brokerage commissions from portfolio
transactions for the year ended August 31, 1997. The commission paid to
Investors' Security Co., Inc. represents a commission that is fair compared to
the commission fee or other remuneration received by other broker-dealers in
connection with comparable securities being traded on a securities exchange
during a comparable period of time.
The Trust's investment advisor has no way of determining the approximate
value of the services of broker-dealers who provide statistical and research
information, except that such services are furnished to the investment advisor.
While the information may be useful, it does not materially affect or reduce
expenses.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., the Advisor may consider sales of shares of the Fund
as a factor in the selection of broker-dealers to execute Fund securities
transactions when it is believed that this can be done without causing the Fund
to pay more in brokerage commissions than it would otherwise.
It is the intention of the Trust to allocate brokerage in the future in the
same manner that it has in the past. The Trust will attempt to get the best
price of execution.
CALL OPTION TRANSACTIONS
The Trust may write covered listed call options and may repurchase call
options with respect to call options the Fund has written.
The Trust will retain such stock until the option expires or is exercised
or repurchases a call option it has written.
A covered call option means that the Trust owns 100 shares of the
underlying stocks for each option it has written on that stock. Only stocks that
are listed on an organized exchange can be optioned. There is no percentage
limitation on the securities that can be written.
By writing an option on its portfolio securities the Trust agrees to sell
100 shares of common stock the ("Optional Stock") held in its portfolio at a
specified price ("strike price") prior to a specified date (the "expiration
date") if the option is exercised by the purchaser. The purchaser of an option
written by the Trust pays a sum of cash called a premium. The amount of premium
received for the sale of a listed option is determined like the price of any
other security which is listed on an exchange; that is, on a bid and ask basis.
If at or near the expiration date (listed options generally have durations
of 3, 6 or 9 months) of an option the market price of the optioned stock exceeds
the strike price of the options, the option holder must pay to the Trust the
strike price and the Trust must thereupon deliver the optioned stock to the
purchaser unless the Trust has purchased a covering option (an option with an
identical strike price, expiration date and for the same stock as an option
which the Trust has written). A covering option must
12
<PAGE>
be purchased before the option is exercised. A covering option would be
purchased if the trust wished to cancel its pre-existing obligation.
In purchasing a Covering option the premium received would be reduced by
the cost of the covering option.
If the premium received by the Trust and the strike price exceed the
Trust's basis in the optioned stock (its cost), the Trust will earn a profit on
the transaction. If the market price of the optioned stock fails to exceed the
strike price of the option by the expiration date, the option will expire
unexercised.
With respect to the writer of a Call Option, the Internal Revenue Service
has ruled as follows:
1. The premium received for writing the Option is not included in income at
the time of receipt, but is carried in a deferred account until the writer's
obligation expires through the passage of time, until the writer sells the
underlying stock pursuant to the exercise of a Call, or until the writer engages
in a closing transaction.
2. If the obligation of a writer of an Option expires through the passage
of time, the premium constitutes short-term capital gain upon such expiration.
3. If the Option is exercised, the premium received is treated as part of
the proceeds of the sale of the underlying stock. Gain or loss on such sale is
capital gain or loss, and is short-term or long-term, depending upon the holding
period of the stock involved.
4. If the writer of an Option engages in a closing transaction by payment
of an amount equivalent to the value of the Option at the time of such payment,
the difference between the amount so paid and the premium received constitutes
short-term capital gain or loss.
The earning power of the Trust's portfolio of securities will be increased
to the extent that options are written by the Trust regardless of whether the
option is exercised. When options written by the Trust are exercised, the Trust
may lose an opportunity to profit fully from a rise in the market of the
optioned stock. This would be the case where, for example, the option is
exercised and the market price of the optioned stock exceeds the strike price
plus the premium received by the Trust for writing the option. The Board of
Directors may authorize the Trust to purchase covering options when management
deems it advisable. There may be times that options the Trust wishes to
repurchase are not available. Brokerage Commission on options are
proportionately higher than on stocks.
The Trust will cover its options by delivering to the Broker who is
handling the transaction escrow receipts.
PUT OPTION TRANSACTIONS
The Trust may write Put Options and may repurchase Put Options with respect
to Put Options the Trust has written. A Put Option means that the Trust will
purchase the underlying stock of each Option it has written on that stock. Only
stocks that are listed on an organized exchange can be optioned. Total
liabilities to the Trust from writing Put Options cannot exceed 10% of the net
assets of the Trust at the time the Put Options are written.
By writing Put Options, the Trust, in effect agrees to purchase 100 shares
of common stock (the "Optioned Stock") at a specified price (strike price) to a
specified date (expiration date) if the Option is exercised by the purchaser.
The purchaser of the Put Option written by the Trust pays the Trust a sum of
cash called a premium. The amount of premium received for the sale of a listed
Option is determined
13
<PAGE>
like the price of any other security which is listed on an exchange; that is, on
a bid and ask basis. Put Options are currently listed on the various option
exchanges.
If at or near the expiration date (listed Options generally have duration
of 3, 6 and 9 months) of an Option the market price of the Optioned stock is
below the strike price of the Option, the Option will be exercised and, in that
event, the Trust must pay the purchaser of the Option the strike price, unless
the Trust has purchased a covering option (an option with identical strike
price, expiration date and for the same stock as an Option which the Trust has
written). If the Trust wishes to purchase a covering Option it must be purchased
prior to the assignment of an exercise notice. An exercise notice is assigned by
the Clearing Corporation.
With respect to the writer of a Put Option, the Internal Revenue Service
has ruled as follows:
1. The premium received for writing the Option is not included in income at
the time of receipt, but is carried in a deferred account until the writer's
obligation expires through the passage of time, until the writer purchases the
underlying stock pursuant to the exercise of a Put, or until the writer engages
in a closing transaction.
2. If the obligation of a writer of an Option expires through the passage
of time, the premium constitutes short-term capital gain upon such expiration.
3. If the Option is exercised, the premium received is treated as a
reduction in the cost of the underlying stock. Gain or loss on such sale is
capital gain or loss, and is short-term or long-term, depending upon the holding
period of the stock involved.
4. If the writer of an Option engages in a closing transaction by payment
of an amount equivalent to the value of the Option at the time of such payment,
the difference between the amount so paid and the premium received constitutes
short-term capital gain or loss.
The earning power of the Trust Portfolio of securities will be increased to
the extent that Put Options written by the Trust expire unexercised. Premiums
received for writing Put Options are retained by the Trust regardless of whether
the Option is exercised. When Put Options written by the Trust are exercised,
the net cost to the Trust of acquiring the stock at the exercise price may be
substantially above the market price prevailing at the time the Put is
exercised. This would be the case where, for example, the Option is exercised
and the market price of the Optioned stock is below the strike price less the
premium received plus transaction costs. In this case the Trust would incur a
loss.
The Board of Directors may authorize the Trust to purchase covering Put
Options when management deems it advisable. There may be times that Put Options
the Trust wishes to repurchase are not available. Brokerage commissions on
Options are proportionately higher than on stocks.
In order to write put options a segregated account will be maintained with
the custodian consisting of cash, U.S. Government Securities, or high grade debt
securities equal to the option price; i.e., the price at which the securities
underlying the options may be sold to the trust.
FINANCIAL STATEMENTS
The financial statements appearing in the Fund's Annual Report to
shareholders and the report of Briggs, Bunting & Dougherty, LLP, independent
certified public accountants, on the Annual Report are incorporated by reference
in this prospectus.
14
<PAGE>
OLD DOMINION INVESTORS TRUST, INC.
110 Bank Street
Suffolk, VA 23434
STATEMENT OF ADDITIONAL INFORMATION
December 31, 1997
This Statement of Additional Information is not a Prospectus, but should read in
conjunction with the current Prospectus for Old Dominion Investors' Trust, Inc.
dated December 31, 1997 (the Prospectus). A copy of the Prospectus may be
obtained by writing the Underwriter, Investors Security Co., Inc., 110 Bank
Street, Suffolk, VA 23434, or by calling (757) 539-2396.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
INVESTMENT OBJECTIVES AND POLICIES........................................3
MANAGEMENT OF THE FUND....................................................4
CONTROL PERSONS & PRINCIPAL HOLDERS OF SECURITIES.........................4
INVESTMENT ADVISORY AND OTHER SERVICES....................................5
BROKERAGE ALLOCATION......................................................6
CAPITAL STOCK AND OTHER SECURITIES........................................7
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED..............7
PURCHASE.........................................................7
REDEMPTION.......................................................7
PRICING..........................................................8
RIGHT OF ACCUMULATION.....................................................9
LETTER OF INTENTION.......................................................9
TAX STATUS...............................................................10
UNDERWRITERS.............................................................11
FINANCIAL STATEMENTS.....................................................11
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
It is the policy of the Trust to remain substantially fully
invested in common stock except during periods, which in the judgement of the
management, there appears to be danger of important stock market decline. But,
pursuant to provisions in the Trust's Charter, the management is required to
have a minimum of 50% for the Trust's total assets invested at all times in
common stocks.
Investors should refer to the nine Charter restrictions of investments
that can be made in Old Dominion Investors' Trust, Inc., that are listed in the
Prospectus under the heading "Investment Policies and Restrictions".
The Board of Directors of the Fund has set a restriction saying that no
more than 50% of the Fund's portfolio can be optioned at any one time. This
restriction can be changed at any time by the Board.
The Prospectus describes the policy of the Fund with respect to the
following activities:
1. The issuance of senior securities;
2. Purchases on margin and the writing of put and call options;
3. Underwriting of securities of other issues;
4. The concentration of investments in a particular industry or
group of industries;
5. The purchase or sale of real estate;
6. The making of loans to any person;
The Trust Shall Not:
(1) Participate in the underwriting of securities of other issues.
(2) Purchase real estate.
(3) Make loans to any person, (Purchase of a portion of an issue
of publicly distributed debt securities will not be considered
the making of a loan).
(4) The purchase or sale of commodities or commodity contracts.
(5) Will not invest in any other investment company.
(6) The Trust will not invest in companies for the purpose of
exercising control of management.
3
<PAGE>
(7) The Trust cannot borrow more than 33 1/3 of its total assets
(including the amount borrowed) taken a t market or other fair
value less liabilities. Investment borrowings will be made
from banks only. Any gains made with the additional borrowed
money in excess of interest will cause net asset value to rise
faster than otherwise. If the performance of the additional
securities purchased fails to cover the cost, including
interest paid on money borrowed, the net asset value will
decrease faster than normal. This is called leverage. If, due
to market fluctuations or other reasons, the value of the
Company's assets falls below the coverage requirement of the
statute, the company, within 3 business days, will reduce its
bank debt to the extent necessary. To do this, the Company may
have to sell a portion of its investments at a time when it
may be disadvantageous to do so. Also, the Trust may not
directly or indirectly pledge its assets, except that, subject
to any applicable limitations under rules promulgated by the
Federal Reserve Board, the Trust may pledge up to 15% of its
gross assets , taken at cost, to secure borrowings made within
the foregoing limitation and for temporary or emergency
purposes, which do not exceed 5% of the gross assets of the
Trust, taken at the lesser of cost or market or other fair
value. The Trust does not intend to borrow money during this
fiscal year.
The investment policies in this paragraph cannot be changed except by
vote of two-thirds (2/3) of the total outstanding stock and amendment
to the charter.
MANAGEMENT OF THE FUND
<TABLE>
<CAPTION>
Name & Address Position(s) Held With Registrant Principal Occupation
During Past 5 Years
<S> <C>
*James F. Hope President & Director Retired
**704 Jones Street
Suffolk, VA 23434
Frank M. Rawls Assistant Secretary Attorney at Law
1235 Murphys Mil Rd. Director
Suffolk, VA 23434
** Cabell B. Birdsong Secretary & Treasurer President Investors
110 Bank Street Director Security Company
Suffolk, VA 23434
4
<PAGE>
Peter D. Pruden, III Director Vice President
1201 N. Main Street Smithfield
Suffolk, VA 23434 Companies
** William B. Ballard Director Investments
1215 River Road Vice President
Suffolk, VA 23434
James F. Briggs, Jr. Director Franklin Equipment
131 Crescent Drive Company
Franklin, VA 23851
E. Grier Ferguson Director Attorney at Law
332 W. Constance Road
Suffolk, VA 23434
</TABLE>
* Interested Directors
** Investment Committee Members
The foregoing Directors and/or Officers have served in their principal
occupations as listed for the past five years or longer. There is no
relationship by blood, marriage, or adoption among the foregoing Directors
and/or Officers.
Directors are compensated at $150.00 for each meeting they attend.
Total Directors' fees were $10,260.00 for the year.
During the registrant's last fiscal year, no Director and/or Officer
received remuneration in excess of $60,000.00 for services in all capacities.
CONTROL PERSONS & PRINCIPAL HOLDERS OF SECURITIES
The Fund does not know any person who owns more than five percent (5%)
of any class of the Fund's equity securities.
INVESTMENT ADVISORY AND OTHER SERVICES
The Investment Advisor is Investors Security Co., Inc. Cabell B. Birdsong
is President. Mr. Birdsong is the Secretary and Treasurer of the Fund and thus
is an affiliated person. He owns 100% of the Investment Advisory Co. The
Investment Advisory Agreement calls for a management fee of 1/2 of 1 percent.
The fee is computed daily and is paid monthly. The Investment Advisory received
for services as Manager and Investment Advisor the sums of $42,835.00;
$38,454.00 and $34,304.00; and for the years 1997; 1996; 1995 respectively.
5
<PAGE>
There is no expense limitation.
The Investment Advisor provides the following services to the Fund:
occupancy and office rental; clerical and bookkeeping; determination of offering
and redemption prices; trading department; prospectus preparation and printing.
The Investment Advisor does not provide accounting services of
independent auditors, services of outside counsel, registration and filing fees,
stationary supplies and printing, salaries and compensation of the Fund's
interested and non-interested Directors, salaries and compensation of the Fund's
Officers who are not Directors, and reports to shareholders.
The company has a plan of distribution or "12b-1 Plan" under which it
may finance activities primarily intended to sell shares, provided the
categories of expenses are approved in advance by the board and the expenses
paid under the plan were incurred within the last 12 months and accrued while
the plan is in effect. Expenditures by the company under the plan may not exceed
0.25% of its average net asset annually (all of which may be for service fees).
During the year ended August 31, 1997, all of the payment made pursuant to the
12b-1 Plan, amounting to $7,966.00 were for service fees.
Investment Advice is received from Merrill Lynch, Dean Witter, Wheat
First Securities, and Paine Webber. Reports as to the market and specific
recommendations are provided to the Investment Advisor and are paid for through
brokerage commissions. Such information is helpful. However, the final
determination of what stock to buy and sell is made only by the Investment
Advisor and the Investment Committee.
BROKERAGE ALLOCATION
It is the primary consideration of the Trust to obtain the best price
on its portfolio actions. However, subject to this policy, it is the intent of
the Trust's Investment Advisor, Investors Security Co,. Inc., to direct
portfolio securities transactions to broker-dealers who are furnishing to the
Investment Advisor statistical or research information.
The total dollar amount of brokerage fees paid by the Trust on purchase
and sale of the Trust's portfolio securities for the latest fiscal year was
$108,000.00. Of this amount 13.1% was placed in consideration for research or
other services.
The Investment Advisor, Investors Security Co., Inc. is authorized by the
Trust to use its own discretion in allocating brokerage business to
broker-dealer firms furnishing statistical and research information. Investors
Security Co., Inc. acting as broker, received $93,861.00 for brokerage
commission from portfolio transactions for the year ended August 31, 1997. The
commissions paid to Investors Security Co., Inc. represents a commission that is
fair compared to the commission fee or other remuneration received by other
broker-dealer in connection with comparable securities being traded on a
securities exchange during a comparable period of time.
6
<PAGE>
The Board of Directors authorized the Investment Advisor to use its own
discretion in allocating brokerage business.
The Investment Advisor discounts its commission 35% on all orders,
whereas other non-affiliated broker-dealer discount their commission 25%. All
security orders affected by the Investment Advisor are presented quarterly to
the Board of Directors for their knowledge, approval and reasonableness.
Brokers are selected to effect security transactions for the Fund by
their ability to handle the transaction and their investment advice.
The Trust's Investment Advisor has no way of determining the
approximate value of the service of the broker-dealer who provide statistical
and research information, except that such services are furnished to the
Investment Advisor. While the information may be useful, it does not materially
affect or reduce expenses.
It is the intention of the Trust to allocate brokerage in the future in
the same manner that it has in the past. The Trust will attempt to get the best
price execution.
Brokerage fees for the last three years are:
1995 - $72,000.00; 1996 - $140,000.00; 1997 - $108,000.00
CAPITAL STOCK AND OTHER SECURITIES
The Fund has only one class of stock, common stock. Each share is
entitled to one vote and when issued and paid for in accordance with the terms
of the offering will be fully paid and non-assessable.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
PURCHASE - Investors Security Co., Inc. is the Distributor of the Fund.
Shares may be purchased at the offering price, which is the net asset value plus
a sales charge, through broker-dealers who have sales agreements with the
Distributor or through the Distributor. Initial purchases must be $25.00 or
more. Subsequent purchases must be in the amount of $25.00 or more.
The offering price is computed at the close of business on the New York
Stock Exchange on each day it is open. Such price applies to all purchase orders
other than for investment plans received from authorized securities dealers by
the Distributor that day, provided that orders received after the close of the
New York Stock Exchange will receive the closing price only if such orders were
received by the securities dealers from the customers prior to such close.
Purchase orders received on other than a regular business day will be executed
on the next succeeding regular business day.
REDEMPTION - Trust sock certificates which are presented in proper form
to FPS Services, inc., 3200 Horizon Drive, P.O. Box 61503, King of Prussia, PA
19406-0903, will be redeemed for cash.
7
<PAGE>
Stock Certificates must be signed and stockholders signatures must be
guaranteed by a bank, a member of a national securities firm or by Investors
Security Co., Inc. Stockholders who wish to redeem shares that are held by the
Custodian, need only inform the Transfer Agent by letter. The redemption price
will be the next asset value determined as of the close of New York Stock
Exchange on the day of the tender for shares tendered prior to 4:00 P.M. New
York time and on any other day in which there is a sufficient degree of trading
in the investment company's portfolio securities that the current net asset
value of the investment company's redeemable securities might be materially
effected by changes in the value of the portfolio securities. Payment of the
redemption price must be made within seven (7) days from the date of tender. The
redemption price may be more or less than the original purchase price, depending
upon the net asset value of the shares determined in the manner set forth in
"Pricing and Sales of Shares".
If a shareholder uses the services of a broker-dealer, there may be a
charge to the shareholder for such services.
The funds will not suspend the right of redemption or postpone the date
of payment or satisfaction upon redemption of any redeemable security in
accordance with its terms for more than seven (7) days after the tender of such
security to the company or its agent for that purpose for the redemption except:
1. for any period (A) during which the New York Stock Exchange is
closed other than customary weekend and holiday closing or (B) during
which trading on the New York Stock Exchange is restricted;
2. for any period which an emergency exists as a result of which (A)
disposal by the company of securities owned by it is not reasonably
practicable for such company to determine fairly the value of its net
asset; or
3. for such other periods as the Commission may by order permit for the
protection of security holders of the company.
Trust certificates may be presented for redemption at the offices of
Trust's Management. Whenever sufficient cash funds are not available to redeem
presented certificates, a portion of the Trust's assets may be hypothecated as
security for a short-term loan in order to provide sufficient cash to fully
redeem presented stock certificates.
PRICING - In determining asset value, securities are valued at the last
sale price during the preceding trading period for securities traded on the New
York Stock Exchange or the American Stock Exchange. Where such a sale is
lacking, and in the case of all other securities not so traded, the mean of the
last bid price is taken. With respect to all assets on which no bid is
obtainable, value is determined in good faith by the Board of Directors. From
the total value of assets, which includes accrued dividends and interest, there
are deducted all actual and accrued liabilities. The amount of net assets
remaining is then divided by the number of shares outstanding to obtain the net
asset value per share. After applying the selling commission and adjusting any
fraction to the next higher cent, the result is the public offering price.
8
<PAGE>
The Trust reserves the right at any time to make computations of
offering prices at other times, or to suspend offerings entirely.
RIGHT OF ACCUMULATION
The graduated sales charges listed above may be applied to any
subsequent purchases of shares of the Fund when the investor has after any
purchase, an aggregate investment of $10,000.00 or more in shares of the Fund.
If, for example, the investor has previously purchased or acquired and still
holds Fund shares with a cost or current value at offering price of $90,000.00
on which he paid a charge of 4.00% of public offering price and subsequently
purchased $10,000.00 of additional Fund shared, the charge applicable to the
$10,000.00 purchase would be 3.5% of the public offering price. The investor
qualifies for the selling commission applicable on orders of $100,000.00 to
$250,000.00. The Trust must be promptly notified of each sale which entitles a
shareholder to a reduced sales charge.
LETTER OF INTENTION
Reduced sales charges are applicable to purchase aggregating
$100,000.00 or more of the shares of the Fund or any other investment company
with a sales charge for which the Distributor acts as the distributor made
within a thirteen- month period starting with the first purchase pursuant to a
Letter of Intention in the form provided in the Prospectus. The Letter of
Intention is available only to investors whose accounts are maintained at the
Fund's Transfer Agent. The Letter of Intention is not a binding obligation to
purchase any amount of shares, however, its execution will result in the
purchaser paying a lower sales charge at the appropriate quantity purchase
level. A purchase not originally made pursuant to a Letter of Intention may be
included under a subsequent Letter of Intention executed within 90 days of such
purchase if the Distributor is informed in writing of this intent within such 90
day period. The value of shares of the Fund and of other investment companies
with a sales charge for which the Distributor acts as the distributor presently
held, at cost or maximum offering price (whichever is higher), on the date of
the first purchase under the Letter of Intention, may be included as a credit
toward the completion of such Letter, but the reduced sales charge applicable to
the amount covered by such Letter, will be applied only to new purchases. If the
total amount of shares does not equal the amount stated in the Letter of
Intention (minimum of $100,000.00), the investor will be notified and must pay,
within 20 days of expiration of such Letter, the difference between the sales
charge on the shares purchased at the reduced rate and the sales charge
applicable to the shares actually purchased through the Letter. Shares equal to
five percent of the intended amount will be held in escrow during the thirteen
month period (while remaining registered in the name of the purchaser) for this
purpose. The first purchase under the Letter of Intention must be five percent
of the dollar amount of such letter. If during the term of such Letter, a
purchase brings the total amount invested to an amount equal to or in excess of
the amount indicated in the Letter, the purchaser will be entitled on that
purchase and subsequent purchases to the reduced percentage sales charge which
would be applicable to a single purchase equal to the total dollar value of the
shares then being purchased under such Letter, but there will be no retroactive
reduction of the sales charges on any previous purchase. The value of any shares
redeemed or otherwise disposed of by the purchaser prior to termination or
completion of the Letter of Intention will be deducted from the total purchases
made under such Letter.
9
<PAGE>
TAX STATUS
The Trust's Charter provides that dividends shall be paid from "net
income" on or about January 15, May 1, August 1, and November 1 of each year to
the Trust stockholders of record around the close of the 15th day of preceding
month. The amount of such dividends shall be set by the Board of Directors,
provided that they shall be so distributed in each year approximately the amount
of the "net income" received during the year. The dividend may be eligible for
the tax dividend exclusion. For the year August 31, 1997, 34.37% of the ordinary
income distribution qualified for the exclusion.
"Net Income" means the amount of "income" remaining after deductions of
management expenses, auditing and legal expenses, and taxes (if any). In
addition, the Trust may make distributions from any assets legally available,
exclusive of unrealized appreciation of assets.
Old Dominion Investors' Trust, Inc. has qualified as a regulated
investment company for the latest fiscal year and meets the diversification of
assets and source of income requirements (prescribed by the Internal Revenue
Code) and is accorded conduit or "pass through" treatment when at least 90% of
its taxable income exclusive of net long-term capital gains, is distributed to
shareholders. The Trust will be taxed only on the portion of such income which
it retains. In prior years, it has been the policy of the Trust to distribute to
shareholders 100% of all taxable income. It is the present intention of the
Trust to pay 100% of its taxable income to shareholders during the current year.
The terms "regulated investment company" does not involve supervision of
management or investment practices or policies.
Shareholders receiving a distribution of such income from the Trust
shall treat such dividend payments as ordinary income in computation of gross
income for tax purposes.
The Trust also follows the policy of distributing to the shareholders
100% of all net long-term capital gain over its short-term capital loss, it any,
except when the Trust has capital loss carryovers. The Tax Reform Act of 1976
permits a Capital loss carryover for a period of up to eight years. Such capital
gains distributed are not taxable to the Trust, but are taxable to the
shareholders as a long-term gain. It is the policy of the Trust not to
distribute Capital gains when there is a Capital loss carry forward.
Shareholders receive long-term gain regardless of the length of time the
shareholder has held the stock of the Trust. Advice as to tax status of each
year's dividend and distribution will be made annually and sent by mail to the
shareholders.
10
<PAGE>
UNDERWRITERS
Investors Security Co., Inc. is the principal underwriter of the Fund.
<TABLE>
<CAPTION>
Net
Name of Underwriting Compensation
Principal Discounts and on Redemption Brokerage Other
Underwriter Commissions and Repurchases Commissions Compensations
<S> <C>
Investors $28,313.00 - 0- $93,861.00 - 0 -
Security Co.
Inc.
</TABLE>
FINANCIAL STATEMENTS
The statements required in this section are included in Part C of the
Registration Statement.
11
<PAGE>
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<INSERT PART C>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(2) of the Securities
and Exchange Act of 1934, the undersigned registrant hereby undertakes to file
with the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission, heretofore or hereafter duly adopted pursuant
to authority conferred in that section.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1993 (and)
(or) the Investment Company Act of 1940, the Registrant (certifies that it
meets all of the requirements for effectiveness of this Registrant Statement
pursuant to rule 465(b) under the Securities Act of 1933 and) has duly caused
this Registration Statement to be signed on its behalf by the State of Virginia
on the 9th day of December 1997.
OLD DOMINION INVESTORS TRUST, INC.
/s/ James F. Hope
-------------------------
James F. Hope, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
/s/ James F. Hope December 9, 1997
- ------------------------------------ ---------------------------
James F. Hope, President, Director Date
/s/ Frank M. Rawls December 9, 1997
- ------------------------------------ ---------------------------
Frank M. Rawls, Asst. Sec/Dir Date
/s/ James F. Briggs, Jr. December 9, 1997
- ------------------------------------ ---------------------------
James F. Briggs, Jr., Director Date
/s/ E. Grier Ferguson December 9, 1997
- ------------------------------------ ---------------------------
E. Grier Ferguson, Director Date
- ------------------------------------ ---------------------------
William B. Ballard, Vice Pres., Dir. Date
/s/ Peter D. Pruden, III December 9, 1997
- ------------------------------------ ---------------------------
Peter D. Pruden, III, Director Date
/s/ Cabell Birdsong December 9, 1997
- ------------------------------------ ---------------------------
Cabell B. Birdsong, Sec/Treas/Dir Date
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated September 17, 1997 accompanying the August 31,
1997 financial statements of Old Dominion Investors' Trust, Inc. which are
included in Part C of the Post-Effective Amendment to this Registration
Statement and Prospectus. We consent to the use of the aforementioned report
in the Registration Statement and Prospectus.
/s/ Briggs, Bunting & Dougherty, LLP
-------------------------------------
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
December 23, 1997
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm in the Registration Statement, (Form
N-1A), and related Statement of Additional Information of Old Dominion
Investors Trust, Inc. and to the reference to our report dated September 26,
1996 to the Shareholders and Board of Directors of Old Dominion Investors
Trust, Inc.
/s/ Tait, Weller & Baker
--------------------------
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
December 29, 1997
<PAGE>
[KAUFMAN & CANOLES LETTERHEAD]
KAUFMAN & CANOLES
A PROFESSIONAL CORPORATION
ATTORNEYS AND COUNSELORS AT LAW
ONE COMMERCIAL PLACE
POST OFFICE BOX 3037
NORFOLK, VIRGINIA 23514
(757) 624-3000
FAX (757) 624-3169
December 30, 1997
Board of Directors
The Old Dominion Investors Trust, Inc.
110 Bank Street
Suffolk, Virginia 23434
Registration Statement
File No. 2-9662
Gentlemen:
The Old Dominion Investors Trust, Incorporated (the "Trust") has
registered certain shares of Common Stock with the Securities
and Exchange Commission under the above-referenced Registration
Statement. This Registration Statement involves the continuing
sale of Common Stock by filing post-effective amendments to keep
said statement current.
We have acted as special counsel for the Trust and in this
connection have reviewed (a) the Registration Statement, (b) the
Trust's Articles of Incorporation, as amended, and Bylaws, as
amended, (c) certain records of the Trust's corporate proceedings
as reflected in its minute and stock books and (d) a
certificate of the Trust's investment adviser. In our
examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals
and the conformity with the original of all documents submitted
to us as copies thereof.
During the fiscal year ended August 31, 1997, 63,157 shares of
Common Stock were issued and sold, and 47,215 shares were
redeemed thereby resulting in a net increase of 15,942
outstanding shares. As of the end of the most recent fiscal
year, there remains a total of 146,500 shares of Common Stock
authorized and available for sale by post-effective amendment.
Based upon the foregoing, it is our opinion that the 63,157
shares of Common Stock issued and sold during the last fiscal
year ended August 31, 1997 under the above-referenced
Registration Statement, are legally issued, fully paid and
nonassessable shares of Common Stock of the Trust.
We hereby consent to the filing of this opinion and the use of
our name in the post-effective amendment to the subject
Registration Statement.
Very truly yours,
/s/ Kaufman & Canoles
---------------------
KAUFMAN & CANOLES
