Filed with the Securities and Exchange Commission on March 1, 2000
1933 Act Registration File No. 33-20158
1940 Act File No. 811-5469
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
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Post-Effective Amendment No. 21 |X|
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 21 |X|
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WEXFORD TRUST
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(Exact Name of Registrant as Specified in Charter)
12300 Perry Highway
Wexford, PA 15090-8379
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code:
(724) 935-5520 or (800) 860-3863
Ronald H. Muhlenkamp
12300 Perry Highway
Wexford, PA 15090-8379
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practical after the
effective date of this Registration Statement.
It is proposed that this filing will become effective
X immediately upon filing pursuant to paragraph (b)
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on ____________________ pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on ____________ pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on ___________________ pursuant to paragraph (a)(2) of Rule 485.
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If appropriate, check the following box:
____ This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Muhlenkamp Fund
Intelligent Investment Management
P R O S P E C T U S
March 1,200O
Phone: (800) 860-3863
E-mail: [email protected]
Web Site: www.muhlenkamp.com
INVESTMENT OBJECTIVE:
Maximize total return to shareholders through capital
appreciation, and income from dividends and interest, consistent with reasonable
risk.
As with all mutual funds, the Securities and Exchange Commission does not
approve or disapprove these securities, or pass upon the accuracy or adequacy of
the content of this prospectus. Any representation to the contrary is a criminal
offense.
Contents
Fund Basics............................................................2
Past Performance.......................................................4
Fund Expenses..........................................................5
Management.............................................................6
Shareholder Information................................................7
Shareholder Services and Communications................................12
Distributions and Taxes................................................13
Financial Highlights...................................................14
Account Application....................................................Center
FUND BASICS
INVESTMENT OBJECTIVE & PRINCIPAL STRATEGIESThe Fund seeks to maximize total
return to its shareholders through capital appreciation, and income from
dividends and interest, consistent with reasonable risk. To pursue this goal,
the Fund principally invests in a diversified list of common stocks.
The Fund invests primarily in companies determined by the Fund's advisor to be
highly profitable, yet undervalued. The advisor looks for those companies it
believes to have above average profitability, as measured by corporate return on
equity (ROE), that sell at below average prices as measured by price to earnings
ratios (P/E). Company size, based on market capitalization, is of little
importance to the advisor.
The Fund does not subscribe to the philosophy that stocks can be acquired and
held forever; however, the advisor purchases stocks for the Fund that it intends
to hold at least three to five years. While short-term swings in the
market-place are not ignored, they are subordinate to the quest for long-term
values.
The Fund will sell a stock when the advisor believes the company's intrinsic
value has been fully realized by the market, earnings disappoint, growth
prospects dim due to changing market or economic conditions, or the company
falls short of the advisor's expectations.
The Fund may purchase fixed-income or debt securities from time to time as
substitutes for stocks when the Fund's advisor determines that market conditions
warrant their purchase.
Under adverse market conditions the Fund may take temporary defensive measures
such as holding cash reserves without limit. In taking such measures the Fund
may not achieve its investment objective.
The Fund intends to invest for the long-term, but may sell stocks and other
securities regardless of how long they have been held. Over the Fund's lifetime,
the average portfolio turnover has been less than 30% per year.
PRINCIPAL RISKS
Historically common stocks have outperformed other types of investments;
however, stock prices will fluctuate in the short-term. Like any investment, an
investment in the Fund is subject to risk. The value of your investment can go
up or down. This means that you could lose money. Stocks are selected by the
advisor based upon what the advisor believes to be their potential for long-term
growth; however, there can be no assurance that the objective will be met. The
Fund is subject to risks that affect common stocks in general, such as economic
conditions and adverse changes (generally increases) in interest rates.
Investments in value stocks are subject to the risk that the market may never
realize their value, or their prices may go down. Short-term volatility often
accompanies a long-term approach to investing. These and other factors could
adversely affect your investment.
The Fund's investment in bonds may be subject to risks that affect the bond
markets in general, such as general economic conditions and adverse changes
(generally increases) in interest rates.
FOR YOUR INFORMATION
An investment in this Fund is not a bank deposit. It is not FDIC insured or
government endorsed. It should be considered a "long-term" investment, an
investment for a period of three or more years.
PAST PERFORMANCE
The bar chart and table below provide an indication of the risk of investing in
the Fund. The bar chart shows the Fund's performance in each calendar year over
a ten-year period. The table shows how the Fund's average annual returns for
one, five, and ten calendar years compared with those of a broad-based
securities market index. All presentations below assume reinvestment of
dividends and distributions. Keep in mind that the Fund's past performance does
not indicate how it will perform in the future.
1990 -14.86%
1991 45.40%
1992 15.80%
1993 18.10%
1994 -7.20%
1995 32.90%
1996 29.96%
1997 33.28%
1998 3.22%
1999 11.40%
During the 10 year period shown in the bar chart, the highest return
for a quarter was 19.65% (quarter ending 06/30/99) and the lowest return for a
quarter was -25.37% (quarter ending 09/30/90).
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
As of 12/31/99 One Year Past 5 Years Past 10 Years
---------------------------- ------------------------ --------------------- ----------------------
<S> <C> <C> <C>
Muhlenkamp Fund 11.40% 21.51% 15.33%
---------------------------- ------------------------ --------------------- ----------------------
S&P 500* 21.04% 28.56% 18.21%
</TABLE>
(*)The S & P 500 is the Standard & Poor's Composite Index of 500 Stocks, a
widely recognized, unmanaged index of common stock prices.
FUND EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. In the table you will see the fees and
expenses you would incur if you bought and held shares of the Fund. Annual Fund
operating expenses are paid out of the Fund assets, so their effect is included
in the Fund's share price. Shareholder transaction fees are paid from your
account.
SHAREHOLDER FEES*
(EXPENSES THAT ARE DEDUCTED FROM YOUR ACCOUNT)
Sales Charge (Load) Imposed on Purchases NONE
Sales Charge (Load) Imposed on Reinvested Dividends NONE
Redemption Fees NONE
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Expenses 1.00%
12b-1 Distribution Fees NONE
Other Net Operating Expenses** 0.35%
Total Fund Expenses 1.35%
(*) Investors may be charged an annual account maintenance fee if their account
falls below the established minimums. Investors may be charged a fee by their
broker if they effect transactions through a broker or agent. There are certain
annual charges associated with retirement accounts offered by the Fund.
(**) Net of commission credits used to pay expenses.
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 of your shares at the end of those 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
$137 $428 $739 $1,624
MANAGEMENT The investment advisor for the Fund is Muhlenkamp & Co., Inc., 12300
Perry Highway, Wexford, Pennsylvania, 15090, a Pennsylvania corporation
principally owned by Ronald H. Muhlenkamp.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, such excess expenses shall be paid by
the advisor.
Muhlenkamp & Co., Inc. and its principal, Ronald H. Muhlenkamp, has served as
portfolio manager and/or investment advisor to corporations, individuals,
pension and profit-sharing plans and endowment funds since 1978. Mr. Muhlenkamp
has been active since 1968 in the field of investment research and/or portfolio
management, both privately and as an officer in charge of management of
corporate monies. As of the date of this Prospectus, Muhlenkamp & Co., 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 SEC under the Investment Advisors Act of 1940.
Mr. Muhlenkamp holds an engineering degree from Massachusetts Institute of
Technology, an MBA from Harvard Business School and he has earned the Financial
Analyst Federation's designation as a "Chartered Financial Analyst." Ron
Muhlenkamp's liquid assets and the entire Muhlenkamp & Company pension plan are
invested in the Muhlenkamp Fund.
Year 2000
Many computer systems used today may not be able to tell the Year 2000 from the
year 1900 because of the way dates are encoded. This could become a problem
during the year2000 and could affect securities trades, interest and dividend
payments, pricing and account services.
Muhlenkamp & Company, Inc., has not experienced a Year 2000 computer problem,
nor do we anticipate that there might be one. Although we can't guarantee that
this won't be a problem, the Fund's service providers have been working on
adapting their computer systems. They expect that their systems, and the systems
of their systems, and the systems of their service providers, are ready for the
new millennium. In addition. your investment in the Fund could be adversely
affected if a company that the Fund has invested in has, or is perceived to have
a Year 2000 problem.
SHAREHOLDER INFORMATION
PRICING POLICYYou pay no sales charges of any kind to invest in this Fund. Your
price for Fund shares is the Fund's net asset value (NAV) per share, which is
generally calculated as of the close of trading on the New York Stock Exchange
(usually 4:00 P.M. Eastern Time) every day the Exchange is open. Your order will
be priced at the next NAV calculated after your order is accepted by the Fund.
The Fund's investments are valued based on market price, or where market
quotations are not readily available, based upon fair value as determined in
good faith by the Fund's Board of Trustees.
PURCHASING SHARES
You may open an account with an initial investment of $1,500. If you choose to
participate in the Automatic Investment Program (AIP), the minimum initial
investment is $200. The AIP requires a minimum investment of $50 per month
automatically invested from your checking or savings account.
Once your account has been opened, you may make additional investments to your
account, subject to a $50 minimum. Subsequent investments can be made by check,
wire transfer, Electronic Funds Transfer (EFT), or AIP. All investments must be
made in U.S. dollars. Cash and third party checks cannot be accepted.
SELLING SHARES
You may sell all or some of your shares, by mail or telephone, on any day that
the Fund is open for business. Your shares will be sold at the next calculated
NAV after the Fund's transfer agent accepts your order. You will generally
receive the proceeds within a week. You may receive your payment by check, wire
transfer, or EFT (if previously enrolled in this program). The Fund reserves the
right to delay sending out redemption proceeds for up to seven days.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
The Fund offers IRAs to any employed individual and his or her spouse. These
include Traditional IRAs, Roth IRAs, SEP-IRAs, SIMPLE-IRAs, and Spousal IRAs.
Existing IRAs may be transferred or rolled over to a Muhlenkamp Fund IRA. Assets
held in a previous employer's qualified retirement plan may also be rolled over
into a Muhlenkamp Fund IRA. The forms and disclosures needed before investing
IRA money in Fund shares may be obtained by calling the Fund.
SYSTEMATIC WITHDRAWALSShareholders with accounts that have at least $5,000 may
direct that the Fund pay a systematic periodic withdrawal of any amount to any
designated payee. To take advantage of this service, you must make your request
in writing, and provide the signature(s) of the owner(s) exactly as the account
is registered. Requested withdrawals require that shares be redeemed each period
to raise money to make the payments. These redemptions may be a taxable event
for you. You may receive your periodic withdrawal by check or EFT, if enrolled
in this program.
TELEPHONE REQUESTS
The Fund will automatically establish a telephone redemption option on your
account, unless you instruct otherwise on your application, or in writing. The
Fund will not be responsible for any account losses due to telephone fraud, as
long as the Fund has taken reasonable steps to verify the redemption order. The
Fund may require, for example, that you provide your account number, name and
address exactly as registered on the account, and the primary Social Security or
Employer Identification Number as registered on the account.
To purchase shares via telephone, you must first enroll in the EFT program. Upon
receiving a telephone purchase request, the Fund will electronically transfer
the assets from your bank account.
A Note on Unusual Circumstances: The Fund reserves the right to revise or
terminate the telephone redemption privilege at any time, without notice. In
addition, the Fund can stop selling shares or postpone payment at times when the
New York Stock Exchange is closed or under any emergency circumstances as
determined by the U.S. Securities and Exchange Commission. If you experience
difficulty making a telephone redemption during periods of drastic economic or
market change, you can send us your request by regular or express mail. Follow
the instructions on selling or exchanging shares by mail in this section.
MINIMUM ACCOUNT BALANCE
By November 30th of each year, all accounts must have net investments (purchases
less redemptions) totaling $1,500 or more; an account value greater than $1,500,
or be enrolled in the Automatic Investment Program. Accounts that do no not meet
one of these three criterions will be charged a $15 fee. Such fees will be used
to lower Fund expenses. The Fund will check accounts and charge this fee
annually.
OPENING AN ACCOUNT
Decide how you will open your account: by mail/overnight delivery or
telephone/wire. Initial investment must bc at least $1,500. The minimum is $200
for those accounts participating in the Automatic Investment Plan (AIP).
<TABLE>
<CAPTION>
By Mail/Overnight Delivery. By Telephone/Wire.
<S> <C>
BY MAIL: Complete application and send it, along Call the Transfer Agent at 1-800-860-3863 to set
with a check made payable to MUHLENKAMP FUND, to: up your account and to receive an account number
MUHLENKAMP FUND Complete and mail application with new account
C/O FIRSTAR MUTUAL FUND SERVICES, LLC number to:
P.O. BOX 701
MILWAUKEE, WI
53201-0701
MUHLENKAMP FUND
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WI
53201-0701
OR
OVERNIGHT: Complete application and send it, along Provide your bank with funds and with the
with a check made payable to MUHLENKAMP FUND, to: following information:
MUHLENKAMP FUND FIRSTAR BANK, N.A.
C/O FIRSTAR MUTUAL FUND SERVICES, LLC ABA #075000022
615 EAST MICHIGAN STREET FOR CREDIT TO ACCOUNT #112-952-137
MILWAUKEE, WI FOR FURTHER CREDIT TO SHAREHOLDER ACCOUNT NUMBER
53202 YOUR NAME
MUHLENKAMP FUND
ATTN: MUTUAL FUND SERVICES
</TABLE>
ADDITIONAL INVESTMENTS
All additional purchases are subject to a $50 minimum.
<TABLE>
<CAPTION>
By Mail/Overnight Delivery By Telephone/Electronic Funds By Automatic Investment Program (AIP)
Transfer (EFT) or Wire
<S> <C> <C>
BY MAIL: Send check make payable to You may add to an account by calling The automatic investment program
MUHLENKAMP FUND, along with the fund at 1-800-860-3863. requires purchases of at least $50
YOUR NUMBER monthly. Fill out the application,
ACCOUNT NUMBER designating the automatic investment
to: option and provide your bank
information.
MUHLENKAMP FUND BY EFT: Investments can be
C/O FIRSTAR MUTUAL FUND SERVICES, LLC automatically transferred from your
P.O. BOX 701 bank account, if you've previously
MILWAUKEE, WI enrolled in the EFT Program.
53201-0701
OR OR The Fund automatically deducts
payments from your bank account on a
regular basis
OVERNIGHT: Same as above, but use the BY WIRE: Provide your bank with funds
street address: and the following information:
MUHLENKAMP FUND FIRSTAR BANK, N.A.
C/O FIRSTAR MUTUAL FUND SERVICES, LLC ABA #075000022
615 EAST MICHIGAN STREET FOR CREDIT TO ACCOUNT #112-952-137
MILWAUKEE, WI FOR FURTHER CREDIT TO SHAREHOLDER
53202 ACCOUNT NUMBER
YOUR NAME
MUHLENKAMP FUND
ATTN: MUTUAL FUND SERVICES
</TABLE>
Investment slips are provided at the bottom of your statement. Make sure to
write your account number on your check.
SELLING SHARES
<TABLE>
<CAPTION>
How would you like to redeem your shares?
<S> <C> <C>
By Mail/Overnight Delivery. By Telephone. By Systematic Withdrawal.
BY MAIL: Write to the Fund in care of You may redeem shares by calling the If your account has at least $5,000,
the transfer agent. Include the names Fund at 1-800-860-3863. Proceeds of you may direct the fund to pay
of all the account holders, account the redemption will be mailed to your systematic periodic withdrawals.
numbers, social security or Tax ID address of record Proceeds will be sent by check each
Numbers, and signature of all account period.
holders.
MUHLENKAMP FUND OR OR
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WI
53201-0701
Proceeds can be electronically Proceeds of your systematic
transferred to your bank account, if withdrawals can be electronically
you have previously enrolled in the transferred to your bank account by
EFT program. enrolling in the Electronic Funds
Transfer (EFT) program.
OR OR
OVERNIGHT: Same instructions as above, Proceeds can be sent by Federal Wire
bust use the street address: to your bank account if you have
previously enrolled for the Federal
Wire options. ($12.00 charge for
each wire transfer).
MUHLENKAMP FUND
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
615 EAST MICHIGAN STREET
MILWAUKEE, WI
53202
</TABLE>
SHAREHOLDER SERVICES AND COMMUNICATIONS
CUSTOMER SERVICE L-800-860-3863Call this number to perform certain account
transactions (change your address, purchase/sell shares, etc.), obtain account
information and request Fund literature. Representatives are available during
the day to receive orders and answer questions regarding your account and the
Muhlenkamp Fund in general.
AUTOMATED TELEPHONE SERVICE 1-800-860-3863
The Fund's automated telephone system offers 24-hour access to account
information, including balances and last transactions. The daily NAV per share
of the Fund is also posted on the system each business day by 6 P.M. EST.
STATEMENTS
Each time there is activity in your account, i.e., a purchase or sale, the Fund
will mail you a confirmation reflecting the transaction and your new share
balance. All shareholders receive quarterly statements reflecting the market
value of their account(s) at the end of the period and any dividend
distributions during the period.
FINANCIAL REPORTS
Shareholders receive Semi-Annual and Annual Reports detailing the Fund's
portfolio holdings and financial statements, as of June 30, and December 3 1,
respectively, of each year. In an effort to keep Fund expenses to a minimum, the
Fund will mail only one report per household. If your household has numerous
account holders and you would like a report for each, please contact customer
service at l-800-860-3863.
QUARTERLY NEWSLETTER
Shareholders receive a copy of THE MUHLENKAMP MEMORANDUM each quarter. This
newsletter provides commentary on the previous quarter and explains the
advisor's outlook for the future. Other issues relating to the advisor's
investment philosophy are also discussed.
WEBSITE www.muhlenkamu.com
The Fund's prospectus, applications, financial reports, current market
commentary and back-issues of THE MUHLENKAMP MEMORANDUM are available.
DISTRIBUTIONS AND TAXES
The Fund pays dividends annually to shareholders, generally in December, from
net investment income and any net capital gains that it has realized during the
year. For your convenience, dividends and capital gains are automatically
reinvested in the Fund, unless you instruct the Fund otherwise. Please refer to
the Financial Highlights section of this Prospectus for a history of the
dividend distribution. Please note that the Fund has paid only three capital
gain distributions in its history, totaling $1.17 per share, making it very tax
efficient.
For federal tax purposes, the Fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions are
taxed as long-term capital gains. Your distributions may also be subject to
state income tax. The distributions are taxable when they are paid, whether you
take them in cash or participate in the dividend reinvestment program. Each
January, the Fund mails you a form indicating the federal tax status of your
dividend and capital gain distributions.
All shareholders must provide the Fund with a correct taxpayer identification
number (generally your Social Security Number) and certify that you are not
subject to backup withholding. If you fail to do so, the IRS can require the
Fund to withhold 31% of your taxable distributions and redemptions. Federal law
also requires the Fund to withhold 30% of the applicable tax treaty rate from
dividends paid to certain non-resident aliens, non-US partnership and non-U.S.
corporation shareholder accounts. Please see the statement of additional
information and your own tax advisor for further information.
THE TAXPAYER RELIEF ACT OF 1997
This Act made certain changes to capital gains tax rates. Under the law,
taxpayers in all brackets will have an advantage when it comes to capital gains
tax rates. The Fund will provide information relating to the portion of any Fund
distribution that is eligible for the reduced capital gains tax rate.
FINANCIAL HIGHLIGHTS
The following table shows certain financial information for the Fund. The
selected per share data and ratio table comes from the Fund's financial
statements, which have been audited by Deloitte & Touche LLP, independent
auditors. The audited financial statements and auditor reports may be found in
the Fund's most recent annual report which is available upon request.
<TABLE>
<CAPTION>
SELECTED PER SHARE DATA AND RATIOS FOR THE YEARS ENDED DECEMBER 31, 1999-1995
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
NET ASSET VALUE, Beginning of Year $37.65 $36.55 $27.52 $21.26 $16.23
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (or loss) ($0.11) $0.08 $0.18 $0.14 $0.21
Net gains or (losses) on securities $4.37 $1.10 $8.98 $6.23 $5.14
----- ----- ----- ----- -----
Total From Investment Operations $4.26 $1.18 $9.16 $6.37 $5.35
LESS DISTRIBUTIONS:
Dividends (from investment income) ($0.00) ($0.08) ($0.13) ($0.11) ($0.21)
Distributions (from capital gains) ($0.80) $0.00 $0.00 $0.00 ($0.11)
------- ----- ----- ----- -------
Total Distributions ($0.80) ($0.08) ($0.13) ($0.11) ($0.32)
NET ASSET VALUE, End of Year $41.11 $37.65 $36.55 $27.52 $21.26
Total Return 11.40% 3.22% 33.28% 29.96% 32.90%
Net Assets, End of Period (000's omitted) $178,599 $194,962 $125,460 $42,038 $23,571
Ratio of Total Expenses to Average Net Assets 1.38% 1.36% 1.44% 1.56% 1.40%
Ratio of Net Expenses to Average Net Assets 1.35% 1.32% 1.33% 1.54% 1.35%
Ratio of Net Investment Income (or loss) to Average Net -0.26% 0.21% 0.53% 0.58% 1.10%
Assets
Portfolio Turnover Rate 14.52% 27.03% 13.89% 16.90% 22.70%
</TABLE>
HOW TO READ FINANCIAL HIGHLIGHTS
The Fund began fiscal 1999 with a net asset value (share price) of $37.65. In
1999 the Fund lost $0.11 per share from investment income (interest &
dividends). There was an increase of $4.37 in the value of investments held or
sold by the Fund resulting in a net increase of $4.26 from investment
operations. Shareholders received $0.80 per share in the form of a long term
capital gain distribution. There was no income distribution. Investment gains
($4.26 per share) minus the distributions ($0.80 per share) resulted in a share
price of $41.11 at the end of the year. This produced a total return of 11.40%
for the Fund for the fiscal year.
As of December 31, 1999 the Fund had $179 million in net assets. For the year,
its net expense ratio was 1.35% ($13.50 per $1000.00 in net assets). Net
investment loss amounted to 0.26% of the Fund's average net assets. The Fund
sold and replaced securities valued at 14.5% of its net assets.
FOR MORE INFORMATION
GENERAL INFORMATION AND OTHER AVAILABLE INFORMATION
Annual/Semi-Annual Report
These reports include a list of the Fund's investments and financial statements,
and are incorporated by reference into this prospectus. The reports also contain
a statement from the investment advisor discussing market conditions and
investment strategies that significantly affected the Fund's performance during
the period.
Statement of Additional Information (SAI)
The SAI contains more detailed information on all aspects of the Fund and is
incorporated by reference into this Prospectus.
To obtain this and other information on the Muhlenkamp Fund free of charge,
please contact us:
Phone: l-800-860-3863
E-mail: [email protected]
Internet: www.muhlenkamp.com
You may review and obtain copies of Fund documents by visiting the SEC's Public
Reference Room in Washington, D.C. You may also obtain copies of Fund documents
by paying a duplicating fee and sending an electronic request to the following
e-mail address: [email protected], r by sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, D.C. 20549-0102.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-202-942-8090.
Investment Company File No. 81l-5469
Muhlenkamp Fund Symbol: MUHLX
Muhlenkamp Fund CUSIP Number: 962096 103
STATEMENT OF ADDITIONAL INFORMATION
FOR
MUHLENKAMP FUND
A SERIES OF THE WEXFORD TRUST
MARCH 1, 2000
MUHLENKAMP FUND (the "Fund"), a series of the Wexford Trust, is an open-end
diversified investment management company organized as a business trust.
This Statement of Additional Information is not a Prospectus. It should be read
in conjunction with the Fund's Prospectus dated March 1, 2000, a copy of which
may be obtained without charge from the Fund by writing its corporate offices at
12300 Perry Highway, Suite 306, Wexford, PA 15090-8379 or calling
1-800-860-3863.
The Fund's audited financial statements, accompanying notes and report of the
independent auditors for the fiscal year ended December 31, 1999, are
incorporated by reference to the Fund's 1999 Annual Report in this Statement of
Additional Information.
TABLE OF CONTENTS
Fund History 2
Investment Objective and Policies 2
Options and Foreign Securities 3
Investment Restrictions 6
Non-Fundamental Investment Restrictions 7
History and Background of Investment Advisor 7
Trustees and Officers of the Trust 8
Investment Advisory Board 10
Brokerage Allocations 10
Net Asset Value Calculation 10
Purchase of Shares 11
Redemption of Shares 13
Federal Income Tax Status 13
Capital Structure 14
Performance Data 14
Financial Information 15
Control Persons and Principal Holders of Securities 15
Other Service Providers 16
Appendix 17
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<CAPTION>
CUSTODIAN: INVESTMENT ADVISOR: TRANSFER AGENT
<S> <C> <C>
Firstar Bank, N.A. Muhlenkamp & Co., Inc. MUHLENKAMP FUND
425 Walnut St. 12300 Perry Highway, Suite 306 c/o Firstar Mutual Fund Services, LLC PO Box 701
Cincinnati, OH 45201 Wexford, PA 15090-8379 Milwaukee, WI
Tel: (877) 935-5520 53201-0701
e-mail: [email protected] (800) 860-3863
</TABLE>
FUND HISTORY
The Fund is the only series of the Wexford Trust, which was organized as a
Massachusetts Business Trust on September 21, 1987. The Trust is an open-end
investment management company established under the laws of the Commonwealth of
Massachusetts by an Agreement and Declaration of Trust dated July 6, 1988 (the
"Trust Agreement"). The Trust Agreement permits the Trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value. The Fund operates as a diversified fund. This means that with respect to
75% of its assets, the Fund will not invest more than 5% in any single issuer.
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. 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.
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks to maximize total return to its shareholders through capital
appreciation, and income from dividends and interest, consistent with reasonable
risk. To pursue this goal, the Fund principally invests in a diversified list of
common stocks, unless the stock market environment has risen to a point where
the advisor to the Fund, Muhlenkamp & Co., Inc., (MCI), can no longer find
equity securities that, in its judgment, it has determined to be undervalued.
During such periods, the Fund will invest in fixed-income or debt investments
until such time as more attractive common stocks can be found for purchase.
MCI believes that the success of a stock is dependent upon, and invariably a
reflection of, the quality of a company's management. Therefore, MCI spends time
assessing management's ability prior to making a commitment to its shares with
Fund assets. The assessment may include an analysis of historical financial
achievements of the company, direct discussions with management by telephone or
in person, visits to the company, conversations with security analysts who
actively follow the company for investment brokerage firms, and discussions with
competitors, suppliers, and customers of the company. While MCI feels this
assessment technique to be clearly instrumental to the success of the
investment, it should be recognized that judgments made by MCI are purely
subjective in nature. There can be no assurance that MCI will be successful in
achieving its investment objectives for the Fund.
It is MCI's belief that the objective of maximizing total return to shareholders
can only be achieved consistently over a long investment horizon. Typically,
this will mean that a stock may be held for a three-to-five year period or
longer if MCI, by its own determination, feels that the recognition of true
business worth has not yet been attained in the stock's current market
quotation. Thus, the Fund serves little purpose for investors who wish to take
advantage of short-term fluctuations in its net asset value per share.
Consistent with MCI's objective of seeking to maximize total returns for Fund
shareholders, MCI from time to time may also choose to invest some or all of the
Fund's assets in investment grade fixed-income or debt investments. Such
investments will be purchased and held during periods when MCI is unable to find
stocks that it believes have return expectations commensurate with the risks
that must be assumed by their continued retention. (More detailed information
regarding certain types of fixed income investment restrictions is contained in
the Appendix of this Statement of Additional Information ("SAI")).
Additionally, under adverse market conditions, the Fund may take temporary
defensive measures such as holding cash reserves, U.S. treasury securities, or
money market instruments without limit. In taking such measures, the Fund may
not achieve its investment objective. The investment objective of the Fund
cannot be changed without a vote of the shareholders.
MCI recognizes that while the Fund remains small in size (less than $300 million
in total assets at current market), MCI may have greater flexibility in
achieving the Fund's objective of maximizing total returns. As the Fund grows in
size, it may become more difficult for MCI to find securities to invest in that
meet the objectives of the Fund. This may also occur during periods when the
stock market in general has been rising for a long period of time. Therefore,
the Fund has reserved the right to limit its asset size by discontinuing sales
of its shares at any time. The Board of Trustees of the Fund may suspend sales
whenever in its collective wisdom it believes it necessary in order for the Fund
to continue to adhere to its stated objective, or that for other reasons it
would be in the best interests of Fund shareholders to do so. It should be clear
to investors in Fund shares that MCI believes income is important in maximizing
total returns. The Fund's advisor is aware that annual distributions of capital
gains and dividend/interest income earned on shares may result in a shareholder
paying additional federal, state and/or local income taxes (For details, see
"Federal Income Tax Status" in this SAI). Fund shareholders should understand
that when MCI makes investment decisions, such tax considerations are secondary
to its objective of attempting to maximize total returns. This policy is partly
based upon a belief by MCI that such taxes and tax rates have little or no
bearing on an individual company's attractiveness as an investment. It is also
founded on MCI's belief that tax rates in general are, or should be, of
declining importance to the investment decision-making process, viewed in its
widest sense. Tax deferred portfolios like IRA and pension monies, are ideally
suited for investment in shares of the Fund for these reasons.
OPTIONS
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 Fund's 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 in
excess of the strike 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 in 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 over-the-counter or "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.
FOREIGN SECURITIES
Although the Fund typically does not invest in foreign securities, it may do so
if the investment advisor deems it to be appropriate and consistent with the
investment objective. Foreign securities include equity securities of non-U.S.
companies and corporate and government fixed-income securities denominated in
currencies other than U.S. dollars. These securities may be traded domestically
or abroad through various stock exchanges, American Depositary Receipts or
International Depositary Receipts.
Investments in foreign securities involve special risks that differ from those
associated with investments in domestic securities. The risks associated with
investments in foreign securities relate to political and economic developments
abroad, as well as those that result from the differences between the regulation
of domestic securities and issuers and foreign securities and issuers.
INVESTMENT RESTRICTIONS
The Fund has adopted certain investment restrictions which cannot be changed or
amended unless approved by the vote of a majority of its outstanding shares as
set forth in its By-Laws and in accordance with requirements under the
Investment Company Act of 1940. Accordingly, the Fund will not:
[A] Invest in the purchase and sale of real estate.
[B] Invest in futures, commodities or in commodity contracts, restricted
securities, mortgages, oil, gas, mineral or other exploration or development
programs. [C] Borrow money, except for temporary purposes, and then only in
amounts not to exceed in the aggregate 5% of the market value of its total
assets at the time of such borrowing.
[D] Invest more of its assets than is permitted under regulations in securities
of other registered investment companies, which restricts such investments to a
limit of 5% of the Fund's assets in any one registered investment company, and
10% overall in all registered investment companies, in no event to exceed 3% of
the outstanding shares of any single registered investment company.
[E] Invest more than 5% of its total assets at the time of purchase in
securities of companies that have been in business or been in continuous
operation less than 3 years, including the operations of any predecessor.
[F] Invest or deal in securities that do not have quoted markets.
[G] Neither alone nor with all other series funds of the Wexford Trust, own more
than 10% of the outstanding voting securities of any one issuer or company, nor
will it, with at least 75% of its total assets, invest more than 5% of its
assets in any single issue, valued at the time of purchase. This restriction
shall not be applicable for investments in U.S. Government or Government Agency
securities.
[H] Invest 25% or more of its total assets valued at the time of purchase in any
one industry or similar group of companies, except U.S. Government securities.
[I] Maintain margin accounts, will not purchase its investments on credit or
margin, and will not leverage its investments, except for normal transaction
obligations during settlement periods. [J] Make any investment for the purpose
of obtaining, exercising or for planning to exercise voting control of subject
company.
[K] Sell securities short.
[L] Underwrite or deal in offerings of securities of other issuers as a sponsor
or underwriter nor invest any Fund assets in restricted securities or issues
that have not been registered under the Securities Act of 1933 for sale to the
general public. (Note: The Fund may be deemed an underwriter of securities when
it serves as distributor of its own shares for sale to or purchase from its
shareholders.)
[M] Make loans to others or issue senior securities. For these purposes the
purchase of publicly distributed indebtedness of any kind is excluded and not
considered to be making a loan.
In regard to the restriction marked as item [D] above, the Fund utilizes
computerized cash management services offered by its custodian, which services
presently include reinvesting overnight and short-term cash balances in shares
of other registered investment companies, better known as "money market funds".
The primary investment objective of the money market funds is safety of
principal and maximum current income from holding highly liquid, short-term,
fixed investments, principally U.S. Government and Agency issues. The Fund will
not be acquiring such shares as permanent investments but rather will be
utilizing such services solely for convenience and efficiency as it tries to
keep short-term monies invested at interest only until such time as more
permanent reinvestments can practically be made in the ordinary course of
business. Cash will be held pending the purchase, sale or reinvestment of the
Fund's assets.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund has adopted certain other investment restrictions which are not
fundamental policies and which may be changed by the Fund's Board of Trustees
without shareholder approval. Accordingly, the Fund may not:
[A] Invest in Real Estate Limited Partnerships.
[B] Invest in warrants in excess of 5% of the Fund's Net Assets; no more than
2% of the Fund's net assets may be invested in warrants not listed on the
NY or American Stock Exchanges.
[C] Hold more than 15% of net assets in illiquid securities.
[D] Lend its assets to any person or individual, except by the purchase of
bonds or other debt obligations customarily sold to institutional
investors. However, portfolio securities may be loaned if collateral values
are continuously maintained at no less than 100% by "marking to market"
daily and the practice is fair, just and equitable as determined by a
finding that adequate provision has been made for margin calls, termination
of the loan, reasonable servicing fees (including finders' fees), voting
rights, dividend rights, shareholder approval and disclosure. Such lending
of portfolio securities must also be within the limitations approved by the
Securities and Exchange Commission.
HISTORY AND BACKGROUND OF INVESTMENT ADVISOR
The investment advisor to the Fund is Muhlenkamp & Co., Inc., (MCI). MCI is a
Pennsylvania corporation practicing as an Investment Advisor. MCI is registered
under the Investment Advisors Act of 1940 with the Securities and Exchange
Commission. MCI is substantially owned by Mr. Ronald H. Muhlenkamp, its
principal officer, who is also the principal officer and a trustee of the Fund.
MCI was incorporated October 1, 1981, succeeding a sole proprietorship of the
same name which has been offering investment advisory services under the
direction and control of Mr. Muhlenkamp since 1977. MCI's principal activity is
to provide investment advisory and consulting services under contract to
individuals, pension, profit-sharing, IRA and KEOGH retirement plans,
corporations, and non-profit organizations generally located in the service area
that includes the continental U.S.
Mr. Ronald H. Muhlenkamp, MCI's principal investment professional, has been
employed or active as an investment advisor doing investment research or
managing investment portfolios since 1970. In addition to the above duties, he
holds responsibilities as President and Director of MCI and is the principal in
charge of all its investment management and research activities. Mr. Muhlenkamp
received a degree in engineering from the Massachusetts Institute of Technology
and a Masters of Business Administration degree from Harvard Business School.
In addition, Mr. Muhlenkamp is a Chartered Financial Analyst in the Financial
Analyst Federation.
Prior to his forming MCI, Mr. Muhlenkamp served two years with Berkley Dean &
Co., NYC, before spending five years as a portfolio analyst with Integon
Corporation, where he assumed responsibility for management of its pension
account. While employed at Integon, Mr. Muhlenkamp had the opportunity to
extensively study major investment management practices and philosophies of the
past 30 years. In 1975 Mr. Muhlenkamp joined C. S. McKee and Company where he
was responsible for over 70 investment portfolios. In 1977 Mr. Muhlenkamp left
C. S. McKee and Company to form MCI. He is a member of the Economics Club of
Pittsburgh.
It is the intention of Mr. Muhlenkamp, when advising the Fund, to follow an
approach that is similar to the one he follows in managing individual portfolios
and which has been described herein and in the Fund Prospectus.
However, relative to individually managed accounts, the Fund will have more
freedom to sell stocks when they reach price targets, regardless of tax
implications. This is so because investment portfolios for individuals tend to
be more constrained by tax considerations than the Fund intends to be. As a
result, turnover for regulated investment company portfolios, on average, is
higher than for individual portfolios.
MCI will not invest assets of any other managed account in shares of the Fund
except as directed in writing by a person unaffiliated with the Fund or with
MCI, who has authority to make such direction. Any investments directed to be
made in Fund shares will be excluded from managed account assets for fee
purposes. Furthermore, MCI, its officers, directors and affiliated persons, will
refrain from expressing any opinion concerning the Fund to any other person or
persons over whose assets MCI has investment advisory responsibilities and for
which services it receives compensation. MCI, as investment advisor to the Fund,
renders such services under a contract that provides for payment to MCI of a
fee, calculated daily and paid monthly, at the rate of 1% per annum of the
Fund's assets. This rate is consistent with that being charged by MCI to manage
its other client accounts, but is higher than the fee charged by most other
investment companies. The advisory contract between MCI and the Fund is subject
to approval annually by the Fund's Board of Trustees, including a majority of
the disinterested Trustees, and is terminable upon 30 days written notice, one
party to the other.
All employees of the investment advisor who perform duties for the Fund shall
remain employees of MCI, which shall bear all employment costs of such staff. If
MCI ceases to operate for any reason or assigns the contract, such contract is
automatically terminated. It is anticipated that total costs of Fund operation
will be restricted by regulations in those states in which the Fund anticipates
it will seek to be registered. At present this maximum fee restriction is
commonly set at 2% of the total assets of the Fund.
TRUSTEES AND OFFICERS OF THE TRUST
As a Massachusetts Business Trust, the business and affairs of the Trust are
managed by its officers under the direction of its Board of Trustees. The name,
age, address, principal occupation(s) during the past five years, and other
information with respect to each of the trustees and officers of the Trust are
as follows:
<TABLE>
<CAPTION>
PAST FIVE YEAR
POSITION WITH BUSINESS AFFILIATIONS
NAME AND ADDRESS THE FUND/AGE AND PRIMARY OCCUPATION
- ---------------- -------- --- ----------------------
<S> <C> <C>
Ronald H. Muhlenkamp* President, Trustee/56 President and Director of Muhlenkamp &
Muhlenkamp & Company, Inc. Company, Inc., investment advisor to
12300 Perry Highway the Fund, from 1987 to present.
Wexford, PA 15090
Alfred E. Kraft Trustee/63 An independent management consultant
202 Fan Hollow Rd from 1986 to present.
Uniontown, PA 15401
Terrence McElligott Trustee/52 President of West Penn Brush & Supply,
4103 Penn Ave Inc., a wholesale industrial brush
Pittsburgh, PA 15224 sales company, from 1979 to present.
John H. Kunkle, III Treasurer/37 Portfolio analyst with Muhlenkamp &
Muhlenkamp & Company, Inc. Company, Inc., investment advisor to
12300 Perry Highway the Fund, from 1992 to present.
Wexford, PA 15090
Jean Leister Secretary/52 Administrative assistant with
Muhlenkamp & Company, Inc. Muhlenkamp & Co., Inc., the
12300 Perry Highway investmenet advisor to the Fund, from
Wexford, PA 15090 1987 to present.
</TABLE>
* This trustee is deemed to be an "interested person" of the Trust as defined by
the 1940 Act.
<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT BENEFITS COMPENSATION FROM
AGGREGATE ACCRUED AS PART OF ESTIMATED ANNUAL FUND AND FUND
NAME OF PERSON, POSITION COMPENSATION FROM FUND EXPENSES BENEFITS UPON COMPLEX PAID TO
FUND RETIREMENT TRUSTEES
- ----------------------------- -------------------- ---------------------- --------------------- -------------------
<S> <C> <C> <C> <C>
Ronald H. Muhlenkamp, 0 0 0 0
Trustee & President
Alfred E. Kraft, Trustee 0 0 0 0
Terrence McElligott, Trustee 0 0 0 0
</TABLE>
INVESTMENT ADVISORY BOARD
Although the Fund currently has no advisory board, the By-laws of each fund
series permits the President of the Fund, with the approval of the Board of
Trustees, to appoint up to 15 individuals to assist the President and the
Trustees to define and set overall investment strategies in an attempt to reach
the Fund's investment objectives as stated. Members of this advisory board will
either be individuals of prominence or persons who, in the judgment of the
President of the Fund, may be important to its success and growth. The duties of
members of the Advisory Board shall be totally external to the daily operation
of the Fund itself and such members shall serve at the pleasure of the
President. They will have no direct, active contact with the Fund, they will
have no knowledge of its daily operations nor are they to be considered control
or access persons. They possess only advisory responsibilities that will be
sought by the President, the Trustees and by MCI from time to time as they alone
deem necessary or desirable.
It is intended, though not a contractual obligation or duty, that one or more
members of this Advisory Board may attend and address some or all of the
meetings of shareholders, as arranged. Each Advisory Board member will be
available to the President of each fund and to MCI from time to time by phone
communication, to render advice and counsel, in hopes that such advice and
counsel will lead to a more successful investment performance.
In the opinion of the advisor the combined experience and insight of advisory
board members tends to support the Fund's objectives and is expected to prove
useful to the investment advisor to the Fund.
BROKERAGE ALLOCATIONS
It is the Fund's policy to allocate brokerage business to the best advantage and
benefit of its shareholders. The President of the Fund and MCI shall be
responsible for directing all transactions through brokerage firms of its
choice. Further to that policy, all securities transactions are made so as to
obtain the most efficient execution at the lowest transaction cost. Nothing in
this policy, however, is to be construed to prohibit the Fund or MCI from
allocating transactions to firms whose brokerage charges may include the cost of
providing investment research, or other legally permitted services which the
Fund and MCI deem to be necessary and/or valuable to the successful management
of its assets. Each buy or sell order will be placed according to the type, size
and kind of order involved and as each condition may demand, so as to attempt to
secure the best result for the Fund and its shareholders, all factors
considered.
NET ASSET VALUE CALCULATION
The net asset value per share is computed by dividing the aggregate market value
of Fund assets daily, less its liabilities, by the number of portfolio shares
outstanding. Portfolio securities are valued and net asset value per share is
determined as of the close of business on the New York Stock Exchange (NYSE),
which is currently 4:00 p.m. (EST), on each day the NYSE is open and on any
other day in which there is a sufficient degree of trading in Fund portfolio
securities that the current net asset value per share might be materially
affected by changes in portfolio securities values. NYSE trading is closed
weekends and holidays. Portfolio securities listed on an organized exchange are
valued on the basis of the last sale on the date the valuation is made.
Securities that are not traded on that day, and for which market quotations are
otherwise readily available, and over-the-counter and other traded fixed-income
or debt securities for which market quotations are readily available, are valued
on the basis of the bid price at the close of business on that date. Securities
and other assets for which market quotations are not readily available or have
not traded are valued at fair value as determined by procedures established by
the Board of Trustees. Notwithstanding the above, bonds and other fixed-income
or debt securities may be valued on the basis of prices determined by procedures
established by the Board of Trustees if it is the belief of the Board of
Trustees that such price determination more fairly reflects the fair value of
such securities. Such procedures would commonly include pricing on a
yield-to-maturity basis as compared with similarly traded fixed-income or debt
securities. Money market instruments are valued at cost, which approximates
market value unless the Board of Trustees determines that such is not a fair
value. The sale of common shares of any series fund will be suspended during
periods when the determination of its net asset value is suspended pursuant to
rules or orders of the Securities and Exchange Commission, or may be suspended
by the Board of Trustees whenever in its sole judgment it believes it is in the
best interest of shareholders to do so.
PURCHASE OF SHARES
INITIAL PURCHASES: Investors may begin an investment in Fund shares with $1,500
by simply completing and signing the enclosed application form. The $1,500
minimum is reduced to $200 for those new accounts participating in the Automatic
Investment Plan (AIP). All accounts must have a valid tax identification number.
Return the form to: MUHLENKAMP FUND, c/o Firstar Mutual Fund Services, LLC, PO
Box 701, Milwaukee, WI 53201-0701, along with a check made payable to the
"MUHLENKAMP FUND". Third party checks, credit cards and cash will not be
accepted. A copy of the application form is included as part of the Fund's
Prospectus and is available to prospective investors upon request by calling
1-800-860-3863 or by writing to the Wexford Trust, which is the sole distributor
of Fund shares. The offering price of such purchases will be at the net asset
value per share next determined after receipt by the Fund of a valid purchase
order. The date on which the application is accepted by the Fund and the net
asset value determination as of the close of business on that date shall
determine the purchase price and shall normally be the purchase date for shares.
Payment for shares purchased shall be by check or receipt of good funds by the
Fund, which reserves the right to withhold or reject requests for purchases for
any reason, including uncollectible funds. In the event of a cancellation of any
purchase due to uncollectible funds, the purchaser shall be liable for all
administrative costs incurred and for all other losses or charges for such
invalid transfer and/or purchase. Certified checks are not necessary to purchase
Fund shares. There shall be no sales charge for purchase of shares of common
stock of the Fund.
The Fund has authorized one or more brokers to accept on its behalf purchase and
redemption orders. Such brokers are authorized to designate other intermediaries
to accept purchase and redemption orders on the Fund's behalf. The Fund will be
deemed to have received a purchase or redemption order when an authorized broker
or, if applicable, a broker's authorized designee, accepts the order. Customer
orders will be priced at the Fund's Net Asset Value next computed after an
authorized broker accepts them, or the broker's authorized designee.
MINIMUM REQUIREMENTS: By November 30th of each year, all accounts must have
investments totaling $1,500 or more; or an account balance greater than $1,500;
or be enrolled in the AIP. Accounts that do not meet one of these three criteria
will be charged a $15 fee. Such fees will be used to lower Fund expenses. The
Fund will check accounts and charge this fee annually.
SUBSEQUENT PURCHASES: Purchases of shares made subsequent to an initial purchase
or purchases by a registered shareholder may be made and sent by mail to
MUHLENKAMP FUND, c/o Firstar Mutual Fund Services, LLC, PO Box 701, Milwaukee,
WI 53201-0701. Purchases of shares made subsequent to an initial purchase or
purchases by a registered shareholder may be made by telephone by calling
1-800-860-3863. All subsequent purchases must be made with no less than $50,
which is also the minimum for participating in the Automatic Investment Plan.
(See Automatic Investment Plan.) These minimum requirements also apply to IRAs,
Retirement Accounts and UGMA Accounts and such amounts shall be due and payable
in good funds to the Fund on the purchase date. Third party checks, credit
cards, and cash will not be accepted. No sales charge shall be made for
subsequent Purchases.
REINVESTMENTS: The Fund will automatically reinvest all dividend distributions
to shareholders in additional shares of the requested fund series at net asset
value as next determined as of the close of business on the payment date of such
dividend distribution, unless otherwise instructed by the shareholder in writing
prior to the record date for such distributions.
FRACTIONAL SHARES: When share purchases or redemptions are made or when cash
is requested by a shareholder, shares will be issued or redeemed respectively,
in fractions of a share, calculated to the third decimal place. (Example:
$1,000 invested at a net asset value of $11.76 per share will purchase 85.034
shares.)
ISSUANCE OF SHARE CERTIFICATES: The Fund does not issue share certificates,
unless specifically requested. Due to the inconvenience, costs, and additional
work involved with issuing certificates, shareholders are strongly encouraged to
have all shares held in an account maintained by the Fund itself, as is the
custom within the mutual fund industry.
AUTOMATIC INVESTMENT PLAN: The Automatic Investment Plan (AIP) allows
shareholders to authorize the Muhlenkamp Fund to debit their bank account for
the purchase of Muhlenkamp Fund shares. Investments can be made at least monthly
by automatically deducting $50 or more from the shareholder's bank account. In
order to participate in the AIP an account in the Muhlenkamp Fund must be opened
with a minimum of $200 (IRAs included) and an application for automatic
investment must be completed. Cancellation of the AIP or changes to the amount
or frequency of the automatic purchase may be made at any time by notifying the
Muhlenkamp Fund in writing at least 5 days before the order is effective.
Shares will be purchased at the price next determined following acceptance of
funds by the Muhlenkamp Fund. The Muhlenkamp Fund will send a confirmation for
every transaction, and a debit entry will appear on the shareholder's bank
statement. In the event of a cancellation of any purchase due to uncollected
funds, the purchaser shall be liable for all administrative costs incurred and
for all other losses or charges for such invalid transfer and/or purchase.
To establish an AIP for a Muhlenkamp Fund account, complete the Muhlenkamp Fund
Automatic Investment Application and include a voided, unsigned check or a
savings deposit/withdrawal slip from the bank account to be debited. This
service will become effective 15 days after the Muhlenkamp Fund accepts the
Automatic Investment Application in good order.
REDEMPTION OF SHARES
Shareholders may sell all or a portion of their shares to the Fund on any day a
NAV is calculated and such redemptions will be made in the manner as described
in detail in the Fund's Prospectus dated this same date. All normal voluntary,
involuntary or Systematic Withdrawal redemptions are subject to the terms and
conditions as set forth in the Prospectus.
If share certificates are issued for any reason and are held by a shareholder
requesting the Fund to redeem shares, it is required that such share
certificates first be delivered in person or by mail to the Fund in good form
for transfer. The share certificates must be signed and contain a proper
signature guarantee by an official of a commercial bank or a New York Stock
Exchange member firm, before redemption can take place and payment for shares
made to any redeeming shareholder. The Fund shall have the right to refuse
payment to any registered shareholder until all legal documentation necessary
for a complete and lawful transfer is in the possession of the Fund or its
agents, to the complete satisfaction of the Fund and its Board of Trustees.
Shareholders participating in the AIP may have the proceeds of their redemption
deposited directly into the account previously designated on the Automatic
Investment Application. Under most circumstances, payments will be transmitted
on the third business day or no later than 7 calendar days following receipt by
the Muhlenkamp Fund of a valid request for redemption.
FEDERAL INCOME TAX STATUS
It is intended that the Fund qualify for and elect the special tax treatment
afforded a "regulated investment company" under subchapter M of the Internal
Revenue Code. To qualify, the Fund must: (1) Make an election to be a regulated
investment company; (2) invest and re-invest so that at least 90 percent of its
gross income is derived from dividends, interest, payments with respect to
securities loans, and gains from the sale or other disposition of stocks or
securities; (3) Invest and re-invest so that less than 30 percent of its gross
income is derived from the sale or other disposition of stock or securities held
for less than three months; (4) Satisfy certain diversification requirements
with respect to its assets at the close of each quarter of the taxable year; (5)
Distribute to its shareholders substantially all of its ordinary and capital
gain net income.
Dividends paid out as distributions to Fund shareholders are derived from
interest and dividends it receives and from any net capital gains the Fund may
realize during the calendar year. Dividends derived from investment income are
taxable to shareholders at ordinary income tax rates when received, regardless
of whether received as cash or as additional shares. The information Fund
shareholders will require in order to correctly report the amount and type of
dividends and distributions on their tax returns will be provided by the Fund
early each calendar year, sufficiently in advance of the date for filing a
calendar year return. To avoid the Fund having to withhold a portion of your
dividends, it is necessary that you supply the Fund with needed information,
including a valid, correct Social Security or Tax Identification Number.
A regulated investment company must also provide a written statement on or
before January 31 of the subsequent year containing the following information:
The name and address of the regulated investment company; the name and address
of the shareholder; a statement indicating that the pass-through entity is
required to report the amount of the allocable affected expenses pursuant to
Regulation Section 1.67(n)(i)(i); the amount of income deemed distributed to the
investor; and the amount of expenses required to be allocated to the investor.
CAPITAL STRUCTURE
Under the terms of the Trust's Declaration of Trust, each Fund shareholder has
one vote per share of beneficial interest in the Trust. A majority of shares,
voting in accordance with the terms as set forth in the Declaration and bylaws:
(1) elects a majority of Fund Trustees; (2) must approve advisory contracts; (3)
can terminate the Trust; and 4) generally holds powers to determine and/or
approve or disapprove fundamental Fund policies. Required shareholder approvals
shall be obtained at annual or special meetings duly called and held for such
purposes. Trustees are elected to office for an indefinite term and are charged
with the responsibility of over- seeing the day to day operation and affairs of
the Fund for shareholders. Trustees may appoint persons to fill vacancies
without a meeting or shareholder approval, so long as a majority of Trustees
then serving have been elected by shareholders.
PERFORMANCE DATA
The average total return quotations for 1, 5, and 10 years ending on 12/31/99
are as follows. It equates the initial amount to the Ending Redeemable Value:
P(1+T)^n = ERV.
P = Initial Purchase of $1,000 T = Average Annual Total Return for the period. n
= Number of Years in the period.
ERV = Ending Redeemable Value at end of applicable 1, 5, and 10 year periods, or
fraction thereof.
<TABLE>
<CAPTION>
----------------------- ------------ -------------------- -----------------------------------
Initial Average Ending Redeemable Value
Period Purchase Annual Return (12/31/99)
----------------------- ------------ -------------------- -----------------------------------
<S> <C> <C> <C>
1 Year
(since12/31/98) $1,000 11.40% $1,114
5 Years
(since 12/31/94) $1,000 21.51% $2,649
10 Years
(since 12/31/89) $1,000 15.33% $4,163
----------------------- ------------ -------------------- -----------------------------------
</TABLE>
The Fund measures performance in terms of total return, which is calculated for
any specified period of time by assuming the purchase of shares of the Fund at
the net asset value at the beginning of the period. Each dividend or other
distribution paid by the Fund during such period is assumed to have been
reinvested at the net asset value on the reinvestment date. The shares then
owned as a result of this process are valued at the net asset value at the end
of the period. The percentage increase is determined by subtracting the initial
value of the investment from the ending value and dividing the remainder by the
initial value.
The Fund's total return shows its overall dollar or percentage change in value,
including changes in share price and assuming the Fund's dividends and capital
gains distributions are reinvested. A cumulative total return reflects the
Fund's performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have produced
the same cumulative return if the Fund's performance had been constant over the
entire period. Total return figures are based on the overall change in value of
a hypothetical investment in the Fund. Because average annual returns for more
than one year tend to smooth out variations in the Fund's return, investors
should recognize that such figures are not the same as actual year -by-year
results.
FINANCIAL INFORMATION
The Fund's most current financial statements are incorporated by reference to
the Fund's 1999 Annual Report into this Statement of Additional Information. The
1999 Annual Report will be furnished without charge upon request by calling or
writing the Investment Advisor for the Fund at the address on the cover of this
Statement of Additional Information. The annual report contains further
information about the Fund's performance.
The Fund will mail a Semi-Annual report to shareholders maintaining an active
account on June 30th of the each fiscal year. Annual reports will be mailed to
shareholders maintaining an active account on December 31st of each fiscal year.
The Fund will not mail duplicate financial reports and prospectuses to
shareholders having the same address of record. Shareholders can obtain
additional copies of the financial reports and prospectus by calling or writing
the Investment Advisor for the Fund at the address on the cover of this
Statement of Additional Information.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 1, 2000, the following shareholders were considered to be either
a control person or principal shareholder of the Fund. Control persons are
persons deemed to control the Fund because they own beneficially over 25% of the
outstanding equity securities. Principal holders are persons that own
beneficially 5% or more of the Fund's outstanding equity securities.
SHAREHOLDER
POSITION PERCENTAGE
National Financial Services
For Benefit of Our Customers
One World Financial Center
200 Liberty St.; Floor 5
New York, NY 10281-1003
10.25%
Charles Schwab & Company, Inc.
Special Custody Account for Exclusive
Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
8.65%
OTHER SERVICE PROVIDERS
FUND ADMINISTRATION
Firstar Mutual Fund Services, LLC ("Firstar") serves as Fund Administrator
pursuant to a Fund Administration Servicing Agreement with the Fund. As such
Firstar provides all necessary bookkeeping, shareholder recordkeeping services
and share transfer services to the Fund.
Under the Fund Administration Servicing Agreement, Firstar receives an
administration fee from the Fund at an annual rate of 6 basis points (0.06%) on
the first $350 million, 5 basis points (0.05%) on the next $400 million and 3
basis points (0.03%) on the balance of the daily average net assets of the Fund.
Fees are billed to the Fund on a monthly basis. Prior to April 1, 1999,
administrative services were provided to the Fund internally by Muhlenkamp &
Company, Inc. During the fiscal year ended December 31, 1999, the Fund incurred
fees of $88,372 payable to Firstar pursuant to the Fund Administration Servicing
Agreement.
FUND ACCOUNTING AND TRANSFER AGENT
Firstar Mutual Fund Services, LLC, serves as Fund Accountant and Transfer Agent
to the Fund pursuant to a Fund Accounting Servicing Agreement and a Transfer
Agent Servicing Agreement. Under the Fund Accounting Servicing Agreement,
Firstar will provide portfolio accounting services, expense accrual and payment
services, fund valuation and financial reporting services, tax accounting
services and compliance control services. Firstar will receive a fund accounting
fee which will be billed on a monthly basis. Prior to April 1, 1999, fund
accounting services were provided by American Data Services, Inc.
Under the Transfer Agent Servicing Agreement, Firstar will provide all of the
customary services of a transfer agent and dividend disbursing agent including,
but not limited to: (1) receiving and processing orders to purchase or redeem
shares; (2) mailing shareholder reports and prospectuses to current
shareholders; and (3) providing blue sky services to monitor the number of Fund
shares sold in each state. Firstar will receive a transfer agent fee which will
be billed on a monthly basis. Prior to May 1, 1999, transfer agent services were
provided by American Data Services, Inc.
CUSTODIAN
The Custodian for the Fund is Firstar Bank, N.A., 425 Walnut Street, Cincinnati,
OH 45201. As Custodian, Firstar Bank, N.A. holds all of the securities and cash
owned by the Fund.
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP, 2500 One PPG Place, Pittsburgh, Pennsylvania 15222 serves
as the independent accountant for the Fund.
APPENDIX
Bond Rating Categories as Defined by Standard & Poor's (S&P's) are quoted in
part and inserted herein for the information of potential investors in the Fund
as a reference as follows:
"A S&P's corporate or municipal debt rating is a current assessment of
the creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers or
lessees.
The debt rating is not a recommendation to purchase, sell or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor.
The ratings are based on current information furnished by the issuer or
obtained by S&P's from other sources it considers reliable. S&P's does not
perform any audit in connection with any rating and may, on occasion, rely on
unaudited financial information. The ratings may be changed, suspended or
withdrawn as a result of changes in, or availability of, such information, or
for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and
repayment of principal in accordance with the terms of the obligation;
II. Nature of and provisions of the obligor;
III. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors rights. AAA - Debt rated AAA has
the highest rating assigned by S&P's. Capacity to pay interest and repay
principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree. A -
Debt rated A has a strong capacity to pay interest and repay principal although
it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories. BBB
- - Debt rated 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.
BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC, and C is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and C the highest degree of speculation. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
CI - The rating is reserved for income bonds on which no interest is being paid.
D - Debt rated D is in default, and repayment of interest and/or repayment of
principal are in arrears. NR - indicates that no rating has been requested, that
there is insufficient information on which to base a rating, or that S&P does
not rate a particular type of obligation as a matter of policy."
WEXFORD TRUST
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(a) DECLARATION OF TRUST - Declaration of Trust(1)
(b) BYLAWS (1)
(c) INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS-- Incorporated by
reference to the Declaration of Trust and Bylaws
(d) ADVISORY AGREEMENT (1)
(e) UNDERWRITING AGREEMENT - Not applicable.
(f) BONUS OR PROFIT SHARING CONTRACTS - Not applicable.
(g) CUSTODY AGREEMENT (1)
(h) OTHER MATERIAL CONTRACTS
(i) Administration Agreement - Filed herewith.
(ii) Transfer Agent Servicing Agreement - Filed herewith.
(iii) Fund Accounting Services Agreement - Filed herewith.
(i) OPINION AND CONSENT OF COUNSEL (1)
(j) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS-- Filed herewith.
(k) OMITTED FINANCIAL STATEMENTS - Not applicable
(l) AGREEMENT RELATING TO INITIAL CAPITAL (1)
(m) RULE 12B-1 PLAN - Not applicable.
(n) RULE 18F-3 PLAN - Not applicable.
(o) RESERVED.
(o) CODE OF ETHICS - To be filed by amendment.
(1) Filed as an exhibit to previously filed Post-Effective Amendments.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
No person is directly or indirectly controlled by or under common
control with the Registrant.
ITEM 25. INDEMNIFICATION.
Reference is made to the Registrant's Agreement and Declaration of
Trust.
Pursuant to Rule 484 under the Securities Act of 1933, as amended, the
Registrant furnishes the following undertaking: "Insofar as indemnification for
liability arising under the Securities Act of 1933 (the "Act") may be permitted
to trustees, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, 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 Registrant 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 THE INVESTMENT ADVISOR
Not applicable.
ITEM 27. PRINCIPAL UNDERWRITERS.
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The books and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 are maintained in the following locations:
<TABLE>
<CAPTION>
RECORDS RELATING TO: ARE LOCATED AT:
- ------------------- ---------------
<S> <C>
Registrant's Fund Accounting, Administrator and Firstar Mutual Fund Services, LLC
Transfer Agent 615 East Michigan Street
Milwaukee, WI 53202
Registrant's Investment Advisor Muhlenkamp & Co., Inc.
12300 Perry Highway, Suite 306
Wexford, PA 15090-8379
Registrant's Custodian Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 54202
</TABLE>
ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A AND B.
Inapplicable
ITEM 30. UNDERTAKINGS.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Registration Statement to be signed below on its behalf by the undersigned,
thereunto duly authorized, in the City of Wexford and the State of Pennsylvania
on the 1st day of March, 2000.
WEXFORD TRUST
BY: /S/ RONALD H. MUHLENKAMP
Ronald H. Muhlenkamp
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on March 1, 2000.
SIGNATURE TITLE
/S/ RONALD H. MUHLENKAMP President, Trustee
- ------------------------
Ronald H. Muhlenkamp
/S/ ALFRED E. KRAFT Trustee
- -------------------
Alfred E. Kraft
/S/ TERRENCE MCELLIGOTT Trustee
- -------------------------
Terrence McElligott
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of April,
1999, by and between Wexford Trust, a Massachussetts business trust (hereinafter
referred to as the "Trust") and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as "FMFS").
WHEREAS, the Company is an open-end management investment company which
is registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each with
its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of providing fund administration services for the
benefit of its customers; and
WHEREAS, the Trust desires to retain FMFS to act as Administrator for
each series of the Trust listed on Exhibit A attached hereto, (each hereinafter
referred to as a "Fund"), as may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Trust hereby appoints FMFS as Administrator of the Trust on the
terms and conditions set forth in this Agreement, and FMFS hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement in consideration of the compensation
provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Supply:
a. Corporate secretarial services
b. Office facilities (which may be in FMFS's or its affiliate's
own offices)
c. Non-investment-related statistical and research data as needed
3. Coordinate board communication by:
a. Establish meeting agendas
b. Preparing board reports based on financial and administrative
data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and officer
liability coverage, and making the necessary SEC filings relating
thereto
e. Preparing minutes of meetings of the board and shareholders
f. Recommend dividend declarations to the Board, prepare and
distribute to appropriate parties notices announcing declaration
of dividends and other distributions to shareholders
g. Provide personnel to serve as officers of the Trust if so
elected by the Board and attend Board meetings to present
materials for Board review
4. Audits
a. Prepare appropriate schedules and assist independent auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
5. Assist in overall operations of the Fund
6. Pay Fund expenses upon written authorization from the Trust
7. Monitor arrangements under shareholder services or similar plan
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements,
including: 1) Asset diversification tests 2) Total
return and SEC yield calculations 3) Maintenance of
books and records under Rule 31a-3 4) Code of Ethics
for the disinterested trustees of the Fund
b. Monitor Fund's compliance with the policies and investment
limitations of the Trust as set forth in its Prospectus and
Statement of Additional Information
c. Maintain awareness of applicable regulatory and operational
service issues and recommend dispositions
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings relating to
the registration of the securities of the Trust so as to
enable the Trust to make a continuous offering of its shares in
all states
b. Monitor status and maintain registrations in each state
c. Provide information regarding material developments in state
securities regulation
3. SEC Registration and Reporting
a. Assist Trust counsel in updating Prospectus and Statement of
Additional Information and in preparing proxy statements and Rule
24f-2 notices
b. Prepare annual and semiannual reports, Form N-SAR filings and
Rule 24f-2 notices
c. Coordinate the printing, filing and mailing of publicly
disseminated Prospectuses and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
f. Monitor sales of each Fund's shares and ensure that such
shares are properly registered with the SEC and the appropriate
state authorities
g. File Rule 24f-2 notices
4. IRS Compliance
a. Monitor Company's status as a regulated investment company
under Subchapter M, including without limitation, review of the
following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by Fund's Prospectus and
Statement of Additional Information;
2. Prepare financial reports for officers, shareholders, tax
authorities, performance reporting companies, the board, the
SEC, and independent auditors;
3. Supervise the Company's Custodian and Trust Accountants in
the maintenance of the Company's general ledger and in the
preparation of the Fund's financial statements, including
oversight of expense accruals and payments, of the
determination of net asset value of the Company's net assets
and of the Company's shares, and of the declaration and
payment of dividends and other distributions to
shareholders;
4. Compute the yield, total return and expense ratio of each
class of each Portfolio, and each Portfolio's portfolio turnover
rate; and
5. Monitor the expense accruals and notify Trust management of
any proposed adjustments.
6. Prepare monthly financial statements, which will include
without limitation the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses
7. Prepare quarterly broker security transaction summaries.
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and
state tax returns including, without limitation, Forms 1120/8610
with any necessary schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to trustees and
other service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
3. COMPENSATION
The Trust, on behalf of the Fund, agrees to pay FMFS for the
performance of the duties listed in this Agreement, the fees and
out-of-pocket expenses as set forth in the attached Exhibit A.
Notwithstanding anything to the contrary, amounts owed by the Trust to
FMFS shall only be paid out of the assets and property of the
particular Fund involved.
These fees may be changed from time to time, subject to mutual written
Agreement between the Trust and FMFS.
The Trust agrees to pay all fees and reimbursable expenses within ten
(10) business days following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FMFS's control, except a loss
arising out of or relating to FMFS's refusal or failure to comply with
the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its duties
under this Agreement, the Trust shall indemnify and hold harmless FMFS
from and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any and
every nature (including reasonable attorneys' fees) which FMFS may
sustain or incur or which may be asserted against FMFS by any person
arising out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims,
demands, losses, expenses, and liabilities arising out of or relating
to FMFS's refusal or failure to comply with the terms of this Agreement
or from bad faith, negligence or from willful misconduct on its part in
performance of its duties under this Agreement, (i) in accordance with
the foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to FMFS by any duly authorized officer of the
Trust, such duly authorized officer to be included in a list of
authorized officers furnished to FMFS and as amended from time to time
in writing by resolution of the Board of Trustees of the Trust.
FMFS shall indemnify and hold the Trust harmless from and
against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Trust may sustain or
incur or which may be asserted against the Trust by any person arising
out of any action taken or omitted to be taken by FMFS as a result of
FMFS's refusal or failure to comply with the terms of this Agreement,
its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FMFS's control. FMFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FMFS. FMFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency use
of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled
to inspect FMFS's premises and operating capabilities at any time
during regular business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to
reprocess and correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee harmless,
the indemnitor shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further
understood that the indemnitee will use all reasonable care to notify
the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim which may be the subject of this
indemnification. In the event that the indemnitor so elects, it will so
notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall in
no case confess any claim or make any compromise in any case in which
the indemnitor will be asked to indemnify the indemnitee except with
the indemnitor's prior written consent.
C. FMFS is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument of the Trust
and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the Trust and its assets,
and if the liability relates to one or more series, the obligations
hereunder shall be limited to the respective assets of such series.
FMFS further agrees that it shall not seek satisfaction of any such
obligation from the shareholder or any individual shareholder of a
series of the Trust, nor from the Trustees or any individual Trustee of
the Trust.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and
prior, present, or potential shareholders of the Trust (and clients of
said shareholders), and not to use such records and information for any
purpose other than the performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing
by the Trust, which approval shall not be unreasonably withheld and may
not be withheld where FMFS may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by
the Trust.
6. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of three years. During the initial
three year term of this Agreement, if the Trust terminates any services
with FMFS, the Trust agrees to compensate Firstar an amount equal to
the fees remaining under the initial three year Agreement. Subsequent
to the initial three year term, this Agreement may be terminated by
either party upon giving ninety (90) days prior written notice to the
other party or such shorter period as is mutually agreed upon by the
parties. However, this Agreement may be amended by mutual written
consent of the parties.
7. RECORDS
FMFS shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. FMFS
agrees that all such records prepared or maintained by FMFS relating to
the services to be performed by FMFS hereunder are the property of the
Trust and will be preserved, maintained, and made available in
accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Trust on and in accordance with its
request.
8. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation promulgated by
the Securities and Exchange Commission thereunder.
9. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the
Trust by written notice to FMFS, FMFS will promptly, upon such
termination and at the expense of the Trust, transfer to such successor
all relevant books, records, correspondence, and other data established
or maintained by FMFS under this Agreement in a form reasonably
acceptable to the Trust (if such form differs from the form in which
FMFS has maintained, the Trust shall pay any expenses associated with
transferring the data to such form), and will cooperate in the transfer
of such duties and responsibilities, including provision for assistance
from FMFS's personnel in the establishment of books, records, and other
data by such successor.
10. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS
to act as agent for the other party to this Agreement, or to conduct
business in the name of, or for the account of the other party to this
Agreement.
11. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FMFS, shall furnish to FMFS the
data necessary to perform the services described herein at times and in
such form as mutually agreed upon if FMFS is also acting in another
capacity for the Trust, nothing herein shall be deemed to relieve FMFS
of any of its obligations in such capacity.
12. NOTICES
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as
follows: Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
Muhlenkamp & Co., Inc.
12300 Perry Highway, Suite 306
Wexford, PA 15090-8318
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
WEXFORD TRUST FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:_____________________________
Exhibit A
Effective April 1, 1999
MUHLENKAMP FUND
A SERIES OF THE WEXFORD TRUST
Fund Administration and Compliance
Annual Fee Schedule
ANNUAL FEE BASED UPON FUND GROUP ASSETS: 6 basis points on the first $350
million 5 basis points on the next $400 million 3 basis points on the
balance
Minimum annual fee: $40,000 per year
PLUS OUT-OF-POCKET EXPENSES, INCLUDING BUT NOT LIMITED TO: Postage
Programming Stationary Proxies Retention of records Special reports
Federal and state regulatory filing fees Certain insurance premiums
Expenses from board of directors meetings Auditing and legal expenses
All other out-of-pocket expenses
FEES AND OUT-OF-POCKET EXPENSES ARE BILLED MONTHLY.
TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of May, 1999,
by and between Wexford Trust, a Massachussetts business trust (hereinafter
referred to as the "Trust") and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as the "FMFS").
WHEREAS, the Trust is an open-end management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of administering transfer and dividend disbursing
agent functions for the benefit of its customers; and
WHEREAS, the Trust desires to retain FMFS to provide transfer and
dividend disbursing agent services to each series of the Trust listed on Exhibit
A attached hereto, (each hereinafter referred to as a "Fund") as may be amended
from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF TRANSFER AGENT
The Trust hereby appoints FMFS as Transfer Agent of the Trust on the
terms and conditions set forth in this Agreement, and FMFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein
2. DUTIES AND RESPONSIBILITIES OF FMFS
FMFS shall perform all of the customary services of a transfer agent and
dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of shares;
B. Process purchase orders with prompt delivery, where appropriate,
of payment and supporting documentation to the Trust's
custodian, and issue the appropriate number of uncertificated
shares with such uncertificated shares being held in the
appropriate shareholder account;
C. Arrange for issuance of shares obtained through transfers of
funds from shareholders' accounts at financial institutions and
arrange for the exchange of shares for shares of other eligible
investment companies, when permitted by Prospectus.
D. Process redemption requests received in good order and,
where relevant, deliver appropriate documentation to the
Trust's custodian;
E. Pay monies upon receipt from the Trust's custodian, where
relevant, in accordance with the instructions of redeeming
shareholders;
F. Process transfers of shares in accordance with the shareholder's
instructions;
G. Process exchanges between funds and/or classes of shares of
funds both within the same family of funds and with the Firstar
Money Market Fund, if applicable;
H. Prepare and transmit payments for dividends and distributions
declared by the Trust with respect to the Fund, after deducting
any amount required to be withheld by any applicable laws,
rules and regulations and in accordance with shareholder
instructions;
I. Make changes to shareholder records, including, but not
limited to, address changes in plans (i.e., systematic
withdrawal, automatic investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain,
pursuant to Rule 17ad-10(e) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), a record
of the total number of shares of the Fund which are authorized,
issued and outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail,
receive and tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to
dividends and distributions for all shareholders;
N. Provide shareholder account information upon request and
prepare and mail confirmations and statements of account
to shareholders for all purchases, redemptions and other
confirmable transactions as agreed upon with the Trust;
O. Mail requests for shareholders' certifications under
penalties of perjury and pay on a timely basis to the
appropriate Federal authorities any taxes to be withheld
on dividends and distributions paid by the Trust, all as
required by applicable Federal tax laws and regulations;
P. Provide a Blue Sky System which will enable the Trust to monitor
the total number of shares of the Fund sold in each state. In
addition, the Trust or its agent, including FMFS, shall identify
to FMFS in writing those transactions and assets to be treated as
exempt from the Blue Sky reporting for each state. The
responsibility of FMFS for the Company's Blue Sky state
registration status is solely limited to the initial compliance
by the Trust and the reporting of such transactions to the Trust
or its agent;
Q. Answer correspondence from shareholders, securities brokers and
others relating to FMFS's duties hereunder and such other
correspondence as may from time to time be mutually agreed upon
between FMFS and the Trust.
Reimburse the Fund each month for all material losses resulting from "as
of" processing errors for which FMFS is responsible in accordance with the "as
of" processing guidelines set forth in the attached exhibit B.
3. COMPENSATION
The Trust agrees to pay FMFS for the performance of the duties listed in
this agreement as set forth on Exhibit A attached hereto; the fees and
out-of-pocket expenses include, but are not limited to the following: printing,
postage, forms, stationery, record retention (if requested by the Trust),
mailing, insertion, programming (if requested by the Trust), labels, shareholder
lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Trust and FMFS.
The Trust agrees to pay all fees and reimbursable expenses within ten
(10) business days following the receipt of the billing notice.
Notwithstanding anything to the contrary, amounts owed by the Trust to
FMFS shall only be paid out of assets and property of the particular Fund
involved.
4. REPRESENTATIONS OF FMFS
FMFS represents and warrants to the Trust that:
A. It is a limited liability corporation duly organized, existing
and in good standing under the laws of Wisconsin;
B. It is a registered transfer agent under the Exchange Act.
C. It is duly qualified to carry on its business in the State of
Wisconsin;
D. It is empowered under applicable laws and by its charter and
bylaws to enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to
authorize it to enter and perform this Agreement;
F. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement; and
G. It will comply with all applicable requirements of the Securities
Act of 1933, as amended, and the Exchange Act, the 1940 Act, and
any laws, rules, and regulations of governmental authorities
having jurisdiction.
5. REPRESENTATIONS OF THE TRUST
The Trust represents and warrants to FMFS that:
A. The Trust is an open-ended non diversified investment company
under the 1940 Act;
B. The Trust is a business trust organized, existing, and in
good standing under the laws of Massachusetts;
C. The Trust is empowered under applicable laws and by its
Declaration of Trust and Bylaws to enter into and perform this
Agreement;
D. All necessary proceedings required by the Declaration of Trust have been
taken to authorize it to enter into and perform this Agreement;
E. The Trust will comply with all applicable requirements of the Securities Act,
the Exchange Act, the 1940 Act, and any laws, rules and regulations of
governmental authorities having jurisdiction; and
F. A registration statement under the Securities Act will be made
effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be
made, with respect to all shares of the Trust being offered for
sale.
6. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
FMFS shall exercise reasonable care in the performance of its duties
under this Agreement. FMFS shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with matters
to which this Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond FMFS's
control, except a loss arising out of or relating to the Agent's refusal or
failure to comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance of its duties
under this Agreement. Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its duties under this
Agreement, the Trust shall indemnify and hold harmless FMFS from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which FMFS may sustain or incur or which may be asserted
against FMFS by any person arising out of any action taken or omitted to be
taken by it in performing the services hereunder, except for any and all claims,
demands, losses expenses, and liabilities arising out of or relating to FMFS's
refusal or failure to comply with the terms of this Agreement or from bad faith,
negligence or from willful misconduct on its part in performance of its duties
under this Agreement, (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to FMFS by any duly
authorized officer of the Trust, such duly authorized officer to be included in
a list of authorized officers furnished to FMFS and as amended from time to time
in writing by resolution of the Board of Trustees of the Trust.
The Fund will indemnify and hold the Agent harmless against any and all
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) resulting from any claim, demand, action, or suit as a result
of the negligence of the Fund or the principal underwriter (unless contributed
to by the Agent's breach of this Agreement or other Agreements between the Fund
and the Agent, or the Agent's own negligence or bad faith); or as a result of
the Agent acting upon telephone instructions relating to the exchange or
redemption of shares received by the Agent and reasonably believed by the Agent
under a standard of care customarily used in the industry to have originated
from the record owner of the subject shares; or as a result of acting in
reliance upon any genuine instrument or stock certificate signed, countersigned,
or executed by any person or persons authorized to sign, countersign, or execute
the same.
FMFS shall indemnify and hold the Trust harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which the Trust may sustain or incur or which may be asserted
against the Trust by any person arising out of any action taken or omitted to be
taken by FMFS as a result of FMFS's refusal or failure to comply with the terms
of this Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, FMFS shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond FMFS's control. FMFS will make every reasonable effort to restore any
lost or damaged data and correct any errors resulting from such a breakdown at
the expense of FMFS. FMFS agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled to
inspect FMFS's premises and operating capabilities at any time during regular
business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the indemnitor may be asked to
indemnify or hold the indemnitee harmless, the indemnitor shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the indemnitee will use all reasonable care to
notify the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for indemnification. The
indemnitor shall have the option to defend the indemnitee against any claim
which may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the indemnitee
shall in such situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall in no case
confess any claim or make any compromise in any case in which the indemnitor
will be asked to indemnify the indemnitee except with the indemnitor's prior
written consent.
FMFS is hereby expressly put on notice of the limitation of shareholder
liability as set forth in the Trust Instrument of the Trust and agrees that
obligations assumed by the Trust pursuant to this Agreement shall be limited in
all cases to the Trust and its assets, and if the liability relates to one or
more series, the obligations hereunder shall be limited to the respective assets
of such series. FMFS further agrees that it shall not seek satisfaction of any
such obligation from the shareholder or any individual shareholder of a series
of the Trust, nor from the Trustees or any individual Trustee of the Trust.
7. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the Trust
all records and other information relative to the Trust and prior, present, or
potential shareholders (and clients of said shareholders) and not to use such
records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where FMFS may be exposed to civil or criminal
contempt proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities, or when so requested by the Trust.
8. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of three years. During the initial three year
term of this Agreement, if the Trust terminates any services with FMFS, the
Trust agrees to compensate Firstar an amount equal to the fees remaining under
the initial three year Agreement. Subsequent to the initial three year term,
this Agreement may be terminated by either party upon giving ninety (90) days
prior written notice to the other party or such shorter period as is mutually
agreed upon by the parties. However, this Agreement may be amended by mutual
written consent of the parties.
9. RECORDS
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Trust but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
The Investment Company Act of 1940 as amended (the "Investment Company Act"),
and the rules thereunder. The Agent agrees that all such records prepared or
maintained by The Agent relating to the services to be performed by the Agent
hereunder are the property of the Trust and will be preserved, maintained, and
made available with such section and rules of the Investment Company Act and
will be promptly surrendered to the Trust on and in accordance with its request.
10. GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Wisconsin. However,
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the Securities and Exchange Commission
thereunder.
11. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the Trust by
written notice to FMFS, FMFS will promptly, upon such termination and at the
expense of the Trust, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by FMFS under this
Agreement in a form reasonably acceptable to the Trust (if such form differs
from the form in which FMFS has maintained, the Trust shall pay any expenses
associated with transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from FMFS's personnel in the establishment of books, records, and other data by
such successor.
12. NOTICES
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
Muhlenkamp & Co., Inc.
12300 Perry Highway, Suite 306
Wexford, PA 15090-8318
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
WEXFORD TRUST FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:_____________________________
Exhibit A
Effective May 1, 1999
MUHLENKAMP FUND
A SERIES OF THE WEXFORD TRUST
Transfer Agent and Shareholder Servicing
Annual Fee Schedule
$14.00 per shareholder account per annum for all accounts except for IRA and
other retirement accounts for which Firstar Bank, N.A. acts as custodian and for
level 3 NSCC Networking accounts.
$16.50 per shareholder account per annum for IRA and other retirement
accounts for which Firstar Bank, N.A. acts as custodian.
$10.00 per shareholder account per annum for Level 3 NSCC Networking accounts.
Plus out-of-pocket expenses, including but not limited to: Telephone -
toll-free lines Postage Programming Stationery/envelopes Mailing
Insurance Proxies Retention of records Microfilm/fiche of records
Special reports ACH fees NSCC charges All other out-of-pocket expenses
ACH SHAREHOLDER SERVICES
$125.00 per month
$0.50 per account set-up and/or change $0.15 per item for AIP purchases
$0.50 per item for EFT payments and purchases $3.50 per correction,
reversal, or return item
QUALIFIED PLAN FEES (BILLED TO SHAREHOLDER)
Annual maintenance fee per account (Cap at $20 per SSN) - $10.00
Transfer to successor trustee $15.00/trans
Distribution to participant $15.00/trans
(Exclusive of SWP)
Refund of excess contribution $15.00/trans
ADDITIONAL SHAREHOLDER FEES (BILLED TO SHAREHOLDER)
Outgoing wire transfer $12.50/wire
Telephone exchanges $5.00/exchange
Return check fee $20.00/item
Stop payment $20.00/stp.
Liquidation, dividend, draft check
Research Fee $5.00/item
For requested items that are over two years old
(cap at $25.00)
FEES AND OUT-OF-POCKET EXPENSES ARE BILLED TO THE FUND MONTHLY.
NSCC
Out-of-Pocket Charges
NSCC Interfaces
Set Up
Fund/SERV, Networking, ACATS, Exchanges $5,000 set-up (one time)
DCCS, TORA
Commission Settlement $5,000 set-up (one time)
Processing
Fund/SERV $ 50 / month
Networking $ 250 / month
CPU Access $ 40 / month
FundServ Transactions $ .35 / trade
Networking - per item $ .025 / monthly dividend fund
Networking - per item $ .015 / non-mo. Dividend fund
First Data $ .10 / next-day FundServ trade
First Data $ .15 / same-day FundServ trade
NSCC Implementation
8 to 10 weeks lead time
Mutual Fund Services
Out-of-Pocket Expense Items
Database Select Requests $200 per select request
Postage $.31 per one ounce pre-sort
first class envelope
Shareholder Records Search $3.00 per search of lost
shareholder (based upon 2
returned mail items)
PAR System Restore $1,500 per restore
Data and Report Transmission
- - Monthly Service and Support $160 per month
- - $.01 per record
New Fund Programming
- - Fund Group Setup $1,500 per fund group
- - Fund Addition to Existing Group $500 per fund
- - Additional Classes of Existing Fund $250 per class
- - Additional Programming $150.00 per hour
Note - All rates subject to change
EXHIBIT B
FIRSTAR MUTUAL FUND SERVICES, LLC AS OF PROCESSING POLICY
Firstar Mutual Fund Services, LLC (FMFS) will reimburse the Fund(s) for
any net material loss that may exist on the Fund(s) books and for which FMFS is
responsible, at the end of each calendar month. "Net Material Loss" shall be
defined as any remaining loss, after netting losses against any gains, which
impacts the Fund's net asset value by more than 1/2 cent. Gains and losses will
be accumulated on a daily basis, will be reflected on the Fund's daily share
sheet, and will be settled on a monthly basis. FMFS will notify the Fund's
advisor on the daily share sheet of any losses for which the Fund's adviser may
be held accountable.
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of April,
1999, by and between Wexford Trust, a Massachusetts business trust (hereinafter
referred to as the "Trust") and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as "FMFS").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of providing mutual fund accounting services to
investment companies; and
WHEREAS, the Trust desires to retain FMFS to provide accounting services
to each series of the Trust listed on Exhibit A attached hereto, (each
hereinafter referred to as a "Fund"), as it may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT
The Trust hereby appoints FMFS as Fund Accountant of the Trust on the
terms and conditions set forth in this Agreement, and FMFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis
using security trade information communicated from the investment
manager.
(2) For each valuation date, obtain prices from a pricing
source approved by the Board of Trustees of the Trust and apply
those prices to the portfolio positions. For those securities
where market quotations are not readily available, the Board of
Trustees of the Trust shall approve, in good faith, the method
for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of
each valuation date and calculate gross earnings on investments
for the accounting period.
(4) Determine gain/loss on security sales and identify
them as, short-term or long-term; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Trust as to methodology, rate or
dollar amount.
(2) Record payments for Fund expenses upon receipt of
written authorization from the Trust.
(3) Account for Fund expenditures and maintain expense
accrual balances at the level of accounting detail, as agreed
upon by FMFS and the Trust.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share activity
as reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the
Trust.
(3) Determine net investment income (earnings) for the
Fund as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each valuation
date.
(4) Maintain a general ledger and other accounts, books,
and financial records for the Fund in the form as agreed upon.
(5) Determine the net asset value of the Fund according to
the accounting policies and procedures set forth in the Fund's
Prospectus.
(6) Calculate per share net asset value, per share net
earnings, and other per share amounts reflective of Fund
operations at such time as required by the nature and
characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share
price for each valuation date to parties as agreed upon from time
to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment
portfolio of the Fund to support the tax reporting required for
IRS-defined regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales
using the tax lot relief method designated by the Trust.
(4) Provide the necessary financial information to support
the taxable components of income and capital gains distributions
to the transfer agent to support tax reporting to the
shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the Fund's accounting
records available to the Trust, the Securities and Exchange
Commission, and the outside auditors.
(2) Maintain accounting records according to the
1940 Act and regulations provided thereunder
F. FMFS will perform the following accounting functions on a
daily basis:
(1) Reconcile cash and investment balances of each
Portfolio with the Custodian, and provide the Advisor with the
beginning cash balance available for investment purposes;
(2) Transmit or mail a copy of the portfolio valuation to
the Advisor;
(3) Review the impact of current day's activity on a per
share basis, review changes in market value.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings;
(2) Supply various Trust, Portfolio and class statistical
data as requested on an ongoing basis.
3. PRICING OF SECURITIES
For each valuation date, obtain prices from a pricing source selected by FMFS
but approved by the Board of Trustees and apply those prices to the portfolio
positions of the Fund. For those securities where market quotations are not
readily available, the Company's Board of Trustees shall approve, in good faith,
the method for determining the fair value for such securities.
If the Trust desires to provide a price which varies from the pricing source,
the Trust shall promptly notify and supply FMFS with the valuation of any such
security on each valuation date. All pricing changes made by the Trust will be
in writing and must specifically identify the securities to be changed by CUSIP,
name of security, new price or rate to be applied, and, if applicable, the time
period for which the new price(s) is/are effective.
4. CHANGES IN ACCOUNTING PROCEDURES
Any resolution passed by the Board of Trustees of the Trust that affects
accounting practices and procedures under this Agreement shall be effective upon
written receipt and acceptance by the FMFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
FMFS reserves the right to make changes from time to time, as it deems
advisable, relating to its services, systems, programs, rules, operating
schedules and equipment, so long as such changes do not adversely affect the
service provided to the Trust under this Agreement.
6. COMPENSATION
FMFS shall be compensated for providing the services set forth in this Agreement
in accordance with the Fee Schedule attached hereto as Exhibit A and as mutually
agreed upon and amended from time to time. The Trust agrees to pay all fees and
reimbursable expenses within ten (10) business days following the receipt of the
billing notice. Notwithstanding anything to the contrary, amounts owed by the
Trust to FMFS shall only be paid out of the assets and property of the
particular Fund involved.
7. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FMFS's control, except a loss
arising out of or relating to FMFS's refusal or failure to comply with
the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its duties
under this Agreement, the Trust shall indemnify and hold harmless FMFS
from and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any and
every nature (including reasonable attorneys' fees) which FMFS may
sustain or incur or which may be asserted against FMFS by any person
arising out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims,
demands, losses, expenses, and liabilities arising out of or relating
to FMFS's refusal or failure to comply with the terms of this Agreement
or from bad faith, negligence or from willful misconduct on its part in
performance of its duties under this Agreement, (i) in accordance with
the foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to FMFS by any duly authorized officer of the
Trust, such duly authorized officer to be included in a list of
authorized officers furnished to FMFS and as amended from time to time
in writing by resolution of the Board of Trustees of the Trust.
FMFS shall indemnify and hold the Trust harmless from and against
any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Trust may sustain or
incur or which may be asserted against the Trust by any person arising
out of any action taken or omitted to be taken by FMFS as a result of
FMFS's refusal or failure to comply with the terms of this Agreement,
its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FMFS's control. FMFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FMFS. FMFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency use
of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled
to inspect FMFS's premises and operating capabilities at any time
during regular business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee harmless,
the indemnitor shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further
understood that the indemnitee will use all reasonable care to notify
the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim which may be the subject of this
indemnification. In the event that the indemnitor so elects, it will so
notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. Indemnitee shall in no
case confess any claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee except with the
indemnitor's prior written consent.
C. FMFS is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument of the Trust
and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the Trust and its assets,
and if the liability relates to one or more series, the obligations
hereunder shall be limited to the respective assets of such series.
FMFS further agrees that it shall not seek satisfaction of any such
obligation from the shareholder or any individual shareholder of a
series of the Trust, nor from the Trustees or any individual Trustee of
the Trust.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and prior, present, or potential
shareholders of the Trust (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where FMFS may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Trust.
9. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will continue in
effect for a period of three years. During the initial three year term of this
Agreement, if the Trust terminates any services with FMFS, the Trust agrees to
compensate Firstar an amount equal to the fees remaining under the initial three
year Agreement. Subsequent to the initial three year term, this Agreement may be
terminated by either party upon giving ninety (90) days prior written notice to
the other party or such shorter period as is mutually agreed upon by the
parties. However, this Agreement may be amended by mutual written consent of the
parties.
10. RECORDS
FMFS shall keep records relating to the services to be performed hereunder, in
the form and manner, and for such period as it may deem advisable and is
agreeable to the Trust but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act,
and the rules thereunder. FMFS agrees that all such records prepared or
maintained by FMFS relating to the services to be performed by FMFS hereunder
are the property of the Trust and will be preserved, maintained, and made
available in accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Trust on and in accordance with its request.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed in a manner inconsistent
with the 1940 Act or any rule or regulation promulgated by the SEC thereunder.
12. DUTIES IN THE EVENT OF TERMINATION
In the event that in connection with termination, a successor to any of FMFS's
duties or responsibilities hereunder is designated by the Trust by written
notice to FMFS, FMFS will promptly, upon such termination and at the expense of
the Trust transfer to such successor all relevant books, records, correspondence
and other data established or maintained by FMFS under this Agreement in a form
reasonably acceptable to the Trust (if such form differs from the form in which
FMFS has maintained the same, the Trust shall pay any expenses associated with
transferring the same to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from FMFS's
personnel in the establishment of books, records and other data by such
successor.
13. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS to act as
agent for the other party to this Agreement, or to conduct business in the name
of, or for the account of the other party to this Agreement.
14. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FMFS, shall furnish to FMFS the data
necessary to perform the services described herein at such times and in such
form as mutually agreed upon. If FMFS is also acting in another capacity for the
Trust, nothing herein shall be deemed to relieve FMFS of any of its obligations
in such capacity.
15. NOTIFICATION OF ERROR
The Trust will notify FMFS of any balancing or control error caused by FMFS the
later of: within three (3) business days after receipt of any reports rendered
by FMFS to the Trust; within three (3) business days after discovery of any
error or omission not covered in the balancing or control procedure, or within
three (3) business days of receiving notice from any shareholder.
16. NOTICES
Notices of any kind to be given by either party to the other party shall be in
writing and shall be duly given if mailed or delivered as follows: Notice to
FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
Muhlenkamp & Co., Inc.
12300 Perry Highway, Suite 306
Wexford, PA 15090-8318
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the day
and year first written above.
WEXFORD TRUST FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: _______________________________
Attest: __________________________ Attest:____________________________
Exhibit A
Effective April 1, 1999
MUHLENKAMP FUND
A SERIES OF THE WEXFORD TRUST
Fund Accounting Services
Annual Fee Schedule
DOMESTIC EQUITY FUNDS:
$22,000 for the first $40 million
1 basis point on the next $200 million
1/2 basis point on the balance
ALL FEES ARE BILLED MONTHLY PLUS OUT-OF-POCKET EXPENSES, INCLUDING PRICING
SERVICE:
Domestic and Canadian Equities $.15
Options $.15
Corp/Govt/Agency Bonds $.50
CMO's $.80
International Equities and Bonds $.50
Municipal Bonds $.80
Money Market Instruments $.80
Fees and out-of-pocket expenses are billed to the fund monthly
Extraordinary services - quoted separately
NOTE - All schedules subject to change depending upon the use of derivatives -
options, futures, short sales, etc.
INDEPENDENT AUDITORS' CONSENT
To the Trustees of the Wexford Trust and
Shareholders of Muhlenkamp Fund:
We consent to the incorporation by reference in Post-Effective Amendment No. 19
to Registration Statement No. 33-20158 of Muhlenkamp Fund, of our report dated
January 31, 2000 incorporated by reference in the Prospectus, which is a part of
such Registration Statement, and to the reference to us under the heading
"Financial Highlights" in such Prospectus.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
February 29, 2000
