MUHLENKAMP FUND
12300 Perry Highway
Wexford, PA 15090
Dear Shareholder:
You are cordially invited to attend the Special meeting of
the Shareholders of the Muhlenkamp Fund (A Series of the
Wexford Trust), which will be held on May 28, 1998 at 10:00
A.M., Eastern Standard Time, at The Chadwick in Ballroom C, 1
Wexford Square, Wexford, PA, 15090.
The matters to be acted upon at the meeting:
(1) Election of Trustees;
(2) One proposed change to your Fund's fundamental investment
restriction permitting it to purchase or sell options on
securities, which would not alter your Fund's investment
objectives;
(3) Any other business properly brought before the meeting.
Although we would like very much to have each shareholder
attend the special meeting, we realize this is not possible.
Whether or not you plan to be present at the meeting, we need
your vote. We urge you to complete, sign and return the
enclosed proxy card promptly. A postage-paid envelope is
enclosed for this purpose.
If you return your proxy promptly, you can help your Fund
avoid the expense of follow-up mailings to achieve a quorum
so that the meeting can be held. If you decide between now
and the meeting date that you can attend the meeting in
person, you can revoke your proxy at that time and vote your
shares at the meeting.
If your shares are held in street name, only your bank or
broker can vote your shares, and only upon receipt of your
specific instructions. Please contact the person responsible
for your account and instruct him or her to execute the proxy
card today.
We look forward to seeing you at the meeting or receiving
your proxy so that your shares may be voted at the meeting.
Sincerely yours,
Ronald H. Muhlenkamp, President
April 15, 1998
MUHLENKAMP FUND
12300 Perry Highway
Wexford, PA 15090
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on May 28, 1998.
Notice is hereby given that a joint special meeting (the
"Meeting") of shareholders of the Muhlenkamp Fund (A Series
of the Wexford Trust) will be held on May 28 at 10:00 a.m.
Eastern Time at The Chadwick in Ballroom C, 1 Wexford Square,
Wexford, PA, 15090, for the following purposes:
1. To elect Trustees, as described in part I of the
attached Proxy statement (p 1).
2. To approve one proposed change to the Fund's fundamental
investment restriction permitting it to purchase or sell
options on securities, which would not alter the Fund's
investment objectives.
3. To transact any other business which may properly come
before the Meeting or any adjournments thereof.
The close of business March 6, 1998 has been fixed as the
record date for the determination of shareholders of the
Muhlenkamp Fund (A Series of the Wexford Trust) entitled to
notice of and to vote at the Meeting or any adjournments
thereof.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND IN PERSON ARE URGED
TO SIGN WITHOUT DELAY AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED POSTAGE PAID ENVELOPE SO THAT THEIR SHARES MAY BE
REPRESENTED AT THE MEETING. YOUR PROMPT ATTENTION TO THE
ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF FURTHER
SOLICITATION.
By order of the Board of Trustees.
Jean A. Leister
Secretary
April 15, 1998
Muhlenkamp Fund-A Series of the Wexford Trust
12300 Perry Highway
Wexford, PA 15090
PROXY STATEMENT
The enclosed proxy is solicited by the Trustees of Muhlenkamp
Fund (the "Fund") for use at the 1998 Special Meeting of
Shareholders to be held on May 28, 1998, and at any
adjournments thereof, for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders.
Shareholders of record at the close of business on March 6,
1998, are entitled to be present and to vote at the meeting
or any adjourned session thereof. The Notice of Meeting,
Proxy and the Proxy Statement have been mailed to such
shareholders of record on or about April 15, 1998.
A copy of the Annual Report of the Fund for its most recent
fiscal year, including financial statements, and a Prospectus
dated 3/1/98 accompanies this Proxy Statement. A
representative of Deloitte & Touche LLP, Auditors of the
Fund, is expected to be present at the meeting with the
opportunity to make statements and to respond to appropriate
questions.
Each full share of beneficial interest is entitled to one
vote. Shares represented by duly executed proxies will be
voted for the election of the persons named herein as
Trustees, unless such authority has been withheld. With
respect to the other matters specified in the proxy, shares
will be voted in accordance with the instructions made. If
no instructions are made, the proxy will be voted for the
matter specified in the proxy. Proxies may be revoked at any
time before they are voted by a written revocation received
by the Secretary of the Fund, by properly executing a later-
dated proxy or by attending the meeting and voting in person.
1. ELECTION OF TRUSTEES
The nominees named below are proposed to fill vacancies in
the board of trustees. Their names, ages, and description of
their principal occupation are set forth in the table below.
Ronald H. Muhlenkamp is currently a Trustee of the Fund and
was elected by the shareholders of the Fund on November 18,
1988. The nominees have never served as Trustees of the
Fund. Mr. Belle and Mr. Rice are retiring from the board
after nine years service.
The term of office of each person elected as Trustee will be
until the next meeting held for the purpose of electing
Trustees or until his or her successor is elected and
qualified. Each of the nominees has agreed to serve as a
Trustee if elected. If any of the nominees should be
unavailable for election at the time of the meeting, the
persons named as proxies will vote unmarked proxies and those
marked for the unavailable Trustee for such other nominee as
the present Trustees may recommend.
NOMINEES & PRINCIPAL
CURRENT OCCUPATION
TRUSTEES AGE FOR THE LAST BUSINESS EXPERIENCE
FIVE YEARS
Alfred E. 61 Management 1959 Bachelor of Science,
Kraft, Consultant, Civil Engineering,
(Nominee) to Pennsylvania State
manufacturin University
g, 1969 Masters of Business
distribution Administration, Harvard
, and 1959 Design Engineer,
service Koppers Company, Inc.
businesses 1961 Chief Engineer, Radio
with Construction Company
industrial 1969 Assistant to the
or President, Presidential
commercial Homes, Inc.
product 1971 Financial Manager,
lines. Westinghouse Electric
Corp.
202 Fan 1974 Manufacturing
Hollow Rd Manager, Ringsdorff
Uniontown, Corporation
PA 15401 1977, General Manager,
Pittsburgh Sheet Metal,
Inc.
1979 President Malsbary
Manufacturing Company
1990 Assistant Professor
of Business
Administration,
Pennsylvania State
University
1986 - Present, Management
Consultant
Terrence 50 President, 1969 Bachelor of Science
McElligott West Penn Degree in Journalism,
(Nominee) Brush & Ohio University
Supply, Inc. 1971 Master of Arts in
4103 Penn teaching, University of
Ave Pittsburgh
Pittsburgh, 1971 Teacher, National
PA 15224 Teachers Corps.
1973 Director of
Education, Community Human
Services Corporation
1976Executive Director,
Alpha House
1979 President, West Penn
Brush & Supply, Inc.
* Ronald H. 54 President, 1966, Bachelor of Science
Muhlenkamp Muhlenkamp & Degree in Engineering from
(Present Company M.I.T.
Trustee) 12300 Perry 1968, Masters in Business
Highway Administration from the
Wexford, PA Harvard Business School
15090
Chartered Financial
Analyst.
1968, Fundamental
portfolio analyst, Berkley
Dean & Co.
1970, portfolio analyst at
Integon Corporation,
1975, Senior Portfolio
Manager by C.S. McKee and
Company
1977, founded Muhlenkamp
and Company.
* Indicates an interested trustee as defined under the 1940
Act, Section 2(A)(19). Ron Muhlenkamp serves as a principal
officer and investment professional of Muhlenkamp & Company
Inc., the investment advisor, over the past five years.
The following persons served as principal officers of the
Fund over the last five years. Their mailing address is
Muhlenkamp Fund, P.O. Box 598, Wexford, PA 15090.
OFFICERS OF THE OFFICE AGE BUSINESS
MUHLENKAMP FUND EXPERIENCE
* Ronald H. President 54 Founder &
Muhlenkamp President
Muhlenkamp &
Company
John H. Kunkle Treasurer 35 1985 Bachelor
of Arts in
Economics,
Denison
University
1985 Branch
Manager, Dollar
Bank
1991 Masters of
Business
Administration
from University
of Pittsburgh
1992, Analyst,
Muhlenkamp &
Company
Jean A. Leister Secretary 51 1964 Office
Manager, Body-
Borneman
Insurance
1967 Secretary,
Pennsylvania
State
University
1986 Executive
Secretary, U.S.
Administrators
1986 Manager /
Administrative
Assistant,
Muhlenkamp &
Company
None of the Trustees of the Fund receive any fees associated
with their duties.
During fiscal 1997 the board of the trustees of The Fund met
three times and all of the trustees were present at the
meetings.
The fund has no standing audit, compensation or nomination
committees.
FUND SHARES OWNED BY TRUSTEES AND OFFICERS
The total amount of Fund shares beneficially owned by each
Trustee as of December 31, 1997 and the year in which each
individual became a trustee appears below.
NAME YEAR FIRST BOARD STATUS OWNERSHIP OF
ELECTED AS SHARES OF THE
TRUSTEE FUND AS OF
12/31/97
Edgar C. Belle 1988 Retiring 0
Alfred E. Kraft N/A Nominee 1,813.435
Terrence N/A Nominee 14,302.275
McElligott
Ronald H. 1988 Active 18,514.020 *
Muhlenkamp
1988 Retiring 0
Richard R. Rice
*Includes 11,505.290 shares held in the Muhlenkamp & Company
Pension Plan.
THE MANAGEMENT CONTRACT
The Fund retains Muhlenkamp & Company, Inc. a Pennsylvania
corporation principally owned by Ronald H. Muhlenkamp, as
investment advisor under an annual contract. Muhlenkamp &
Company, located at 12300 Perry Hwy., Wexford, Pennsylvania,
15090, and the Fund share facilities, space and staff with
each other. As of the date of this proxy, Muhlenkamp &
Company, Inc. is under contract to provide investment
management and advice to individual and institutional
clients, in addition to the Fund.
The advisor is registered with the Securities and Exchange
Commission under the Investment Advisors Act of 1940.
Accordingly, the advisor files periodic reports, which are
available for public inspection. Mr. Ronald H. Muhlenkamp is
the principal officer and investment professional at
Muhlenkamp & Company, Inc. and the Fund. The advisor
receives a fee from the Fund equal to 1% per annum of the
average daily market value of its net assets.
Under terms of the advisory agreement, total Fund expenses
cannot under any circumstances exceed 2% of the Fund's net
assets. Should actual expenses incurred ever exceed the 2%
limitation, the advisor shall pay such excess expenses.
Should the net assets of the Fund exceed $100 Million, total
Fund expenses on the assets over $100 Million shall be
limited to 1.5%. The advisor shall pay any excess expenses.
The management contract dated July 6, 1988 was approved by
the shareholders on that date and was last approved by the
Trustees on November 21, 1997.
Management fee paid to Muhlenkamp & Company for the one year
period ended 12/31/97: $810,448
2. CHANGE TO COMPANY'S INVESTMENT RESTRICTIONS
The Trustees are recommending that the shareholders approve a
change to the Fund's fundamental investment restrictions to
allow the Fund to purchase and sell put and call options on
stock or bonds.
The Fund's present Investment Policy states that the Fund's
investments will normally consist of a diversified list of
common stocks. The Fund may also invest in fixed-income or
debt securities from time to time. The change would revise
the policy to allow the Fund to purchase and sell put and
call options on stocks or bonds. We are recommending the
change because the premiums offered on some option contracts
are attractive relative to interest rates on bonds and other
investments.
GENERAL DISCUSSION OF OPTIONS
THE RISKS ASSOCIATED WITH PURCHASING AND WRITING CALL AND PUT
OPTIONS
If approved, the following would be added to the registration
statement of the Fund:
Options Transactions
The Fund may purchase and write (i.e., sell) put and
call options on any security in which it may invest or
options on any securities index. These options are
traded on U.S. exchanges or in the over-the-counter
market to hedge its portfolio and to enhance the Funds
return. The fund may write covered put and call options
to generate additional income through the receipt of
premiums and purchase call options in an effort to
protect against an increase in the price of securities
it intends to purchase. The Fund may also purchase put
and call options to offset previously written put and
call options of the same series.
A call option gives the purchaser, in exchange for a
premium paid, the right for a specified period of time
to purchase the securities or securities in the index
subject to the option at a specified price (the exercise
or strike price). The writer of a call option, in
return for the premium, has the obligation, upon
exercise of the option, to deliver, depending upon the
terms of the option contract, the underlying securities
or a specified amount of cash to the purchaser upon
receipt of the exercise price. When the Fund writes a
call option, it gives up the potential for gain on the
underlying securities or in excess of the price of the
option during the period that the option is open.
A put option gives the purchaser, in return for a
premium, the right, for a specified period of time, to
sell the securities subject to the option to the writer
of the put at the specified exercise price. The writer
of the put option, in return for the premium, has the
obligation, upon exercise of the option, to acquire the
securities underlying the option at the exercise price.
The Fund might, therefore, be obligated to purchase the
underlying securities for more than their current market
price.
The Fund will write only "covered" options. A written
option is covered if, as long as the Fund is obligated
under the option, it (i) owns an offsetting position in
the underlying security or (ii) maintains in a
segregated account, cash or other liquid assets in an
amount equal to or greater than its obligation under the
option. Under the first circumstance, the Fund's losses
are limited because it owns the underlying security;
under the second circumstance, in the case of a written
call option, the Fund's losses are potentially
unlimited. There is no limitation on the amount of call
options the Fund may write.
The Fund may also write a call option, which can serve
as a limited short hedge because decreases in value of
the hedge investment would be offset to the extent of
the premium received for writing the option. However,
if the security appreciates to a price higher than the
exercise price of the call option, it can be expected
that the call will be exercised and the Fund will be
obligated to sell the security at less than its market
value.
The Fund may purchase and sell put and call options on
securities indices. Securities index options are
designed to reflect price fluctuations in a group of
securities or segment of the securities market rather
than price fluctuations in a single security. Options
on securities indices are similar to options on
securities, except that the exercise of securities index
options requires cash payments and does not involve the
actual purchase or sale of securities. When purchasing
or selling securities index options, the Fund is subject
to the risk that the value of its portfolio securities
may not change as much as or more than the index because
the Fund's investments generally will not match the
composition of the index.
At this time the Fund does not intend to invest (i.e.,
purchase & sell call and put options) more than 5% of
its net assets in options.
Risks of Hedging and Return Enhancement Strategies
Participating in the options markets involves investment
risks and transaction costs to which the Fund would not
be subject absent the use of these strategies. The
Fund, and thus its investors, may lose money through any
unsuccessful use of these strategies. Risks inherent to
the use of options include (1) imperfect correlation
between the price of the option and movement in the
price of the securities being hedged; (2) the fact that
skills needed to use these strategies are different from
those needed to select portfolio securities; (3) the
possible absence of a liquid secondary market for any
particular instrument at any time; (4) the possible need
to defer closing out certain hedged positions to avoid
adverse tax consequences; and (5) the possible inability
of the Fund to purchase or sell a portfolio security at
a time that otherwise would be favorable for it to do
so, or the possible need for the Fund to sell a
portfolio security at a disadvantageous time, due to the
need for the Fund to maintain "cover" or to segregate
securities in connection with hedging transactions.
The Fund will generally purchase options on an exchange
only if it appears to be a liquid secondary market for
such options or futures; the Fund will generally
purchase OTC options only if the investment advisor
believes that the other party to options will continue
to make a market for such options. However, there can
be no assurance that a liquid secondary market will
continue to exist or that the other party will continue
to make a market. Thus, it may not be possible to close
an option transaction. The inability to close option
positions also could have an adverse impact on the
Fund's ability to effectively hedge its portfolio.
There is also the risk of loss by the Fund of margin
deposits or collateral in the event of bankruptcy of a
broker with whom the Fund has an open position in an
option.
The Fund's Investment Restrictions states that the Fund will
not "...invest in options, futures, commodities or in
commodity contracts, restricted securities, mortgages, oil,
gas, mineral or other exploration or development programs."
The proposed amendment would delete the word "options" from
this restriction.
3. FUND INFORMATION
THE FUND
MUHLENKAMP FUND ("The Fund"), a Series of the Wexford Trust
(The Registrant), is a diversified open-end mutual fund that
continuously offers its shares for sale to the public. The
Fund will manage its assets to seek to maximize total returns
to its shareholders, primarily by acquiring and holding a
diversified list of common stocks. The Fund may also acquire
and hold fixed-income or debt investments as market
conditions warrant and when, in the opinion of its advisor,
it is deemed desirable or necessary in order to attempt to
achieve its investment objectives. (For further information,
please refer to "Investment Objectives and Policies" section
in the enclosed Prospectus).
CAPITAL OF TRUST
Fund capital consists of an unlimited number of shares of
beneficial interest having a par value of $.001 each. When
issued, each share or fraction thereof is fully paid, non-
assessable, transferable and redeemable. All shares are of
the same class, and each full share has one vote. The Fund
is presently the only fund of the Wexford Trust, as a
Massachusetts Business Trust. As part of a trust, each fund
would have its own Board of Trustees which supervise fund
activities and review contractual arrangements. Fractional
shares are issued to three decimal places, but do not carry
voting rights. As a trust, there is no requirement to hold
annual shareholder meetings. However, it is intended that
special meetings, which may be called upon the request of the
owners of 10% of shares outstanding, will be held as needed
or required when and as duly called. Approval of a majority
of the shares outstanding must first be obtained before
changing fundamental policies: to amend the contract with its
investment advisor, to terminate the Fund, or to change any
other items on which shareholders are granted such rights by
law or under provisions of its Declaration of Trust. A
majority of Trustees must have been voted into office by
shareholders even though Trustees may fill vacancies without
a shareholder vote so long as such appointments do not
produce a majority of Trustees holding office. The Fund
offers its own shares exclusively.
BROKER ALLOCATIONS
The placement of orders for the purchase and sale of
portfolio securities are made under the control of the
President of the Fund, subject to the overall supervision of
the Board of Trustees. All orders are placed at the best
price and best execution obtainable, except that the Fund
shall be permitted to select broker-dealers who provide
economic, corporate and investment research services, if in
the opinion of the Fund's management and Board of Trustees,
such placement serves the best interest of the Fund and its
shareholders.
PORTFOLIO TRANSACTIONS
The policy of the Fund is to limit portfolio turnover to
transactions necessary to carry out its investment policies
and/or to obtain cash, as necessary, for redemption of its
shares. The Fund's portfolio turnover rate, which is the
lesser of the total purchases or sales on an annualized
basis, divided by the average total market value of the
assets held, will vary from period to period depending upon
market conditions. The Fund has had an average turnover rate
of 24% over the last seven years. It is anticipated the Fund
will generally not exceed a turnover rate of 100% per year in
normal market conditions. High portfolio turnover incurs
additional brokerage costs and creates portfolio gains or
losses, which affect shareholder return rates and taxes.
Refer to sections herein entitled "Broker Allocations" for
more information on these subjects.
FUND INFORMATION
Assets of the Fund and Shares Outstanding:
Net Assets as of December 31, 1997: $125,460,638
Shares outstanding and authorized to vote on March 6, 1998:
3,979,925.
No Person beneficially owns more than 5% of the Fund's shares
as of March 6, 1998.
4. MISCELLANEOUS
QUORUM AND METHODS OF TABULATION
Fifty percent of the shares entitled to vote, present in
person or represented by proxy, constitute a quorum for the
transaction of business with respect to such proposals at the
Meeting. Persons appointed by the Trust, as tellers for the
meeting, will count votes cast by proxy or in person at the
meeting.
The two nominees for election as Trustees at the Meeting who
receive a plurality of the shares voting for the election for
Trustees shall be elected Trustees.
The fundamental investment restriction change requires the
affirmative vote of a majority of the shares entitled to
vote. Under the investment company act a majority of the
outstanding shares means the vote of: (A) 67 percentum or
more of the voting securities present at the meeting, if the
holders of more than 50% of the outstanding voting securities
of such the company are present or represented by proxy: or
(B) of more than 50% of the outstanding voting securities of
the Fund, whichever is less.
OTHER BUSINESS
The trustees know of no other business to be brought before
the meeting. However, if any other matters properly come
before the meeting, it is their intention that proxies that
do not contain specific restrictions to the contrary will be
voted on such matters in accordance to the judgements of the
persons named as proxies in the enclosed form of proxy.
SOLICITATION OF PROXIES
In addition to the solicitation of proxies by mail, Trustees
of the Fund and employees of Muhlenkamp & Company, Inc. may
solicit proxies in person or by telephone. The Fund pays the
costs of any such solicitation.
ADJOURNMENT
If sufficient votes in favor of any of the proposals set
forth in the Notice of the Meeting are not received by the
time scheduled for the meeting, the persons named as proxies
may propose one or more adjournments of the meeting for a
period or periods of not more than 60 days in the aggregate
to permit further solicitation of proxies with respect to any
of such proposals. Any adjournment will require the
affirmative vote of the majority of the votes cast on the
question in person or by proxy at the session of the meeting
to be adjourned. The persons named as proxies will vote in
favor of such adjournment those proxies required to be voted
against any of such proposals. The Fund pays the costs of
any such solicitation and of any adjourned session.
