SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
--------
Post-Effective Amendment No 16 /X/
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 17 /X/
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PC&J PRESERVATION FUND - FILE NOS. 2-95285 AND 811-4204
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(Exact Name of Registrant as Specified in Charter)
300 OLD POST OFFICE, 120 WEST THIRD STREET, DAYTON, OHIO 45402
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 937/223-0600
JAMES M. JOHNSON, 300 OLD POST OFFICE, 120 WEST THIRD STREET,
DAYTON, OHIO 45402
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(Name and Address of Agent for Service)
Copy to: Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A., 3500 Carew
Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
</R
/ / 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.
<PAGE>
PROSPECTUS
April , 1999
PC&J PRESERVATION FUND
A No-Load Fund
300 Old Post Office
120 West Third Street
Dayton, Ohio 45402
Investment Adviser: Parker Carlson & Johnson, Inc.
INVESTMENT OBJECTIVE
The investment objective of PC&J Preservation Fund is preservation of capital
through investment in fixed-income obligations.
IMPORTANT FEATURES
Investment for Preservation of Capital
No Sales Commissions or Withdrawal Charges
Professional Management
Diversification
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.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
RISK/RETURN SUMMARY OF THE FUND .............................. 3
FEE TABLE .................................................... 5
FINANCIAL HIGHLIGHTS ......................................... 6
INVESTMENT OBJECTIVE, POLICIES AND RISKS ..................... 7
ORGANIZATION AND OPERATION OF THE FUND ....................... 8
DISTRIBUTION EXPENSE PLAN .................................... 8
DESCRIPTION OF SHARES AND TAXES .............................. 9
HOW TO INVEST IN THE FUND .................................... 9
HOW TO REDEEM YOUR INVESTMENT ............................... 10
DETERMINATION OF SHARE PRICE ................................. 11
NEW ACCOUNT APPLICATION ...................................... 13
</TABLE>
<PAGE>
RISK/RETURN SUMMARY OF THE FUND
The PC&J Preservation Fund is designed for long-term investors who seek income
and preservation of capital through investment in fixed-income obligations.
1. WHAT IS THE INVESTMENT OBJECTIVE OF THE FUND? The Fund seeks the generation
of income and the preservation of capital through investment in fixed-income
obligations.
2. WHAT IS THE MAIN INVESTMENT STRATEGY OF THE FUND? The investment manager
maintains a diversified portfolio comprised of the following securities:
. investment grade corporate obligations;
. investment grade taxable municipal obligations;
. obligations of the U.S. government or any of its agencies;
. obligations (including certificates of deposit and bankers'
acceptances) of major U.S. banks;
. prime commercial paper;
. mortgage-related securities;
. such other securities as the Board of Trustees of the Fund believes are
of comparable quality with those mentioned above.
The Fund expects to keep the dollar-weighted average maturity of its
portfolio securities to less than ten years, although some individual
securities may have maturities greater than ten years.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND? Although the Fund intends
to diversify its investments, the value of the Fund's portfolio will change
in response to interest rate fluctuations. An increase in market interest
rates will generally reduce the value of the Fund's investments and a
decline in market interest rates will generally increase the value of the
Fund's investments. Further, while the Fund's portfolio securities are
investment grade, fixed-income obligations, they are subject to the ability
of the issuer to make payment of principal and interest when due. To the
extent the Fund invests in lower-grade bonds, which have some speculative
characteristics and may have a weakened capacity to pay principal and
interest in adverse economic conditions, the Fund will be subject to higher
volatility. However, the Adviser would only invest up to 10% of its net
assets in such bonds.
The following information illustrates how the Fund's performance has varied
over time. The bar chart depicts the change in performance from year-to-year
during the period indicated. The tables compare the Fund's average annual
returns for the periods indicated to a broad-based securities market index. Of
course, past performance cannot predict or guarantee future results.
THE PC&J PRESERVATION FUND
A BAR CHART showing Annual Total Returns for the Fund from 1989 through 1998:
<TABLE>
<CAPTION>
Preservation
Fund
<S> <C>
1989 11.3%
1990 9.3%
1991 12.5%
1992 6.2%
1993 8.5%
1994 -2.4%
1995 15.2%
1996 2.8%
1997 7.4%
1998 8.3%
</TABLE>
A bar of proportionate size represents each percentage with the actual total
return printed above the bar.
Best Quarter: 6.0% for the quarter ended 6/30/89
Worst Quarter: -2.1% for the quarter ended 3/31/94
<TABLE>
<CAPTION>
Average annual total return
for periods ended 12/31/98
1 Year 5 Years 10 Years
<S> <C> <C> <C>
The Fund 8.3% 6.1% 7.8%
Lehman Composite <F1> 10.1% 7.2% 9.3%
<FN>
<F1> The Lehman Composite is a widely recognized, unmanaged, broad-based index
containing only investment grade fixed income securities traded in the United
States.
</FN>
</TABLE>
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<S> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 0%
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering
price) 0%
Deferred Sales Load (as a percentage
of original purchase price or redemption
proceeds, as applicable) 0%
Redemption Fees (as a percentage of
amount redeemed, if applicable) 0%
Exchange Fee 0%
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<S> <C>
Management Fees 0.50%
12b-1 Fees 0%
Other Expenses 0.50%
Total Fund Operating Expenses 1.00%
</TABLE>
The following Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. Actual expenses
may be greater or less than those shown.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
You would pay the
following expenses on
a $10,000 investment,
assuming (1) 5% annual
return and (2) redemption
at the end of each time
period: $103 $323 $566 $1,289
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
The information contained in the table below is for the years ended December
31, 1998, 1997, 1996, 1995, and 1994. Such information has been derived from
data contained in financial statements audited by Deloitte & Touche, LLP,
independent auditors. Such information should be read in conjunction with the
financial statements incorporated by reference in the Fund's Statement of
Additional Information. The Fund's Annual Report contains additional
performance information and will be made available upon request and without
charge.
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<TABLE>
<CAPTION>
Selected Data for Each Share For The Years Ended December 31,
of Capital Stock Outstanding
Throughout the Year 1998 1997 1996 1995 1994
-------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE-BEGINNING OF YEAR $11.14 $10.97 $11.32 $10.34 $11.31
------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.57 0.64 0.62 0.59 0.70
Net realized and unrealized
gain (loss) on securities 0.36 0.17 (0.31) 0.98 (0.97)
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 0.93 0.81 0.31 1.57 (0.27)
------- ------- ------- ------- -------
Less dividends:
From net investment income (0.57) (0.64) (0.62) (0.59) (0.70)
From net realized gain
on investments (0.13) (0.00) (0.04) (0.00) (0.00)
------- ------- ------- ------- -------
TOTAL DIVIDENDS (0.70) (0.64) (0.66) (0.59) (0.70)
------- ------- ------- ------- -------
NET ASSET VALUE-END OF YEAR $11.37 $11.14 $10.97 $11.32 $10.34
======= ======= ======= ======= =======
TOTAL RETURN 8.35% 7.38% 2.75% 15.18% (2.39%)
RATIOS TO AVERAGE NET ASSETS
Expenses 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income 5.25% 5.62% 5.38% 5.56% 5.83%
Portfolio turnover rate 44.50% 31.39% 28.66% 25.62% 30.03%
Net assets at end of year (000's) $19,852 $16,071 $16,151 $16,472 $14,261
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The investment objective of the Fund is preservation of capital through
investment in fixed-income obligations. This investment objective may be
changed without the affirmative vote of a majority of the outstanding voting
securities of the Fund.
The Fund follows specific guidelines in buying portfolio securities. Bankers'
acceptances and certificates of deposit will only be purchased from major U.S.
banks which at the date of investment have capital, surplus and undivided
profits (as of the date of their most recently published annual financial
statements) of $100,000,000 or more. Corporate obligations generally must be
investment grade (rated BBB or higher by S&P, or Baa or higher by Moody's, or
if unrated, determined by the Adviser to be of comparable quality). Taxable
municipal obligations are debt instruments issued by municipal entities where
the interest is subject to income tax. To the extent the Fund invests in
taxable municipal obligations, the same credit standards as used in selecting
corporate obligations will be applied. For an explanation of the foregoing
ratings by S&P and Moody's, see the Appendix to this Prospectus.
The Fund may also purchase mortgage-related securities, which represent
interests in a pool of mortgages. These securities provide investors with
payments consisting of both interest and principal as the mortgages in the
underlying mortgage pools are repaid. The average life of securities
representing interests in pools of mortgage loans is likely to be
substantially less than the original maturity of the mortgage pools as a
result of prepayments or foreclosures of such mortgages. To the extent the
mortgages underlying a security representing an interest in a pool of
mortgages are prepaid, the Fund will experience a loss if the security was
acquired by the Fund at a premium. Prepayments may occur with greater
frequency in periods of declining mortgage rates because, among other reasons,
it may be possible for mortgagors to refinance their outstanding mortgages at
lower interest rates. In such periods, it is likely that any prepayment
proceeds would be reinvested by the Fund at lower rates of return.
The Fund may also invest in collateralized mortgage obligations ("CMOs").
CMOs are securities collateralized by mortgages or mortgage-related
securities. CMOs are issued with a variety of classes or series, which have
different maturities and are often retired in sequence. CMOs may be issued by
governmental or non-governmental entities such as banks and other mortgage
lenders. Non-government securities may offer a higher yield but also may be
subject to greater price fluctuation than government securities. Investments
in CMOs are subject to the same risks as direct investments in the underlying
mortgage and mortgage-related securities. In addition, in the event of a
bankruptcy or other default of an entity that issued a CMO held by the Fund,
the Fund could experience both delays in liquidating its position and losses.
There can be no assurance that the Fund's investment objective will be
obtained.
Like most mutual funds, the Fund relies on computers in conducting daily
business and processing information. There is a concern that on January 1,
2000 some computer programs will be unable to recognize the new year and as a
consequence, computer malfunctions will occur. The Fund and its Adviser have
taken steps that it believes are reasonably designed to address this potential
problem and to obtain satisfactory assurance from other service providers to
the Fund that they are also taking steps to address the issue. There can,
however, be no assurance that these steps will be sufficient to avoid any
adverse impact on the Fund or shareholders. The Year 2000 concern my also
adversely impact issuers of obligations held in the Fund's portfolio.
TEMPORARY DEFENSIVE PURPOSES
The Fund may invest all or a portion of its assets for temporary defensive
purposes, in U.S. Treasury bills or other short-term interest bearing
securities and in bank interest bearing checking accounts, including interest
bearing checking accounts of the Custodian. Under normal circumstances, such
short-term investments are expected to represent only a nominal portion of the
Fund's total assets. Further, although the Fund is authorized to invest up to
5% of its total assets in repurchase agreements, restricted securities and
securities of other investment companies, and borrow as a temporary measure
for extraordinary or emergency purposes up to 5% of total assets and to secure
such borrowing by pledge of Fund assets up to such amount, the Fund's
Investment Adviser and Trustees presently do not expect to engage in such
activity. To the extent that the Fund takes such temporary defensive measures,
there can be no assurance that the Fund's investment objective will be
obtained.
ORGANIZATION AND OPERATION OF THE FUND
The Fund has entered into an Investment Advisory Agreement ("Investment
Advisory Agreement") with Parker Carlson & Johnson, Inc., 300 Old Post Office,
120 West Third Street, Dayton, Ohio (the "Adviser") in which the Adviser has
agreed to provide the Fund with continuous investment advice, including
management of the Fund's portfolio securities. The Adviser was organized in
1982 and has been the only investment adviser of the Fund. Kathleen Carlson
is primarily responsible for the day to day management of the Fund's portfolio
and has been since the Fund's inception (April 30, 1985). Ms. Carlson has
been Treasurer of the Adviser since September, 1982 and Treasurer and a
Trustee of the Trust since its inception.
The Adviser is also the investment adviser to PC&J Performance Fund and to
various individual, business and pension fund clients and is registered under
the Investment Advisers Act of 1940. All officers of the Adviser are members
of the Financial Analysts Federation, and Mr. Johnson and Mrs. Carlson are
Chartered Financial Analysts.
As compensation for the investment advice, the Fund will pay the Adviser a
monthly fee, accrued daily, based on an annual rate of .5% of the daily net
asset value of the Fund.
Performance Information for the Fund is contained in the Fund's annual report,
which will be made available upon request and without charge.
DISTRIBUTION EXPENSE PLAN
The Fund has adopted a plan under rule 12b-1 that permits the Trustees to
authorize the Fund to pay distribution expenses for the sale and distribution
of its shares. Currently, the Trustees have not authorized the Fund to pay
any distribution-related expenses.
DESCRIPTION OF SHARES AND TAXES
Ownership records of shares are maintained by the Fund's transfer agent,
Service Corp., which confirms purchase and sale of shares and dividend and
capital gain distributions. Certificates representing shares will not be
issued.
The Fund will distribute to its shareholders an annual dividend that will
consist of the Fund's net income and net realized capital gains. The dividend
will be paid only in additional shares and not in cash. For federal income
tax purposes, the portion of the dividend that consists of net income and net
short-term capital gains is taxable to shareholders as ordinary income. The
portion of the dividend that consists of net long-term capital gains is
taxable to shareholders at long-term capital gain rates. It is important for
shareholders to remember that the tax consequences described in this section
apply to dividends even though they are paid in additional shares and not in
cash.
The Fund will mail a Form 1099 annually to shareholders which will include the
total dividend paid, the amount of the dividend subject to federal income
taxes as ordinary income and the amount of the dividend subject to long-term
capital gain tax rates. Dividend distributions may be subject to state and
local taxes. Shareholders are urged to consult their own tax advisers
regarding specific questions about federal, state or local taxes they may be
required to pay on their dividends.
Shareholders should direct all inquiries concerning the purchase or sale of
shares to the Fund. All other questions should be directed to Service Corp. at
120 W. Third St., Suite 300, Dayton, Ohio 45402 or by telephoning Service
Corp. at 937-223-0600.
HOW TO INVEST IN THE FUND
You may purchase shares of the Fund on any business day the New York Stock
Exchange is open. The minimum initial investment is $1,000 ($2,000 for tax
deferred retirement plans). There is no required minimum subsequent
investment. The purchase price for shares will be the net asset value per
share next determined after the order is received. (See "Determination of
Share Price".) There is no sales charge or commission.
The Fund reserves the right to refuse to sell to any person. If a purchaser's
check is returned to the Custodian as uncollectible, the purchase order is
subject to cancellation and the purchaser will be responsible for any loss
incurred by the Fund.
INITIAL INVESTMENT BY MAIL
You may purchase shares of the Fund by mail, in at least the minimum amount,
by submitting a check payable to the order of "PC&J Preservation Fund" and a
completed and signed new account application, which accompanies this
Prospectus (page 13), to the Custodian at the following address:
PC&J - Lockbox Account
Location 0614
Cincinnati, Ohio 45264-0614
The Fund confirms with the Custodian, on a daily basis by telephone, that the
Custodian has received the properly completed new account application and the
accompanying check.
INITIAL INVESTMENTS BY WIRE
You may purchase shares of the Fund by wire, in at least the minimum amount,
by:
. first completing and signing the new account application;
. telephoning (937-223-0600) the information contained in the new account
application to the Fund;
. mailing the completed and signed new account application to the
Custodian at the address set forth in the preceding paragraph;
. instructing your bank to wire Federal Funds to the Custodian. (Your
bank may charge you a fee for sending such wire.)
EFFECTIVE DATE OF PURCHASE
Your initial purchase of the Fund's shares will be effective on the date that
the Fund confirms with the Custodian that the Custodian has received the
properly completed new account application and the accompanying check or wire
transfer. The Fund's transfer agent, Service Corp., will mail you confirmation
of your initial investment.
SUBSEQUENT INVESTMENTS
You may purchase additional shares of the Fund by:
. first providing the Fund, by mail or by telephone, the necessary
information concerning the name of your account and its number;
. subsequently making the necessary payment, either by check or wire
transfer, to the Custodian.
Your purchase of additional shares of the Fund will be effective on the date
that the Fund confirms with the Custodian that the Custodian has received the
check or wire transfer. Service Corp. will mail you a confirmation of each
subsequent investment.
HOW TO REDEEM YOUR INVESTMENT
You may sell shares of the Fund without charge at the net asset value next
determined after the Fund receives your properly completed written request for
redemption. The Fund will pay you for the shares you sell within 7 days of
receiving your redemption request. However, the Fund will pay for redemptions
of shares originally purchased by check will be effected only after the check
has been collected, which normally occurs within fifteen days. The Fund
further reserves the right to delay payment for the redemption of shares until
such time as the Fund has received the properly completed new account
application with respect to such shares.
You may sell shares of the Fund on each day that the Fund is open for business
by sending a written redemption request to the Fund. The written request must
be signed by each shareholder, including each joint owner, exactly as the name
appears on the Fund's account records. The redemption request must state the
number or dollar amount of shares to be redeemed and your account number. For
the protection of shareholders, additional documentation may be required from
individuals, corporations, partnerships, executors, trustees and other
fiduciaries.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to redeem all shares of any account on
sixty days' written notice if the net asset value of the account, due to a
redemption, is less than $5,000 ($1,000 for tax deferred retirement plans), or
such other minimum amount as the Fund may determine from time to time. A
shareholder may increase the value of his shares to the minimum amount within
the sixty-day period. Each share of the Fund is subject to redemption at any
time if the Board of Trustees determines in its sole discretion that failure
to so redeem may have materially adverse consequences to all or any of the
shareholders of the Fund. It is anticipated that the redemption provisions of
the preceding sentence would be used only to preserve the tax status of the
Fund or to close the Fund.
The Fund may suspend the right of redemption or may delay payment as follows:
. during any period the New York Stock Exchange is closed other than for
customary weekend and holiday closings;
. when trading on the New York Stock Exchange is restricted, or an
emergency exists (as determined by the rules and regulations of the
Securities and Exchange Commission) so that disposal of the securities
held in the Fund or determination of the net asset value of the Fund is
not reasonably practicable;
. for such other periods as the Securities and Exchange Commission by
order may permit for the protection of the Fund's shareholders.
DETERMINATION OF SHARE PRICE
On each day that the Fund is open for business, the net asset value of the
shares is determined as of 4:30 P.M., Dayton, Ohio time. The Fund is open for
business on each day the New York Stock Exchange is open for business and on
any other day when there is sufficient trading in the Fund's portfolio
securities that the Fund's net asset value might be materially affected. The
net asset value per share is computed by dividing the sum of the value of the
securities held by the Fund plus any cash or other assets (including interest
and dividends accrued but not yet received) minus all liabilities (including
estimated accrued expenses) by the total number of shares then outstanding.
Fixed income securities are generally valued by using market quotations, but
may be valued on the basis of prices calculated using a matrix methodology
when the Advisor believes such prices accurately reflect the fair market value
of such securities. The matrix pricing methodology utilizes yield spreads
relating to securities with similar characteristics to determine prices for
normal institutional-size trading units of debt securities without regard to
sale or bid prices. When prices cannot be readily estimated using the matrix
methodology, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the
Adviser, subject to review of the Board of Trustees. Short term investments
in fixed income securities with maturities of less than 60 days when acquired,
or which subsequently are within 60 days of maturity, are valued by using the
amortized cost method of valuation, which the Board has determined will
represent fair value. The share price of the Fund will fluctuate with the
value of its portfolio securities.
<PAGE>
PRESERVATION FUND
ACCOUNT APPLICATION
INSTRUCTIONS: Complete Sections 1 through 4 where applicable. Please print or
type. This application should be completed, signed and mailed to PC&J Lockbox
Account, Cincinnati. If payment is by check or other negotiable instrument
such check or other negotiable instrument payable to PC&J Preservation Fund
should accompany the New Account Application. Refer to the Prospectus for more
detailed information.
MAIL TO: PC&J - Lockbox Account
Location 0614
Cincinnati, Ohio 45264-0614
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1. REGISTRATION (Complete one section only)
___________________________________ _______________
INDIVIDUALS First Name Initial Last Name Social Security
AND Number
JOINT TENANTS
_______________________________________________________
Joint Owner (A Joint Tenancy with right of survivorship
will be presumed, unless otherwise indicated)
___________________________________ _______________
GIFTS Custodian's Name (only one) Minor's state
TO of residence
MINORS
___________________________________ ________________
Minor's Name (Only one) Minor's Social
Security Number
___________________________________ _______________
TRUSTS Trust or Plan Name Tax Identifi-
AND QUALIFIED cation Number
RETIREMENT PLANS
___________________________________
Name of Trustee(s)
___________________________________ _______________
ORGANIZATIONS Name of Organization Tax Identifi-
cation Number
Type: ___Corporation ___Partnership ___Association
<PAGE>
2. MAILING ADDRESS
___________________________________ ________________
Street Telephone Number
___________________________________ ________________
City State Zip Code
___________________________________
Attention (if any)
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3. INITIAL INVESTMENT (Complete one only)
A. I am mailing $___________ by check or other negotiable instrument
Amount
B. I have arranged $___________ for wire transfer
Amount
to PC&J Lockbox Account, Cincinnati at the address set forth above for
the purchase of shares of PC&J Performance Fund. The minimum initial
purchase is $1,000 ($2,000 for tax deferred retirement plans).
- ------------------------------------------------------------------------------
4. SIGNATURES
I have received and reviewed a copy of the Fund's Prospectus dated April
, 1999 and understand that (a) certificates with respect to shares of
the Fund will not be issued, and (b) dividends and capital gain
distributions will be made only in additional shares of the Fund and not
in cash.
_____________ __________________________________________________
Date Signature (Individual, Custodian, Trustee or Other)
_____________ __________________________________________________
Date Signature of Joint Owner (if any)
- ------------------------------------------------------------------------------
<PAGE>
FOR MORE INFORMATION
Shareholder inquiries regarding the Fund can be made to:
PC&J Preservation Fund
120 West Third St.
Suite 300
Dayton, Ohio 45402
Telephone: 1-937-223-0600
Several additional sources of information are available to you. The Fund's
STATEMENT OF ADDITIONAL INFORMATION (SAI), incorporated by reference into this
prospectus, contains detailed information on Fund policies and operation.
Shareholder reports contain management's discussion of market conditions,
investment strategies and performance results as of the Fund's latest semi-
annual or annual fiscal year end.
Call the Fund at 937-223-0600 to request free copies of the SAI and the Fund's
annual and semi-annual reports or to request other information about the Fund.
You may also obtain information about the Fund (including the SAI and other
reports) from the Securities and Exchange Commission on their Internet site at
HTTP://WWW.SEC.GOV or at their Public Reference Room in Washington, D.C. Call
the SEC at 800-SEC-0330 for room hours and operation. You may also obtain
Fund information by sending a written request and duplicating fee the Public
Reference Section of the SEC, Washington, D.C. 20549-6609.
Investment Company Act # 2-95825
STATEMENT OF ADDITIONAL INFORMATION
APRIL , 1999
PC&J PRESERVATION FUND
A No-Load Fund
300 Old Post Office
120 West Third Street
Dayton, Ohio 45402
Investment Adviser: Parker Carlson & Johnson, Inc.
(the "Adviser")
INVESTMENT OBJECTIVE
The investment objective of PC&J Preservation Fund (the "Fund") is
preservation of capital through investment in fixed-income obligations.
IMPORTANT FEATURES
Investment for Preservation of Capital
No Sales Commissions or Withdrawal Charges
Professional Management
Diversification
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus of the Fund dated April , 1999 (the
"Prospectus"). This Statement of Additional Information incorporates by
reference the Trust's Annual Report to Shareholders for the fiscal year ended
December 31, 1998. The Prospectus and Annual Report are available upon
request and without charge by calling the Fund at 937-223-0600. This Statement
of Additional Information is incorporated by reference in its entirety into
the Prospectus.
TABLE OF CONTENTS
PAGE
INVESTMENT OBJECTIVE AND POLICIES ...................................1
Fundamental ....................................................1
Non-Fundamental ................................................2
State Restrictions .............................................4
ORGANIZATION AND OPERATION OF THE FUND ..............................5
Principal Holders of Equity Securities .........................6
Investment Adviser .............................................7
Manager and Transfer Agent .....................................7
Custodian ......................................................8
Auditors .......................................................8
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION .....................8
DESCRIPTION OF SHARES AND TAXES .....................................9
FINANCIAL STATEMENTS ................................................9
FINANCIAL RATINGS ...................................................9
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
FUNDAMENTAL
The investment limitations described below have been adopted by the Fund and
are fundamental ("Fundamental"), I.E., they may not be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. As used
in the Prospectus and this Statement of Additional Information, the term
"majority" of the outstanding shares of the Fund means the lesser of (1) 67%
or more of the outstanding shares of the Fund present at a meeting, if the
holders of more than 50% of the outstanding shares of the Fund are present or
represented at such meeting; or (2) more than 50% of the outstanding shares of
the Fund. Other investment practices which may be changed by the Board of
Trustees without the approval of shareholders to the extent permitted by
applicable law, regulation or regulatory policy are considered non-fundamental
("Non-Fundamental").
1. BORROWING MONEY. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset
coverage of 300% for all borrowings of the Fund; or (b) from a bank or other
persons for temporary purposes only, provided that such temporary borrowings
are in an amount not exceeding 5% of the Fund's total assets at the time when
the borrowing is made. This limitation does not preclude the Fund from
entering into reverse repurchase transactions, provided that the Fund has an
asset coverage of 300% for all borrowings and repurchase commitments of the
Fund pursuant to reverse repurchase transactions.
2. SENIOR SECURITIES. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder, or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and the
Statement of Additional Information.
3. UNDERWRITING. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent
that, in connection with the disposition of portfolio securities (including
restricted securities), the Fund may be deemed an underwriter under certain
federal securities laws.
4. REAL ESTATE. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in securities which are secured by
or represent interests in real estate. This limitation does not preclude the
Fund from investing in mortgage-related securities, or investing in companies
which are engaged in the real estate business or have a significant portion of
their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. LOANS. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. CONCENTRATION. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Fund as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless
the excess results immediately and directly from the acquisition of any
security or the action taken. It is the current position of the SEC staff
that the provisions of this paragraph do not apply to a fund's borrowing
policy (paragraph 1 above). As long as the SEC staff maintains that position,
the Fund will not apply the provisions to its borrowing policy.
Notwithstanding the concentration limitation in paragraph 7, any
investment company, whether organized as a trust, association or corporation,
or a personal holding company, may be merged or consolidated with or acquired
by the Fund, provided that if such merger, consolidation or acquisition
results in any concentration prohibited by said paragraph 7, the Fund shall,
within ninety days after the consummation of such merger, consolidation or
acquisition, dispose of all of the securities of such issuer so acquired or
such portion thereof as shall bring the total investment therein within the
limitation imposed by said paragraph 7 above as of the date of consummation.
NON-FUNDAMENTAL
The following limitations have been adopted by the Fund and are Non-
Fundamental.
1. PLEDGING. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except
as may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a
mortgage, pledge or hypothecation of assets for purposes of this limitation.
2. MARGIN PURCHASES. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable
to short term credit obtained by the Fund for the clearance of purchases and
sales or redemption of securities, or to arrangements with respect to
transactions involving options, futures contracts, short sales and other
permitted investments and techniques.
3. OPTIONS. The Fund will not purchase or sell puts, calls, options or
straddles except as described in the Prospectus and the Statement of
Additional Information.
4. SHORT SALES. The Fund will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
5. ILLIQUID INVESTMENTS. The Fund will not invest more than 15% of its
net assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
6. SECURITIES AFFILIATED WITH TRUSTEES. The Fund will not invest in
securities of a company that is affiliated with a Trustee by reason of
employment or by representation of the Trustee on the company's Board of
Directors.
DIVERSIFICATION
As a diversified company, at least 75% of the Fund's total assets must be
invested in (a) securities limited in respect of any one issuer to an amount
not greater than 5% of the value of the total assets of the Fund and not
greater than 10% of the outstanding voting securities of such issuer, (b) cash
and cash items, (c) government securities, and (d) securities of other
investment companies.
The Fund expects to keep the dollar-weighted average maturity of its portfolio
securities to less than ten years, although some individual securities may
have maturities greater than ten years. For example, if twenty-five percent
of the value of the Fund's portfolio securities mature in one year, two years,
three years and four years, respectively, the dollar-weighted average maturity
of the portfolio would be two and one-half years. The Fund will keep the
dollar-weighted average maturity relatively short when the Adviser expects
interest rates to rise and relatively long when the Adviser expects interest
rates to decline. Dollar-weighted average maturity for these purposes means
the dollar-weighted average of the face maturities of the portfolio
securities, which may differ from their dollar-weighted average life.
Commercial paper must either be rated A-1, A-1+ or A-2 by Standard & Poor's
Corporation ("S&P"), or Prime-1 or Prime-2 by Moody's Investors Service, Inc.
("Moody's"), or if unrated, it must be issued by companies which have a debt
issue rated AAA, AA or A by SP, or Aaa, Aa, or A by Moody's.
STATE RESTRICTIONS
To comply with the current blue sky regulations of the State of Ohio, the
Fund presently intends to observe the following restrictions, which may be
changed by the Board of Trustees without shareholder approval.
The Fund will not purchase or retain securities of any issuer if the
Trustees and officers of the Fund or of the Adviser, who individually own
beneficially more than 0.5% of the outstanding securities of such issuer,
together own beneficially more than 5% of such securities. The Fund will not
purchase securities issued by other investment companies except by purchase in
the open market where no commission or profit to a sponsor or dealer results
from such purchase other than customary broker's commission or except when
such purchase is part of a plan of merger, consolidation, reorganization or
acquisition. The Fund will not borrow (other than by entering into reverse
repurchase agreements), pledge, mortgage or hypothecate more than one-third
of its total assets. In addition, the Fund will engage in borrowing (other
than reverse repurchase agreements) only for emergency or extraordinary
purposes and not for leverage. The Fund will not invest more than 15% of its
total assets in securities of issuers which, together with any predecessors,
have a record of less than three years continuous operation or securities of
issuers which are restricted as to disposition. The Fund will not purchase
the securities of any issuer if such purchase at the time thereof would cause
more than 10% of the voting securities of any issuer to be held by the Fund.
ORGANIZATION AND OPERATION OF THE FUND
The Fund is a diversified, open-end management investment company organized as
an Ohio business trust on January 2, 1985. The responsibility for management
of the Fund is vested in its Board of Trustees which, among other things, is
empowered by the Fund's Declaration of Trust to elect officers of the Fund and
contract with and provide for the compensation of agents, consultants and
other professionals to assist and advise in such management.
The names of the executive officers and Trustees of the Fund are shown in the
table below. Each Trustee who is an "interested person" of the Fund, as
defined in the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
Position Held Principal Occupation(s)
NAME, ADDRESS AND AGE WITH FUND DURING PAST FIVE YEARS
<S> <C> <C>
*Leslie O. Parker III<F1> President and Since September, 1982,
300 Old Post Office Trustee President of Adviser
120 West Third Street
Dayton, Ohio 45402
Age: 59
*Kathleen A. Carlson, CFA<F1> Treasurer and Since September, 1982,
300 Old Post Office Trustee Treasurer of Adviser
120 West Third Street
Dayton, Ohio 45402
Age: 43
*James M. Johnson, CFA<F1> Secretary and Since September, 1982,
300 Old Post Office Trustee Secretary of Adviser
120 West Third Street
Dayton, Ohio 45402
Age: 46
Donald N. Lorenz Trustee Retired since December 1998;
210 B Mariners Point from December 1980 to
73 Skull Creek Drive December 1998, Vice
Hilton Head Island, S.C. 29926 President-Finance and
Age:64 Treasurer, Price Brothers
Company (concrete pipe
products)
Thomas H. Rodgers Trustee Since July, 1986, Vice
World Headquarters Blvd. President-General Counsel
Troy, Ohio 45373 and Secretary, Premark
Age: 54 International, Inc. Food
Equipment Group
<FN>
<F1>The Fund's President, Treasurer and Secretary are the President, Treasurer
and Secretary, respectively, of Adviser and own in the aggregate a controlling
interest in Adviser.
</FN>
</TABLE>
Each of the foregoing Trustees also is a Trustee of PC&J Performance Fund.
As of February 12, 1999, all Trustees and officers of the Fund as a group
owned less than 1% of the outstanding shares of the Fund.
The compensation paid to the Trustees of the Fund for the year ended December
31, 1998 is set forth in the following table:
<TABLE>
<CAPTION>
PENSION OR ESTIMATED TOTAL
RETIREMENT ANNUAL COMPENSA-
ACCRUED AS BENEFITS TION FROM
COMPENSA- PART OF UPON FUND COMPLEX
TION FROM FUND RETIRE-
NAME FUND EXPENSES MENT
<S> <C> <C> <C> <C>
Leslie O. Parker, III $0 $0 $0 $0
Kathleen A. Carlson $0 $0 $0 $0
James M. Johnson $0 $0 $0 $0
Donald N. Lorenz $450 $0 $0 $900
Thomas H. Rodgers $450 $0 $0 $900
</TABLE>
The Fund and PC&J Performance Fund are the two investment companies in the
PC&J Mutual Funds complex. They have identical Boards of Trustees, and Board
and committee meetings of both Funds are held at the same time. Although the
fees paid to Trustees are expenses of the Funds, Service Corp. makes the
actual payment pursuant to its management agreements with the Funds, which
obligate Service Corp. to pay all of the operating expenses of the Funds (with
limited exceptions). See _Manager and Transfer Agent._
PRINCIPAL HOLDERS OF EQUITY SECURITIES
The following table sets forth each person or group known to the Fund to be
the record and beneficial owner of five percent (5%) or more of the Fund's
shares as of January 31, 1999:
<TABLE>
<CAPTION>
Title of Name and Address of Percent of
CLASS RECORD AND BENEFICIAL OWNER OWNERSHIP
<S> <C> <C>
Shares of Thermoseal, Inc. Pension Trust 8.09%
Beneficial 2350 Campbell Road
Interest Sidney, Ohio 45365
</TABLE>
INVESTMENT ADVISER
For the Fund's fiscal years ended December 31, 1996, 1997, and 1998 the
Adviser was paid $80,047, $77,457, and $89,174 respectively, under the
Investment Advisory Agreement.
The Adviser and Service Corp., as manager, jointly and severally have agreed
to reimburse the Fund (up to the amount of the respective fee received by
Adviser or Service Corp.) for the aggregate expenses of the Fund during any
fiscal year which exceed the limits prescribed by any state in which the
shares of the Fund are registered for sale. Currently, the most stringent
limitation provides that annual expenses of the Fund, including investment
advisory and management fees but excluding interest, taxes, brokerage
commissions and extraordinary expenses, shall not exceed two percent of the
first ten million dollars of the Fund's average net assets and one and
one-half percent of average net assets in excess of ten million dollars. The
Fund's expenses have never exceeded the foregoing limitations.
MANAGER AND TRANSFER AGENT
The Fund has entered into a Management and Transfer Agent Agreement
("Management Agreement") with PC&J Service Corp., 300 Old Post Office, 120
West Third Street, Dayton, Ohio, ("Service Corp.") in which Service Corp. has
agreed to manage the Fund's business affairs, exclusive of investment advice
provided by Adviser, and to serve as its transfer and dividend disbursing
agent. Service Corp. pays all expenses of the Fund (excluding interest,
taxes, brokerage and extraordinary expenses and fees payable under the
Investment Advisory Agreement and Management Agreement, all of which are
payable by the Fund).
These expenses include, but are not limited to, costs of furnishing documents
to shareholders and regulatory agencies, registration and filing fees, legal,
auditing, and custodian fees. Service Corp. pays the expenses of
shareholders' and Trustees' meetings and any fees paid to Trustees who are not
interested persons of the Adviser. Service Corp. was organized in October
1983, and its officers and directors are identical to those of Adviser.
As compensation for the overall management, transfer and dividend disbursing
agent services and payment of the foregoing expenses, the Fund will pay
Service Corp. a monthly fee, accrued daily, based on an annual rate of .5% of
the daily net asset value of the Fund.
For the Fund's fiscal years ended December 31, 1996, 1997, and 1998 Service
Corp. was paid $80,047, $77,456, and $89,173 respectively, under the
Management Agreement.
Service Corp. has agreed to pay the Fund's organizational costs and to provide
and pay the compensation for the Fund's officers and employees, to provide and
pay for office space and facilities required for its operation and generally
to provide and pay for the general administration and operation of the Fund,
including its compliance obligations under state and federal laws and
regulations (but excluding interest, taxes, brokerage and extraordinary
expenses and fees payable under the Investment Advisory Agreement and
Management Agreement, all of which are payable by the Fund).
CUSTODIAN
The Fund has appointed Star Bank, N.A., Cincinnati ("Custodian"), 425 Walnut
Street, Cincinnati, Ohio 45202, as the Fund's custodian. In such capacity the
Custodian will receive all new account applications in connection with initial
purchases of the Fund's shares, will receive and credit to the account of the
Fund all checks payable to the Fund and all wire transfers to the Fund. The
Custodian will hold all portfolio securities and other assets owned by the
Fund. Compensation for such services will be paid by Service Corp.
AUDITORS
The Fund has selected the firm of Deloitte & Touche, LLP as the independent
auditors for the Fund.
The Auditors' principal business address is: 1700 Courthouse Plaza Northeast,
Dayton, Ohio 45402.
It is expected that such independent public accountants will audit the annual
financial statements of the Fund, assist in the preparation of the Fund's
federal and state tax returns and advise the Fund as to accounting matters.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
Subject to the policies established by the Board of Trustees of the Fund, the
Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In executing such transactions, the Adviser
seeks to obtain the best net results for the Fund taking into account such
factors as price (including the applicable brokerage commission or dealer
spread), size of order, difficulties of execution and operational facilities
of the firm involved and the firm's risk in positioning a block of securities.
While the Adviser generally seeks reasonably competitive commission rates, for
the reasons stated in the prior sentence the Fund will not necessarily be
paying the lowest commission or spread available.
The Adviser may consider (a) provision of research, statistical and other
information to the Fund or to the Adviser, and (b) the occasional sale by a
broker-dealer of Fund shares as factors in the selection of qualified
broker-dealers who effect portfolio transactions for the Fund so long as the
Adviser's ability to obtain the best net results for portfolio transactions of
the Fund is not diminished. Such research services include supplemental
research, securities and economic analyses, and statistical services and
information with respect to the availability of securities or purchaser or
seller of securities. Such research services may also be useful to the Adviser
in connection with its services to other clients. Similarly, research services
provided by brokers serving such other clients may be useful to the Adviser in
connection with its services to the Fund. Although this information and the
occasional sale by a broker-dealer of Fund shares is useful to the Fund and
the Adviser, it is not possible to place a dollar value on it. It is the
opinion of the Board of Trustees and the Adviser that the review and study of
this information and the occasional sale by a broker-dealer of Fund shares
will not reduce the overall cost to the Adviser of performing its duties to
the Fund under the Investment Advisory Agreement. The Fund is not authorized
to pay brokerage commissions which are in excess of those which another
qualified broker would charge solely by reason of brokerage, research or
occasional sales services provided.
To the extent that the Fund and other clients of the Adviser seek to acquire
the same security at about the same time, the Fund may not be able to acquire
as large a position in such security as it desires or it may have to pay a
higher price for the security. Similarly, the Fund may not be able to obtain
as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Fund. In the event that more than one client purchases or sells the same
security on a given date, the purchases and sales will be allocated by the
Adviser in a manner that is fair and equitable to all parties involved.
DESCRIPTION OF SHARES AND TAXES
Shareholders have equal voting rights on all matters submitted for shareholder
vote. The Declaration of Trust limits the matters requiring a shareholder vote
to the election or removal of Trustees, approval of certain contracts of the
Fund such as the Investment Advisory Agreement with Adviser, approval of the
termination or reorganization of the Fund and certain other matters described
in such Declaration.
Shareholders have neither any preemptive rights to subscribe for additional
shares nor any cumulative voting rights. In the event of a liquidation,
shareholders of the Fund are entitled to receive the excess of the assets of
the Fund over the liabilities of the Fund in proportion to the shares of the
Fund held by them.
The Fund has qualified and intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended.
By so qualifying, the Fund will not be subject to Federal income taxes to the
extent that it distributes substantially all of its net investment income and
any net realized capital gains.
FINANCIAL STATEMENTS
The financial statements and independent auditors' report required to be
included in this Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the fiscal year
ended December 31, 1998.
FINANCIAL RATINGS
Description of Standard & Poor's Corporation's ("S&P") commercial paper and
corporate bond ratings:
Commercial Paper Ratings
A-1 -- Commercial paper rated A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very
strong.
A-1+ -- Those issues determined to possess overwhelming safety
characteristics are denoted A-1+.
A-2 -- Commercial paper rated A-2 by S&P indicates that capacity for
timely payment on issues is strong. However, the relative degree
of safety is not as high as for issues designated A-1.
Debt Ratings
AAA -- This is the highest rating assigned by S&P to a debt obligation
and indicates an extremely strong capacity to pay principal and
interest.
AA -- Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the
majority of instances they differ from AAA issues only in small
degree.
A -- Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions.
BBB -- Debt rate BBB is regarded as having an adequate capacity
to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
Description of Moody's Investors Service, Inc.'s ("Moody's) commercial paper
and corporate bond ratings:
Commercial Paper Ratings
Prime-1 - Issuers rated Prime-1 (or related supporting institutions)
are considered to have a superior capacity for repayment of
short-term promissory obligations.
Prime-2 - Issuers rated Prime-2 (or related supporting institutions)
have a strong capacity for repayment of short-term promissory
obligations. This will normally be evidenced by many of the
characteristics of Prime-1 rated issuers, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variations. Capitalization characteristics, while still
appropriate, may be affected by external conditions. Ample
alternative liquidity is maintained.
Debt 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 or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in Aaa
securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade
obligations (I.E., they are neither highly protected nor poorly
secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
<R/>
<PAGE>
PC&J PRESERVATION FUND
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Articles of Incorporation
(i) Copy of Registrant's Declaration of Trust, which was filed as an Exhibit to
the Registrant's Post-Effective Amendment No. 15, is hereby incorporated by
reference.
(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust, which was
filed as an Exhibit to the Registrant's Post-Effective Amendment No. 15, is
hereby incorporated by reference.
(iii) Copy of Amendment No. 2 to Registrant's Declaration of Trust, which was
filed as an Exhibit to the Registrant's Post-Effective Amendment No. 15, is
hereby incorporated by reference.
(b) By-Laws
(i) Copy of Registrant's By-Laws, which was filed as an Exhibit to the
Registrant's Post-Effective Amendment No. 15, is hereby incorporated by
reference.
(ii) Copy of Amendment No. 1 to Registrant's By-Laws, which was filed as an
Exhibit to the Registrant's Post-Effective Amendment No. 15, is hereby
incorporated by reference.
(c) Instruments Defining Rights of Security Holders - None other than in the
Declaration of Trust, as amended, and By-Laws, as amended, of the Registrant.
(d) Investment Advisory Contracts.
(i)Copy of Registrant's Investment Advisory Agreement with its Adviser, Parker
Carlson & Johnson, Inc., which was filed as an Exhibit to the Registrant's Post-
Effective Amendment No. 15, is hereby incorporated by reference.
(ii) Copy of Registrant's Management and Transfer Agent Agreement with PC&J
Service Corp., which was filed as an Exhibit to the Registrant's Post-Effective
Amendment No. 15, is hereby incorporated by reference.
(iii) Copy of Amendment No. 1 to Registrant's Management and Transfer Agent
Agreement, which was filed as an Exhibit to the Registrant's Post-Effective
Amendment No. 15, is hereby incorporated by reference.
(e) Underwriting Contracts - None.
(f) Bonus or Profit Sharing Contracts - None.
(g) Custodian Agreements. Copy of Registrant's Agreement with the Custodian,
Star Bank, N.A., Cincinnati, which was filed as an Exhibit to the Registrant's
Post-Effective Amendment No. 15, is hereby incorporated by reference.
(h) Other Material Contracts - None.
(i) Legal Opinion. Opinion and Consent of Brown, Cummins & Brown Co., L.P.A.,
which was filed as an exhibit to Registrant's Post-Effective Amendment No. 14,
is hereby incorporated by reference.
(j) Other Opinions. Consent of Deloitte & Touche, LLP is filed herewith.
(k) Omitted Financial Statements - None.
(l) Initial Capital Agreements. Copy of Letter of Initial Stockholder, which
was filed as an Exhibit to the Registrant's Post-Effective Amendment No. 15, is
hereby incorporated by reference.
(m) 12b-1 Plan. Copy of Registrant's 12b-1 Distribution Expense Plan, which
was filed as an Exhibit to the Registrant's Post-Effective Amendment No. 15, is
hereby incorporated by reference.
(n) Financial Data Schedule - None.
(o) Rule 18f-3 Plan - None.
(p) Power of Attorney
(i) Power of Attorney for Registrant and Certificate with respect thereto,
which were filed as an Exhibit to the Registrant's Post-Effective Amendment No.
15, are hereby incorporated by reference.
(ii) Power of Attorney for Trustees and Officers of Registrant, which were
filed as an Exhibit to the Registrant's Post-Effective Amendment No. 15, are
hereby incorporated by reference.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
None.
ITEM 25. INDEMNIFICATION
(a) Article VI of the Registrant's Declaration of Trust provides for
indemnification of officers and Trustees as follows:
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. The
Fund shall indemnify each of its Trustees and officers (including
persons who serve at the Fund's request as directors, officers or
trustees of another organization in which the Fund has any interest as
a shareholder, creditor or otherwise (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and expenses, including reasonable accountants'
and counsel fees, incurred by any Covered Person in connection with
the defense or disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, director or trustee,
and except that no Covered Person shall be indemnified against any
liability to the Fund or its Shareholders to which such Covered Person
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of such Covered Person's office ("disabling conduct").
Anything herein contained to the contrary notwithstanding, no Covered
Person shall be indemnified for any liability to the Fund or its
shareholders to which such Covered Person would otherwise be subject
unless (1) a final decision on the merits is made by a court or other
body before whom the proceeding was brought that the Covered Person
to be indemnified is not liable by reason of disabling conduct or,
(2) in the absence of such a decision, a reasonable determination is
made, based upon a review of the facts, that the Covered Person was
not liable by reason of disabling conduct, by (a) the vote of a
majority of a quorum of Trustees who are neither "interested persons"
of the Fund as defined in the Investment Company Act of 1940 nor
parties to the proceeding ("disinterested, non-party Trustees"), or
(b) an independent legal counsel in a legal opinion.
SECTION 6.5 ADVANCES OF EXPENSES. The Fund shall advance
attorneys' fees or other expenses incurred by a Covered Person in
defending a proceeding, upon the undertaking by or on behalf of the
Covered Person to repay the advance unless it is ultimately determined
that such Covered Person is entitled to indemnification, so long as
one of the following conditions is met: (i) the Covered Person shall
provide security for his undertaking, (ii) the Fund shall be insured
against losses arising by reason of any lawful advances, or (iii) a
majority of a quorum of the disinterested non-party Trustees of the
Fund, or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (as opposed to
a full trial-type inquiry), that there is reason to believe that the
Covered Person ultimately will be found entitled to indemnification.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of
or affect any other rights to which any such Covered Person may be
entitled. As used in this Article VI, "Covered Person" shall include
such person's heirs, executors and administrators, an "interested
Covered Person" is one against whom the action, suit or other
proceeding in question or another action, suit or other proceeding on
the same or similar grounds is then or has been pending or threatened,
and a "disinterested" person is a person against whom none of such
actions, suits or other proceedings or another action, suit or other
proceeding on the same or similar grounds is then or has been pending
or threatened. Nothing contained in this Article VI shall affect any
rights to indemnification to which personnel of the Fund, other than
Trustees and officers, and other persons may be entitled by contract
or otherwise under law, nor the power of the Fund to purchase and
maintain liability insurance on behalf of any such person.
The Registrant may not pay for insurance which protects the
Trustees and officers against liabilities rising from action involving
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of their offices.
(b) The Registrant may maintain a standard mutual fund and investment
advisory professional and directors and officers liability policy.
The policy, if maintained, would provide coverage to the Registrant,
its Trustees and officers, and its Adviser, among others. Coverage
under the policy would include losses by reason of any act, error,
omission, misstatement, misleading statement, neglect or breach of
duty.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the provisions of
Ohio law and the Declaration of Trust of the Registrant or the By-Laws
of the Registrant, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Fund in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
None.
ITEM 27. PRINCIPAL UNDERWRITERS
None.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Kathleen A. Carlson, 300 Old Post Office, 120 West Third Street,
Dayton, Ohio 45402, has been charged with the responsibility of
maintaining physical possession of each account, book or other
document required to be maintained by Section 31(a) to the
Investment Company Act of 1940 and the rules promulgated thereunder.
ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B
None.
ITEM 30. UNDERTAKINGS
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned thereunto duly authorized, in the
City of Cincinnati, and State of Ohio on this 19th day of February, 1999.
PC&J PRESERVATION FUND
By:/s/
----------------------------------
JAMES M. JOHNSON, Attorney-In-Fact
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the date indicated:
SIGNATURE CAPACITY
Leslie O. Parker III President, Trustee )
and Principal )
Executive )
Officer )
)
Kathleen A. Carlson Treasurer, Trustee, )
Principal Financial )
and Accounting )
Officer ) By:/s/
------------------
) James M. Johnson,
James M. Johnson Secretary and ) Attorney-in-Fact
Trustee )
) February 19, 1999
)
Donald N. Lorenz Trustee )
)
Thomas H. Rodgers Trustee )
<PAGE>
EXHIBIT INDEX
EXHIBIT
Consent of Deloitte & Touche, LLP............................ Ex-99.B11
Ex-99.B11
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 16 to Registration
Statement No. 2-95285 under the Securities Act of 1933, of our report dated
January 22, 1999, relating to PC&J Preservation Fund, incorporated by
reference in the Statement of Additional Information, which is a part of such
Registration Statement and to the references to us under the headings
'Financial Highlights' and 'Auditors' in such Registration Statement.
/s/ Deloitte & Touche LLP
Dayton, Ohio
February 23, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FUND'S FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR THE
TWELVE MONTHS ENDED DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000760692
<NAME> PC&J PRESERVATION FUND
<SERIES>
<NUMBER> 01
<NAME> PC&J PRESERVATION FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 18,864,880
<INVESTMENTS-AT-VALUE> 19,500,505
<RECEIVABLES> 368,017
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19,868,522
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,643
<TOTAL-LIABILITIES> 16,643
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19,216,254
<SHARES-COMMON-STOCK> 1,746,275
<SHARES-COMMON-PRIOR> 1,442,249
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 635,625
<NET-ASSETS> 19,851,879
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,113,729
<OTHER-INCOME> 0
<EXPENSES-NET> 178,347
<NET-INVESTMENT-INCOME> 935,382
<REALIZED-GAINS-CURRENT> 241,455
<APPREC-INCREASE-CURRENT> 249,373
<NET-CHANGE-FROM-OPS> 1,426,210
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 935,382
<DISTRIBUTIONS-OF-GAINS> 218,402
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 323,475
<NUMBER-OF-SHARES-REDEEMED> 120,942
<SHARES-REINVESTED> 101,493
<NET-CHANGE-IN-ASSETS> 3,780,607
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 23,053
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 89,174
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 178,347
<AVERAGE-NET-ASSETS> 17,826,832
<PER-SHARE-NAV-BEGIN> 11.14
<PER-SHARE-NII> .57
<PER-SHARE-GAIN-APPREC> .36
<PER-SHARE-DIVIDEND> .57
<PER-SHARE-DISTRIBUTIONS> .13
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.37
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
