PROSPECTUS
[LOGO] Morgan Keegan Southern Capital Fund
The fund seeks capital appreciation by investing principally in securities of
companies which are headquartered in the southern United States.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the fund's shares or determined whether this prospectus
is complete or accurate. To state otherwise is a crime.
MORGAN KEEGAN & COMPANY, INC.
Morgan Keegan Tower
Fifty Front Street
Memphis, Tennessee 38103
(901) 524-4100
(800) 366-7426
November 1, 1999
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TABLE OF CONTENTS
PAGE
Investment Objective...........................................................1
Principal Investment Strategies................................................1
Principal Risks................................................................1
Performance....................................................................3
Fees and Expenses of the fund..................................................4
Fees...........................................................................5
Your Account...................................................................5
Buying shares................................................................5
Policies for Buying Shares...................................................6
Buying Shares Through an Investment Broker...................................6
To Add to an Account.........................................................7
Selling Shares...............................................................7
To Sell Some or All of Your Shares...........................................8
Account Policies...............................................................8
Investor Services..............................................................9
Management and Investment Adviser.............................................10
Portfolio Manager.............................................................10
Distributions.................................................................11
Tax Considerations............................................................11
Financial Highlights..........................................................12
Account Application...........................................................13
For Additional Information............................................Back Cover
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INVESTMENT OBJECTIVE
The fund seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The fund seeks to achieve its objective by investing at least 65% of its assets
in equity and debt securities of companies that are headquartered in the
southern United States. The fund may invest up to 35% of its assets in
securities of companies headquartered outside that region which offer attractive
opportunities for capital appreciation. For purposes of this Prospectus, a
company is "headquartered" in the southern United States if its principal
corporate offices are located in the southern United States or if (alone or on a
consolidated basis) it derives 50% or more of its total revenues from either
goods produced, sales made or services performed in Alabama, Arkansas, Florida,
Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma,
South Carolina, Tennessee, Texas, Virginia and West Virginia.
The fund's Adviser believes that the demographic and economic characteristics of
the region provide the basis of greater than average potential for capital
appreciation of companies headquartered there. These characteristics include
mild climate, lower state taxes, labor availability, government attitudes
generally favorable to business development and average annual pay below the
national average.
The fund's Adviser selects investments primarily based on a fundamental analysis
of specific companies. Analysis includes consideration of the overall financial
health and prospects of given companies, with attention to the following
factors: return on equity, rate of growth of earnings, and price to earnings
ratios, as compared to the company's historic performance and to the ratios of
the industry at large.
The fund will invest primarily in common stock, preferred stock and convertible
debt securities. Normally the fund would not expect to invest more than 35% of
its assets in non-convertible debt securities, including high quality money
market instruments (such as certificates of deposit), repurchase agreements and
cash. The fund will only invest in debt securities that are rated in the top
four credit categories by at least one nationally recognized statistical rating
organization (NRSRO) at the time of purchase or, if not rated, that are
considered by the Adviser to be of comparable quality.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in money market instruments, repurchase agreements and cash. To the extent the
fund uses this strategy, it may not achieve its investment objective.
PRINCIPAL RISKS
An investment in the fund is not guaranteed. As with any mutual fund, the value
of the fund's shares will change and you could lose money by investing in the
fund. In addition, the performance of the fund depends on the Adviser's ability
to implement the investment strategy of the fund.
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A variety of factors may influence the fund's investment performance, such as:
o MARKET RISK. Because the fund invests primarily in U.S.-traded
equity securities, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities such as U.S. government securities, corporate bonds and
preferred stock, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of a company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's price
to fall.
For bonds, market risk generally reflects credit risk and interest rate
risk. Credit risk is the actual or perceived risk that the issuer of
the bond will not pay the interest and principal payments when due.
Bond values typically decline if the issuer's credit quality
deteriorates. Interest rate risk is the risk that interest rates will
rise and the value of bonds will fall. A broad-based market drop may
also cause a bond's price to fall.
o GEOGRAPHICAL FOCUS RISK. Investment in a portfolio of securities of
companies headquartered in a specific geographical region such as
the southern United States in which the fund invests involves
greater risk of possible loss than investment in a portfolio of
securities which have headquarters throughout the United States. The
fund may be more affected by a common adverse factor than a fund
with a portfolio which is not geographically concentrated. There is
the risk that those economic and demographic factors that, in the
opinion of the Adviser, favor the growth of companies headquartered
in the southern United States might not result in the growth of such
companies or in their stock prices. There is further risk that other
factors, such as adverse economic conditions in Latin America, could
adversely affect the economic climate of the southern United States.
o YEAR 2000 RISK. Like other mutual funds, the fund could be affected by
problems relating to the ability of computer systems to recognize
the year 2000. The fund is taking steps to ensure that its computer
systems are compliant with Year 2000 issues and to determine that
the systems used by its major service providers are also compliant.
Issuers whose securities are held in the fund's portfolio may also
be adversely affected by the Year 2000 issue. At the same time, it
is impossible to know whether these problems, which could disrupt
the fund's operations and investments if uncorrected, have been
adequately addressed until the date in question arrives.
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PERFORMANCE
RISK/RETURN BAR CHART AND TABLE:
The following bar chart shows the risks of investing in the fund by showing how
the fund's performance has varied from year to year. The fund's inception date
was September 22, 1986. The chart does not reflect the effect of sales charges;
if it did, the total returns shown would be lower. The table that follows the
chart shows the average annual returns over several time periods for the fund's
shares compared with those of the S&P 500 Index.* The table compares fund
returns to returns on a broad-based market index that is unmanaged and that,
therefore, does not include any sales charges or expenses. The fund's past
performance does not necessarily indicate how the fund will perform in the
future.
TOTAL RETURN
Year Fund
1989 14.05%
1990 -15.07%
1991 33.79%
1992 17.46%
1993 5.20%
1994 -4.17%
1995 29.39%
1996 20.17%
1997 34.68%
1998 12.23%
Year-to-date performance as of 9/30/99: -6.02%
Best quarter during years shown: ending December 31, 1998 : 24.11%
Worst quarter during years shown: ending September 30, 1990 : -19.69%
AVERAGE ANNUAL TOTAL RETURNS
(as of December 31, 1998)
SOUTHERN CAPITAL FUND S&P 500 INDEX
ONE YEAR 12.23% 28.58%
FIVE YEARS 17.61% 24.06%
TEN YEARS 13.68% 19.21%
* The S&P 500 is an unmanaged index of U.S. stocks.
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FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES (fees paid directly from your investment)
- ----------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases: (as a
percentage of offering price)..................................... 3.0%
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends and other Distributions................................. None
Maximum Deferred Sales Charge (Load) ............................. None
Redemption Fee (as a percentage of amount redeemed)............... None
Exchange Fee...................................................... None
Maximum Account Fee............................................... None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted
from fund assets)
- ----------------------------------------------------------
Management fee................................................... 1.00%
Distribution and Service (12b-1) fees........................... 0.50%
Other expenses................................................... 0.24%
-----
Total annual fund operating expenses............................. 1.74%
=====
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
This Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all your shares at the end of these periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$472 $833 $1,219 $2,300
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FEES
You may purchase shares at the net asset value next determined after receipt of
your order plus a sales charge equal to 3% of the public offering price (3.09%
of the net amount of the purchase price invested in shares of the fund). On
sales of $1 million or more, you may purchase shares at the net asset value next
determined after receipt of your order plus a sales charge equal to 1% of the
public offering price (1.01% of the net amount of the purchase price invested in
fund shares). If you intend to purchase at least $1 million of fund shares, you
may also purchase shares at a 1% sales charge pursuant to a letter of intention
program that permits purchases within a two-year period to be aggregated for
this purpose. The "letter of intent" allows you to count all investments in this
fund or other Morgan Keegan funds over the next 24 months as if you were making
them all at once, for purposes of calculating sales charges. In certain other
circumstances, the sales charge may be waived; please see the fund's Statement
of Additional Information.
- ------------------------------------------------------------------------------
Sales Charge
Your investment As a % of offering price As a % of net amount invested
up to $999,999 3.00% 3.09%
$1 million and over 0.00% 0.00%
- ------------------------------------------------------------------------------
Morgan Keegan acts as distributor of the fund's shares pursuant to a plan of
distribution ("Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940 and an Underwriting Agreement between it and the fund. Under the Plan, the
fund pays Morgan Keegan a service fee computed daily and paid monthly at the
annual rate of .25% of the fund's average daily net assets and a distribution
fee as compensation for its distribution services, computed daily and paid
monthly, at the annual rate of .25% of the fund's average daily net assets.
Because these fees are paid out of the fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
YOUR ACCOUNT
BUYING SHARES. If you are buying shares through a Morgan Keegan & Company, Inc.
("Morgan Keegan") investment broker, he or she can assist you with all phases of
your investment.
MINIMUM INITIAL INVESTMENT:
o $500
MINIMUM ADDITIONAL INVESTMENT:
o $250
Initial and subsequent investments in an IRA account established on behalf of a
non working spouse of a shareholder who has an IRA invested in the fund require
a minimum amount of only $250. In addition, once you have established an
account, the minimum amount for subsequent
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investments will be waived if an investment in an IRA or similar plan is the
maximum amount permitted under the Internal Revenue Code of 1986, as amended
(the "Code").
If you are investing through a large retirement plan or other special program,
follow the instructions in your program materials.
POLICIES FOR BUYING SHARES
TIMING OF REQUESTS. All requests received by the close of the New York Stock
Exchange ("NYSE") (normally 4:00 p.m. eastern time) will be executed the same
day, at that day's closing share price. Orders received after the closing of the
NYSE will be executed the following day, at that day's closing share price. To
purchase shares at the next computed net asset value you must submit an order to
Morgan Keegan by completing the enclosed purchase application and sending it
along with a check to Morgan Keegan at the address listed in the application or
through a pre-authorized check or transfer plan offered by other financial
institutions.
PURCHASES BY CHECK. Complete the enclosed purchase application. Forward your
application, with all appropriate sections completed, along with a check for
your initial investment payable to your Morgan Keegan investment broker or
Morgan Keegan at 50 North Front Street, Memphis, TN 38103.
Call your Morgan Keegan investment broker or Morgan Keegan at 800-366-7426 or
visit our Web site at www.morgankeegan.com.
BUYING SHARES THROUGH AN INVESTMENT BROKER
BY MAIL. Send a completed purchase application to Morgan Keegan at the address
at the bottom of this page. Specify the account number and the dollar value or
number, if any, of shares. Be sure to include any necessary signatures and any
additional documents.
BY TELEPHONE. As long as the transaction does not require a written request, you
or your investment broker can buy shares by calling Morgan Keegan at
800-366-7426. A confirmation will be mailed to you promptly. Purchase requests,
where you do not currently have an account with Morgan Keegan, must be made by
written application and be accompanied by a check to Morgan Keegan.
BY EXCHANGE. Read the prospectus for the fund into which you are exchanging.
Call Morgan Keegan at 800-366-7426 or visit our Web site at
www.morgankeegan.com. All exchanges may be made by telephone and mail.
BY SYSTEMATIC INVESTMENT. See plan information on page 9.
MORGAN KEEGAN & CO., INC.
50 North Front Street, Memphis, TN 38103
Call toll-free: 1-800-366-7426
(8:30 a.m. - 4:30 p.m., business days, central time)
www.morgankeegan.com
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TO ADD TO AN ACCOUNT
BY PHONE. Contact Morgan Keegan at 800-366-7426.
BY CHECK. Fill out the investment stub from an account statement, or indicate
the fund name and share class on your check. Make checks payable to "Morgan
Keegan." Mail the check and stub to Morgan Keegan at 50 North Front Street,
Memphis, TN 38103.
SYSTEMATIC INVESTMENT. Call Morgan Keegan to verify that systematic investment
is in place on your account, or to request a form to add it. Investments are
automatic once this is in place.
Call your Morgan Keegan investment broker or Morgan Keegan at 800-366-7426 or
visit our Web site at www.morgankeegan.com.
SELLING SHARES
POLICIES FOR SELLING SHARES
CIRCUMSTANCES THAT REQUIRE WRITTEN REQUESTS. Please submit instructions in
writing when any of the following apply:
o You are selling more than $100,000 worth of shares
o The name or address on the account has changed within the last 30 days
o You want the proceeds to go to a name or address not on the account
registration
o You are transferring shares to an account with a different registration
o You are selling shares held in a corporate or fiduciary account; for these
accounts additional documents are required:
CORPORATE ACCOUNTS: certified copy of a corporate resolution
FIDUCIARY ACCOUNTS: copy of power of attorney or other governing document
To protect your account against fraud, all written requests must bear signature
guarantees. You may obtain a signature guarantee at most banks and securities
dealers. A notary public cannot provide a signature guarantee.
TIMING OF REQUESTS. All requests received by Morgan Keegan before the close of
the NYSE (normally 4:00 p.m. eastern time) will be executed the same day, at
that day's closing price. Requests received after the close of the NYSE will be
executed the following day, at that day's closing share price.
SELLING RECENTLY PURCHASED SHARES. If you sell shares before the payment for
those shares has been collected, you will not receive the proceeds until your
initial payment has cleared. This may take up to 15 days after your purchase
date. Any delay would occur only when it cannot be determined that payment has
cleared.
REDEMPTIONS. The fund will redeem your shares without additional cost.
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TO SELL SOME OR ALL OF YOUR SHARES
THROUGH AN INVESTMENT BROKER
BY MAIL. Send a letter of instruction, an endorsed stock power or share
certificates (if you hold certificate shares) to Morgan Keegan at the address at
the bottom of this page. Specify the account number and the dollar value or
number of shares. Be sure to include any necessary signatures and any additional
documents.
BY TELEPHONE. As long as the transaction does not require a written request (see
facing page), you or your Morgan Keegan investment broker can sell shares by
calling Morgan Keegan at 800-366-7426. A check will be mailed to you on the
following business day.
BY EXCHANGE. Read the prospectus for the fund into which you are exchanging.
Call Morgan Keegan at 800-366-7426 or visit our Web site at
www.morgankeegan.com. All exchanges may be made by telephone and mail.
BY SYSTEMATIC WITHDRAWAL. See plan information on page 9.
MORGAN KEEGAN & CO., INC.
50 North Front Street, Memphis, TN 38103
Call toll-free: 1-800-366-7426
(8:30 a.m. - 4:30 p.m., business days, central time)
www.morgankeegan.com
ACCOUNT POLICIES
BUSINESS HOURS. The fund is open the same days as the NYSE (generally Monday
through Friday). Representatives of the fund are available normally from 8:30
a.m. to 4:30 p.m. central time on these days.
CALCULATING SHARE PRICE. The offering price of one share is its net asset value
plus a sales charge (currently a maximum of 3% of the offering price, or 3.09%
of the net amount invested). Net asset value per fund share will be determined
daily as of the close of the NYSE, on every day that the NYSE is open for
business, by dividing the value of the total assets of the fund, less
liabilities, by the total number of shares outstanding at such time. Securities
owned by the fund for which market quotations are readily available will be
valued at current market value, and other securities and assets generally will
be valued at fair value by or under the direction of the Board of Directors.
TELEPHONE REQUESTS. When you open an account you automatically receive telephone
privileges, allowing you to place requests on your account by telephone. Your
investment broker can also use these privileges with your written permission, to
request redemptions. As long as Morgan Keegan takes certain measures to
authenticate telephone requests on your account, you may be held responsible for
unauthorized requests. Unauthorized telephone
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requests are rare, but if you want to protect yourself completely, you can
decline the telephone privilege on your application. The fund may suspend or
eliminate the telephone privilege at any time. The fund will provide 7 days'
prior written notice before suspending or eliminating telephone privileges.
EXCHANGE PRIVILEGES. There is no fee to exchange shares of the fund for Class A
shares of Morgan Keegan Select Fund. Your new fund shares will be the same class
as your current shares. Any contingent deferred sales charges will continue to
be calculated from the date of your initial investment.
Frequent exchanges can interfere with fund management and drive up costs for all
shareholders. Because of this, the fund currently limits each account, or group
of accounts under common ownership or control, to six exchanges per calendar
year. The fund may change or eliminate the exchange privilege at any time, may
limit or cancel any shareholder's exchange privilege and may refuse to accept
any exchange request. The fund will provide 60 days' prior written notice before
materially amending, suspending or eliminating exchange privileges.
ACCOUNTS WITH LOW BALANCES. If the value of your account falls below $500 due,
to exchanges and redemption, Morgan Keegan may mail you a notice asking you to
bring the account back up to $500 or close it out. If you do not take action
within 60 days, Morgan Keegan may sell your shares and mail the proceeds to you
at the address of record.
SUSPENSION. At any time, the fund may suspend the purchase of its shares.
Additionally the fund may suspend the right of redemption.
INVESTOR SERVICES
SYSTEMATIC INVESTMENT PROGRAM (SIP). Use SIP to set up regular automatic
investments in the fund from your bank account. You determine the frequency and
the amount of your investments, and you can skip an investment with three days'
notice.
SYSTEMATIC WITHDRAWAL PLAN. This plan is designated for retirees and other
investors who want regular withdrawals from their fund account. Certain terms
and minimums apply.
DIVIDEND ALLOCATION PLAN. This plan automatically invests your distributions
from the fund into another fund of your choice, without any fees or sales
charges.
AUTOMATIC BANK CONNECTION. This plan lets you route any distributions or
Systematic Withdrawal Plan payments directly to your bank account.
AUTOMATED INVESTMENTS OR WITHDRAWALS. Set up regular investments or withdrawals
to suit your needs and let Morgan Keegan do the work for you.
MOVE MONEY BY PHONE. Designate this on your application and you can move money
between your bank account and your Morgan Keegan account with a phone call.
DIVIDEND REINVESTMENT. Have your dividends automatically reinvested at no sales
charge.
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EXCHANGES. It's easy to move money from the fund to the Morgan Keegan Select
Fund, with no exchange fees. (Exchange privilege may be changed or discontinued
at any time.) Call 800-366-7426 or visit our Web site at www.morgankeegan.com.
OPENING a regular investment or a tax-deferred retirement account at Morgan
Keegan is easy. Your investment broker can help you determine if this fund is
right for you. He or she is trained to understand investments and can help speed
the application process.
TAKE ADVANTAGE of everything your investment broker and Morgan Keegan have to
offer. The services described on this page can make investing easy for you. And
your investment broker can be a valuable source of guidance and additional
services, for planning your investments and for keeping them on track with your
goals.
Morgan Keegan also offers a full range of prototype retirement plans for
individuals, sole proprietors, partnerships, corporations and employees. Call
800-366-7426 for information on retirement plans or any of the services
described above.
MANAGEMENT AND INVESTMENT ADVISER
The fund is managed by Morgan Asset Management, Inc. ("Adviser"), a wholly owned
subsidiary of Morgan Keegan, Inc. Subject to the supervision of the Board of
Directors, the Adviser manages the investment and other affairs of the fund and
directs the investments of the fund in accordance with its investment objective,
policies and limitations pursuant to an Investment Advisory and Management
Agreement between the fund and the Adviser. The Adviser's address is Morgan
Keegan Tower, Fifty Front Street, Memphis, Tennessee 38103. Founded in 1986, the
Adviser has, as of September 30, 1999, more than $1 billion in total assets
under management.
The Adviser receives for its services a management fee, calculated daily and
payable quarterly, at an annual rate of 1% of the average daily net assets of
the fund for the first $100 million of average daily net assets and 0.75% of
average daily net assets exceeding $100 million. The Adviser has agreed to waive
its fee and to reimburse the fund to the extent its annual expenses (excluding
brokerage, interest, taxes, and extraordinary expenses) exceed 2.0% of net
assets. The net fee paid to the Adviser for the past fiscal year was $877,482.
The fund expects to use Morgan Keegan as broker for all or a substantial portion
of its agency transactions in listed securities at commission rates and under
circumstances consistent with the policy of best execution. Morgan Keegan also
provides accounting services to the fund and acts as its transfer and dividend
disbursing agent.
PORTFOLIO MANAGER
Since July 1, 1994, E. Elkan Scheidt, a managing director of Morgan Keegan and
an employee of Morgan Asset Management, Inc. has served as the portfolio manager
of the fund. From November 1990 to July 1, 1994, Mr. Scheidt served as assistant
to the portfolio manager of the fund. Mr. Scheidt joined Morgan Keegan as an
investment broker in 1985. He received a B.A. in Economics from Tulane
University in New Orleans, Louisiana.
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DISTRIBUTIONS
INCOME AND CAPITAL GAIN DISTRIBUTIONS. The fund distributes its net investment
income and net capital gain to shareholders. Net capital gains, if any, are
distributed annually.
You may have your distributions reinvested in shares of the fund or credited to
your brokerage account or mailed out by check. If you do not give Morgan Keegan
other instructions, your distributions will automatically be reinvested in
shares of the fund. Distributions to Keogh plans, 401(k) plans and other
qualified retirement plans are generally reinvested in fund shares (without a
sales charge).
TAX CONSIDERATIONS
TAX EFFECTS OF DISTRIBUTIONS AND TRANSACTIONS. Every year, the fund will send
you information detailing the amount of dividends and net capital gain
distributed to you for the previous year. In general, any dividends and net
short-term capital gain distributions you receive from the fund are taxable as
ordinary income. Distributions of other capital gains are generally taxable as
long-term capital gains. This is true no matter how long you have owned your
shares and whether you reinvest your distributions or take them in cash.
The sale of shares in your account may produce a taxable gain or loss. For tax
purposes, an exchange is the same as a sale.
Unless your investment is in a tax-deferred account, you may want to avoid:
o Investing a large amount in the fund shortly before a capital gain
distribution payment date (if the fund makes a capital gain distribution, you
will receive some of your investment back as a taxable distribution), or
o Selling shares of the fund at a loss for tax purposes and reinvesting in
shares of the fund within 30 days before or after that sale (such a
transaction is considered a "wash sale," and you will not be allowed to
deduct all or part of the tax loss).
Your investment in the fund could have additional tax consequences. Please
consult your tax professional for assistance.
BACKUP WITHHOLDING. By law, the fund must withhold 31% of your distributions and
redemption proceeds if you have not provided complete, correct taxpayer
identification information and 31% of your distributions if you are otherwise
subject to backup withholding.
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the fund (assuming reinvestment of all dividends and distributions). This
information has been audited by KPMG LLP, independent accountants, whose report,
along with the fund's financial statements, is included in the fund's Annual
Report to Shareholders. Annual Reports may be obtained without charge by calling
1-800-366-7426.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/99 6/30/98 6/30/97 6/30/96 6/30/95
---------- ---------- --------- ---------- ----------
Net Asset Value, $ 26.56 $ 21.64 $ 18.06 $ 14.34 $ 12.96
beginning of period
- ---------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income
(loss) (0.17) (0.16) (0.11) (0.07) 0.07
Net Gains on Securities 1.46 5.57 4.64 4.08 1.68
Total from Investment
Operations 1.29 5.41 4.53 4.01 1.75
- ---------------------------
LESS DISTRIBUTIONS
Dividends (from net - - - (0.03) (0.08)
investment income)
Distribution (from
realized gains) (0.72) (0.49) (0.87) (0.26) (0.29)
Distribution (return of
capital) (0.03) - (0.08) - -
Net Asset Value, end of
period $27.10 $26.56 $21.64 $18.06 $14.34
Total Return** 5.20% 25.32% 26.32% 28.30% 13.81%
- ---------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, end of
period $95,893,801 $88,207,007 $53,925,763 $37,505,196 $27,259,499
Expenses to Average
Net Assets+ 1.74% 1.79% 2.00% 2.00% 2.00%
Net Investment Income
to Average Net Assets (0.7%) (0.7%) (0.6%) (0.5%) 0.6%
Portfolio Turnover Rate 15% 28% 30% 69% 54%
</TABLE>
- ---------------------------
** Total return does not include front end sales load.
+ 2.2% and 2.2%, before excess reimbursement and fee waiver from Advisor in 1996
and 1995, respectively.
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MORGAN KEEGAN SOUTHERN CAPITAL FUND, INC.
ACCOUNT APPLICATION
Do not use this Application for IRA or Keogh Plans.
For special forms or if you need assistance completing this Application,
Please call your Morgan Keegan broker or Morgan Keegan at 1-800-366-7426.
Please print all items except signatures.
Please use blue or black ink only.
<TABLE>
<CAPTION>
<S> <C> <C>
1. ACCOUNT REGISTRATION (PLEASE CHOOSE ONE)
[ ] Individual or Joint Account*
_________________________________________________________________________________________
Owner's name (first, middle initial, last)
and
_________________________________________________________________________________________
Joint owner's name (first, middle initial, last)
*Joint tenancy with right of survivorship presumed, unless otherwise
indicated.
OR
[ ] UNIFORM GIFTS/TRANSFERS TO MINORS (UGMA/UTMA)
________________________________________________________________________________________as
custodian for
Custodian's name (first, middle initial, last - one custodian only)
__________________________________________________________________________________________
Minor's name (first, middle initial, last - one minor only)
Under the ____________________________________________Uniform Gifts/Transfers to Minors Act
State
- -----/------/------
Minor's date of birth
OR
[ ] TRUST
______________________________________________________________________________As trustee(s) of
Trustee(s) name
_____________________________________________________________________________for the benefit of
Name of trust agreement
_________________________________________________________________________________________
Beneficiary's name (if applicable) Date of trust agreement
</TABLE>
<PAGE>
For Trust Accounts, a Multi-Purpose Certification form may be required to
authorize redemptions and add privileges. Please call your Morgan Keegan broker
or Morgan Keegan Fund Services at 1-800-366-7426 to determine if a Multi-Purpose
Certification Form is required.
OR
[ ] CORPORATION, PARTNERSHIP, ESTATE OR OTHER ENTITY
________________________________________________________________________________
Name of Corporation, Partnership, Estate or Other Entity
________________________________________________________________________________
Type of Entity
For Corporation, Partnership, Estate or other Entities, a Multi-Purpose
Certification Form is required to authorize redemptions and add privileges. If
you have any questions please call your Morgan Keegan broker or Morgan Keegan
Fund Services at 1-800-366-7426.
2. ADDRESS
________________________________________________________________________________
Street or P.O. Box Apt. No.
________________________________________________________________________________
City State Zip Code
( ) ( )
________________________________________________________________________________
Daytime phone number Evening phone number
If you are not a citizen or resident alien of the U.S., please specify country
of permanent residence.
________________________________________________________________________________
Country of permanent residence
<PAGE>
3. SOCIAL SECURITY NUMBER OR OTHER TAXPAYER IDENTIFICATION NUMBER
[-----] [-----] [-----] [-----] [-----] [-----] [-----] [-----] [-----]
o INDIVIDUAL ACCOUNTS Specify the Social Security number of the owner.
o *JOINT ACCOUNTS Specify the Social Security number of the first named owner.
o UNIFORM GIFTS/TRANSFERS TO MINORS ACCOUNTS Specify the minor's Social
Security number.
o CORPORATIONS, PARTNERSHIPS, ESTATES, OTHER ENTITIES OR TRUST ACCOUNTS Specify
the Taxpayer Identification Number of the legal entity or organization that
will report income and/or gains resulting from your investments in the fund.
*In ADDITION to the above, Joint accounts must ALSO specify the Social Security
number of the second named owner here.
[-----] [-----] [-----] [-----] [-----] [-----] [-----] [-----] [-----]
4. INVESTMENT METHOD (MINIMUM INVESTMENT: $1,000)
[ ] CHECK
Enclosed is a check payable to Morgan Keegan. (Neither initial nor subsequent
investments should be made by third party check.)
FOR $___________________________________________________________________________
Amount
5. DIVIDEND AND CAPITAL GAIN DISTRIBUTION OPTIONS CHECK ONE ONLY. IF YOU DO NOT
CHECK ONE OF THE FOLLOWING OPTIONS, ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
WILL BE REINVESTED.
___ Reinvest all dividends and capital gain distributions.
___ Pay all dividends and capital gain distributions by check.
___ Pay all dividends by check and reinvest all capital gain distributions.
6. SYSTEMATIC INVESTMENT PLAN (SIP)
PERMITS YOU TO PURCHASE SHARES AUTOMATICALLY ON A REGULAR BASIS BY
ELECTRONICALLY TRANSFERRING A SPECIFIED DOLLAR AMOUNT FROM YOUR BANK ACCOUNT TO
YOUR MORGAN KEEGAN FUNDS' MUTUAL FUND ACCOUNT.
___ Yes, I (we) want the Morgan Keegan Funds Systematic Investment Plan (SIP)
You must attach a voided check to this Application. Money will be transferred
only from the bank account indicated on the voided check.
<PAGE>
Check the day of the month most convenient for you to have your bank account
debited. You can invest once or twice a month ($250 minimum investment(s)).
___ 1st ___ 15th ___ both dates
Amount you would like to invest each time: $______________
<TABLE>
<CAPTION>
<S> <C> <C>
7. TELEPHONE PRIVILEGES
TELEPHONE REDEMPTION permits redemption proceeds paid by check, payable to your
account's registration and mailed to your account's address.
TELEPHONE EXCHANGE permits exchanges by telephone among Morgan Keegan Funds with
the same registration.
Please check one: I (we) do ___, do not ____ want the TELEPHONE REDEMPTION privilege.
Please check one: I (we) do ___, do not ____ want the TELEPHONE EXCHANGE privilege.
8. OPTIONAL INFORMATION (we are required by the National Association of
Securities Dealers, Inc. to request this information).
________________________________________________________________________________
Owner's occupation Owner's date of birth
________________________________________________________________________________
Owner's employer's name
________________________________________________________________________________
Owner's employer's address
________________________________________________________________________________
Joint owner's occupation Joint owner's date of birth
________________________________________________________________________________
Joint owner's employer's name
________________________________________________________________________________
Joint owner's employer's address
</TABLE>
<PAGE>
9. SIGNATURE By signing below, you certify and agree that:
You have received a current Fund Prospectus and agree to its terms. It is your
responsibility to read the Prospectus of any Fund into which you may exchange.
You have full authority and are of legal age to buy and redeem shares
(custodians certify they are duly authorized to act on behalf of the investors).
The Fund's Transfer Agent, Morgan Keegan, Morgan Keegan Select Fund, Inc.,
Morgan Keegan Southern Capital Fund, Inc., Morgan Asset Management, Inc., any
affiliate and/or any of their directors, trustees, employees and agents will not
be liable for any claims, losses or expenses (including legal fees) for acting
on any instructions or inquiries reasonably believed to be genuine.
You understand that mutual fund shares are not deposits or obligations of, or
guaranteed by, any bank, the U.S. Government or its Agencies, and are not
federally insured by the Federal Deposit Insurance Corporation, The Federal
Reserve Board or any other Agency.
The net asset value of funds of this type will fluctuate from time to time.
Taxpayer Identification Number Certification
The IRS requires all taxpayers to write their Social Security number or other
Taxpayer Identification Number in Section 4 of this Application and sign this
Certification. Failure by a non-exempt taxpayer to give us the correct Social
Security number or Taxpayer Identification Number will result in the withholding
of 31% of all taxable dividends and other distributions paid to your account and
proceeds from redemptions of your shares (referred to as "backup withholding").
Understanding penalties of perjury, you certify that:
(1) The Social Security Number or other Taxpayer Identification Number on this
Application is correct: and (2) you are not subject to backup withholding
because (a) you are exempt from backup withholding; (b) you have not been
notified by the Internal Revenue Service that you are subject to backup
withholding; or (c) the IRS has notified you that you are no longer subject to
backup withholding.
Cross out item 2 above if it does not apply to you.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
PLEASE SIGN HERE:
X_______________________________________________________________________________
OWNER OR CUSTODIAN
X_______________________________________________________________________________
JOINT OWNER (IF ANY), CORPORATE OFFICER, PARTNER, TRUSTEE, ETC.
Date____________________ Title_______________________________
<PAGE>
Mailing Instructions
Please mail the application to:
Your Morgan Keegan broker.
Or
Morgan Keegan Southern Capital Fund, Inc.
50 North Front Street
Memphis, TN 38103
THIS APPLICATION MUST BE FILED WITH THE TRANSFER AGENT BEFORE ANY REDEMPTION
REQUEST CAN BE HONORED.
YOU WILL RECEIVE A CONFIRMATION SHOWING YOUR FUND ACCOUNT NUMBER, DOLLAR AMOUNT
RECEIVED, SHARES PURCHASED AND PRICE PAID PER SHARE.
Please do not complete
Account Number _____________________________ Rep Number_________________
18
<PAGE>
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<PAGE>
FOR ADDITIONAL INFORMATION
A Statement of Additional Information ("SAI"), dated November 1, 1999,
containing further information about the fund has been filed with the Securities
and Exchange Commission ("SEC") and, as amended or supplemented from time to
time, is incorporated by reference in this prospectus.
Additional information about the fund's investments is available in the fund's
annual and semi-annual reports to shareholders. In the fund's annual report you
will find a discussion of the market conditions and investment strategies that
significantly affected the fund's performance during the last fiscal year.
Free copies of the annual and semi-annual reports and SAI may be obtained:
o from your Morgan Keegan investment broker;
o by calling Morgan Keegan at 800-366-7426;
o by writing to Morgan Keegan at the address noted below; or
o by accessing the Web site maintained by the SEC (http://www.sec.gov).
Information about the fund (including shareholder reports and the SAI) also can
be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
(call 800-SEC-0330 for further information), or may be obtained upon payment of
a duplicating fee by writing the Public Reference Section of the SEC,
Washington, D.C. 20549-6009. All shareholder inquiries can be made by contacting
Morgan Keegan at the address listed below:
Morgan Keegan & Company, Inc.
50 North Front Street
Memphis, TN 38103
Investment Company Act File No. 811-4658.
19