<PAGE> 1
Registration Nos. 33-35190 and 811-6114
As filed with the Securities and Exchange Commission on December 17, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 16
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY [X]
ACT OF 1940
Amendment No. 15
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AMERICAN PERFORMANCE FUNDS
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(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road, Columbus, Ohio 43219
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
800-762-7085
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THOMAS E. LINE, Treasurer
American Performance Funds
3435 Stelzer Road, Columbus, Ohio 43219
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(Name and Address of Agent for Service)
COPIES OF COMMUNICATIONS TO:
Martin E. Lybecker, Esquire
Ropes & Gray
1301 K Street, N.W., Washington, D.C. 20005
It is proposed that this filing become effective (check appropriate box)
[X] Immediately upon filing pursuant to paragraph (b)
[ ] On [Date] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] On (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485
If appropriate check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
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<PAGE> 2
CROSS REFERENCE SHEET
PROSPECTUS FOR AMERICAN PERFORMANCE MONEY MARKET FUNDS
<TABLE>
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Form N-1A Part A Item Prospectus Caption
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<S> <C>
1. Cover Page Cover Page
2. Synopsis Fee Table
3. Condensed Financial Information Financial Highlights;
General Information - Performance
Information
4. General Description Cover Page;
of Registrant Investment Objectives; Investment
Policies; Investment Restrictions;
General Information - Description
of the Funds and their Shares
5. Management of the Fund Management of the Money Market
Funds
5A. Management's Discussion of Fund See Registrant's current Annual
Performance Report
6. Capital Stock and How to Purchase
Other Securities Shares; How to Redeem Shares;
Sales Charges; Dividends; Federal
Income Taxes; General
Information - Description of the
Funds and their Shares; General
Information - Miscellaneous
7. Purchase of Securities Valuation of Shares; How
Being Offered to Purchase Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Inapplicable
</TABLE>
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<TABLE>
<S> <C>
American For performance, purchase,
Performance and
MONEY MARKET redemption information, call
Funds (800) 762-7085
Two Stable Net Asset Value 3435 Stelzer Road
Investment Portfolios of Columbus, Ohio 43219
American Performance Funds
</TABLE>
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PROSPECTUS
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The American Performance Money Market Funds (the "Money Market Funds") are
two stable net asset value portfolios of the AMERICAN PERFORMANCE FUNDS (the
"Funds"), a diversified open-end management investment company which currently
consists of ten separately managed portfolios. All securities or instruments in
which the Money Market Funds invest have remaining maturities of 397 days or
less, although obligations subject to repurchase agreements and certain variable
and floating rate instruments may bear longer maturities. Each Money Market Fund
seeks current income with liquidity and stability of principal.
AMERICAN PERFORMANCE U.S. TREASURY FUND (the "U.S. Treasury Fund") invests
exclusively in U.S. Treasury bills, notes, and other obligations backed by the
full faith and credit of the U.S. government, some of which may be subject to
repurchase agreements.
AMERICAN PERFORMANCE CASH MANAGEMENT FUND (the "Cash Management Fund")
invests in U.S. dollar-denominated, high quality, short-term debt and other
short-term obligations of high quality.
(Continued on following page)
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AN INVESTMENT IN THE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE MONEY MARKET FUNDS WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
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THE FUNDS' SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY, BANK OF OKLAHOMA, N.A. OR ANY OF ITS AFFILIATES. THE FUNDS' SHARES ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR BY ANY OTHER AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY SUCH STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is December 17, 1997.
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(Continued from previous page)
Bank of Oklahoma, N.A., Tulsa, Oklahoma ("BOK") serves as investment
adviser ("Investment Adviser") to the Money Market Funds. AMR Investment
Services, Inc. ("AMR") serves as investment sub-adviser ("Sub-Adviser") to the
Cash Management Fund. BISYS Fund Services, Columbus, Ohio ("BISYS" or the
"Distributor") acts as the Administrator and Distributor to the Money Market
Funds.
This Prospectus relates only to the Money Market Funds. The Funds also
include four bond portfolios to which BOK serves as Investment Adviser: the
American Performance Bond Fund, the American Performance Intermediate Bond Fund,
and the American Performance Short-Term Income Fund, each of which seeks current
income, and the American Performance Intermediate Tax-Free Bond Fund, which
seeks current income exempt from Federal taxation, through investing in
diversified portfolios of bonds and other fixed income securities (collectively,
the "American Performance Bond Investment Funds"). The Funds also include four
equity portfolios to which BOK serves as Investment Adviser: the American
Performance Equity Fund and the American Performance Aggressive Growth Fund,
each of which seeks growth of capital and, secondarily, income through investing
primarily in common stocks and securities convertible into common stocks, the
American Performance Balanced Fund, which seeks current income and, secondarily,
long-term capital growth by investing primarily in a broadly diversified
portfolio of securities, including common stocks, preferred stocks and bonds and
the American Performance Growth Equity Fund, which seeks long-term capital
appreciation income by investing primarily in a diversified portfolio of common
stocks and securities convertible into common stocks (collectively, the
"American Performance Equity Investment Funds"). Persons who wish to obtain a
copy of the Prospectus for the American Performance Bond Investment Funds or the
American Performance Equity Investment Funds may contact the Funds at the
telephone number shown above.
A Statement of Additional Information bearing the same date as this
Prospectus, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. The Statement of Additional Information can be
obtained without charge by writing to or calling the Funds at the address or
telephone number shown above.
This Prospectus sets forth concisely the information about the Money Market
Funds that a prospective investor should know before investing. Investors should
read this Prospectus and retain it for future reference.
TABLE OF CONTENTS
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PAGE
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Fee Table................................................................... 3
Financial Highlights........................................................ 5
Investment Objective........................................................ 6
Investment Policies and Special Considerations.............................. 7
Other Investment Techniques of the Money Market Funds....................... 9
Investment Restrictions..................................................... 12
Valuation of Shares......................................................... 13
How to Purchase Shares...................................................... 14
Sales Charges............................................................... 16
Exchange Privilege.......................................................... 16
How to Redeem Shares........................................................ 17
Dividends................................................................... 19
Federal Income Taxes........................................................ 19
Distribution................................................................ 20
Management of the Money Market Funds........................................ 21
General Information......................................................... 24
</TABLE>
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2
<PAGE> 5
FEE TABLE
<TABLE>
<CAPTION>
U.S. TREASURY CASH MANAGEMENT
FUND FUND
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<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
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Maximum Sales Load Imposed on Purchases (as a percentage of offering
price).............................................................. 0% 0%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price)..................................................... 0% 0%
Deferred Sales Load (as a percentage of original purchase price or
redemption proceeds, if applicable)................................. 0% 0%
Redemption Fees(2) (as a percentage of amount redeemed, if
applicable)......................................................... 0% 0%
Exchange Fees......................................................... $ 0 $ 0
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------------
Management Fees..................................................... 0.40% 0.40%
12b-1 Fees(3) (after voluntary fee reductions)...................... 0% 0%
Other Expenses...................................................... 0.32% 0.32%
----- -----
Total Fund Operating Expenses(4) (after voluntary fee reduction)...... 0.72% 0.72%
===== =====
EXAMPLE:
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You would pay the following expenses on a $1,000 investment in each
of the Funds, assuming (1) 5% annual return and (2) redemption at
the end of each time period:
</TABLE>
<TABLE>
<CAPTION>
U.S. TREASURY CASH MANAGEMENT
FUND FUND
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<S> <C> <C>
1 Year................................................................ $ 7 $ 7
3 Years............................................................... $ 23 $ 23
5 Years............................................................... $ 40 $ 40
10 Years.............................................................. $ 89 $ 89
</TABLE>
The purpose of the above table is to assist a potential purchaser of Shares
of the U.S. Treasury Fund and the Cash Management Fund in understanding the
various costs and expenses that an investor in each Fund will bear directly or
indirectly. The examples reflect voluntary reductions of 12b-1 Fees. Although
the Distributor currently has agreed to these voluntary reductions, it may cease
to provide these reductions, which would have the effect of increasing the
expenses set forth above in the examples. Such expenses do not include any fees
charged by BOK or any of its affiliates to its customers' account which may have
invested in Shares of a Fund. See "MANAGEMENT OF THE MONEY MARKET FUNDS" and
"DISTRIBUTION" for a more complete discussion of the transaction expenses and
annual operating expenses of each Fund.
THE FOREGOING EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
- ------------
(1) Participating Organizations (as defined in "DISTRIBUTION") may charge a
Customer (as defined in "DISTRIBUTION") account fees for automatic
investment and other investment and trust services provided in connection
with investment in the Funds. (See "HOW TO PURCHASE SHARES.")
(2) A wire redemption charge may be deducted from the amount of a wire
redemption payment made at the request of a Shareholder. The current charge,
which is subject to change upon notice to Shareholders, is $15.00. (See "HOW
TO REDEEM SHARES -- By Telephone.")
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<PAGE> 6
(3) In order to reduce operating expenses, the Distributor has voluntarily
agreed to reduce the 12b-1 Fees. Absent a voluntary fee reduction, the 12b-1
Fees would be 0.25% of the average daily net assets for the U.S. Treasury
Fund and the Cash Management Fund, respectively.
(4) Absent a voluntary fee reduction, the Total Fund Operating Expenses would be
0.97% and 0.97% of the average daily net assets of the U.S. Treasury Fund
and the Cash Management Fund, respectively.
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4
<PAGE> 7
FINANCIAL HIGHLIGHTS
The American Performance Funds were organized as a Massachusetts business trust
and began active operations in August of 1990. The Funds currently consist of
ten series of units of beneficial interest ("Shares"). Two such series represent
interests in the U.S. Treasury Fund and the Cash Management Fund.
The Tables below set forth certain financial highlights for the U.S. Treasury
Fund and the Cash Management Fund for the periods indicated. The most recent
five years of each Table are part of the Funds' financial statements which are
included in the Funds' Annual Report and are incorporated by reference into the
Statement of Additional Information, which a Shareholder may obtain by calling
the Funds. The financial statements have been audited by KPMG Peat Marwick LLP,
independent public accountants for the Funds, whose report thereon, is included
in the Funds' Annual Report.
<TABLE>
<CAPTION>
CASH MANAGEMENT FUND
----------------------------------------------------------------------------------
SEPTEMBER 21,
YEAR ENDED AUGUST 31, 1990 TO
------------------------------------------------------------------ AUGUST 31,
1997 1996 1995 1994 1993 1992 1991(a)
-------- -------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------- -------
INVESTMENT ACTIVITIES
Net investment income.... 0.049 0.050 0.052 0.030 0.028 0.042 0.063
Net realized loss on
investments............ (0.10) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------
DISTRIBUTIONS
Net investment income.... (0.049) (0.050) (0.052) (0.030) (0.028) (0.042) (0.063)
Capital Transaction...... 0.010
-------- -------- -------- -------- -------- -------- -------
NET ASSET VALUE, END OF
PERIOD..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------- -------
Total Return................. 5.05%(d) 5.14% 5.30% 3.08% 2.87% 4.38% 6.55%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of
period (000)........... $331,095 $375,797 $194,807 $195,490 $167,269 $152,652 $95,962
Ratio of expenses to
average net assets..... 0.72% 0.71% 0.74% 0.78% 0.78% 0.79% 0.76%(b)
Ratio of net investment
income to average net
assets................. 4.93% 5.01% 5.18% 3.05% 2.80% 4.14% 6.75%(b)
Ratio of expenses to
average net assets*.... 0.97% 0.96% 0.99% 0.98% 0.98% 1.03% 1.01%(b)
Ratio of net investment
income to average net
assets*................ 4.68% 4.76% 4.94% 2.85% 2.60% 3.91% 6.50%(b)
</TABLE>
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* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
(d) The total return includes the effect of a capital contribution of $0.010 per
share. The return without capital contribution would have been 4.05%.
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5
<PAGE> 8
<TABLE>
<CAPTION>
U.S. TREASURY FUND
------------------------------------------------------------------------------
SEPTEMBER 5,
YEAR ENDED AUGUST 31, 1990 TO
--------------------------------------------------------------- AUGUST 31,
1997 1996 1995 1994 1993 1992 1991(a)
-------- -------- -------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------- -------
INVESTMENT ACTIVITIES
Net investment income........ 0.046 0.047 0.048 0.028 0.025 0.038 0.061
-------- -------- -------- -------- -------- -------- -------
DISTRIBUTIONS
Net investment income........ (0.046) (0.047) (0.048) (0.028) (0.025) (0.038) (0.061)
-------- -------- -------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ======== =======
Total Return..................... 4.74% 4.85% 4.95% 2.87% 2.57% 3.91% 6.28%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of period
(000)...................... $298,424 $217,406 $187,007 $165,353 $169,428 $136,637 $ 95,585
Ratio of expenses to average
net assets................. 0.72% 0.74% 0.75% 0.81% 0.81% 0.81% 0.78%(b)
Ratio of net investment
income to average net
assets..................... 4.65% 4.74% 4.88% 2.81% 2.51% 3.65% 6.10%(b)
Ratio of expenses to average
net assets*................ 0.97% 0.99% 1.00% 1.01% 1.01% 1.04% 1.03%(b)
Ratio of net investment
income to average net
assets*.................... 4.40% 4.49% 4.63% 2.61% 2.31% 3.41% 5.85%(b)
</TABLE>
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* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
INVESTMENT OBJECTIVE
U.S. TREASURY FUND
The investment objective of the U.S. Treasury Fund is to seek current income
with liquidity and stability of principal by investing exclusively in short-term
obligations backed by the full faith and credit of the U.S. government, some of
which may be subject to repurchase agreements.
CASH MANAGEMENT FUND
The investment objective of the Cash Management Fund is to seek current income
with liquidity and stability of principal by investing in money market
instruments which are considered by the Board of Trustees to present minimal
credit risks.
BOTH MONEY MARKET FUNDS
All securities or instruments in which either of the Money Market Funds invests
are valued based on the amortized cost valuation technique pursuant to Rule 2a-7
under the Investment Company Act of 1940, as amended (the "1940 Act"). All
instruments in which either of the Money Market Funds invests will have
remaining maturities of 397 days or less, although instruments subject to
repurchase agreements and certain variable or floating rate obligations may bear
longer maturities. The average dollar-weighted maturity of the securities in
each of the Money Market Funds will not exceed 90 days.
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<PAGE> 9
Obligations purchased by the Money Market Funds are limited to U.S.
dollar-denominated obligations which the Board of Trustees has determined
present minimal credit risks. See the Statement of Additional Information for an
explanation of the amortized cost valuation method.
Although the U.S. Treasury Fund and the Cash Management Fund have similar
investment objectives, their particular portfolio securities and yields will
differ due to differences in the types of permitted investments, cash flow, and
the availability of particular portfolio investments. The investment objective
with respect to each of the Money Market Funds is fundamental and may not be
changed without a vote of the holders of a majority of the outstanding Shares
(as defined in "GENERAL INFORMATION--Miscellaneous") of the respective Fund.
There can be, of course, no assurance that either of the Money Market Funds will
achieve its investment objective.
Additionally, the Money Market Funds may engage in certain investment techniques
which may subject the Funds to certain risks (see "OTHER INVESTMENT TECHNIQUES
OF THE MONEY MARKET FUNDS").
INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS
U.S. TREASURY FUND
The U.S. Treasury Fund will invest exclusively in obligations backed by the full
faith and credit of the U.S. government and at least 65% of the Fund's total
assets will be invested in direct U.S. Treasury obligations, some of which may
be subject to repurchase agreements. Such obligations may include "stripped"
U.S. Treasury obligations such as Treasury Receipts issued by the U.S. Treasury
representing either future interest or principal payments. Stripped securities
are issued at a discount to their "face value," and may exhibit greater price
volatility than ordinary debt securities because of the manner in which their
principal and interest are returned to investors. Obligations purchased by the
U.S. Treasury Fund may be subject to repurchase agreements.
CASH MANAGEMENT FUND
The Fund may invest in (1) obligations of the U.S. government or its agencies or
instrumentalities; (2) commercial paper, loan participation interests,
medium-term notes, asset-backed securities and other promissory notes, including
floating or variable rate obligations; and (3) domestic, Yankeedollar and
Eurodollar certificates of deposit, time deposits, bankers' acceptances, bearer
deposit notes and promissory notes including floating or variable rate
obligations issued by U.S. or foreign bank holding companies and their bank
subsidiaries, branches and agencies. The Fund will invest only in issuers or
instruments that at the time of purchase (1) have received the highest
short-term rating by at least two nationally recognized statistical ratings
organizations ("NRSROs") (e.g., "A-1" by Standard & Poor's Corporation and
"Prime-1" by Moody's Investors Services, Inc.); or (2) are single rated and have
received the highest short-term rating by a NRSRO; or (3) are unrated, but are
determined to be of comparable quality by the Investment Adviser pursuant to
guidelines approved by the Board of Trustees and subject to the ratification of
the Board of Trustees. See the Statement of Additional Information for
definitions of the foregoing instruments and rating systems.
The Fund will concentrate its investments in obligations issued by the banking
industry. Concentration in this context means the investment of more than 25% of
the Fund's assets in such investments.
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<PAGE> 10
However, for temporary defensive purposes during periods when the Investment
Adviser believes that maintaining this concentration may be inconsistent with
the best interest of Shareholders, the Fund will not maintain this
concentration. Concentration in obligations issued by commercial banks and bank
holding companies will involve a greater exposure to economic, business,
political, or regulatory changes that are generally adverse to banks and bank
holding companies. Such changes could include significant changes in interest
rates, general declines in bank asset quality, including real estate loans, and
the imposition of costly or otherwise burdensome government regulations or
restrictions. The Fund will not purchase securities issued by BOK or any of its
affiliates.
Investments in Eurodollar and Yankeedollar obligations involve additional risks
not present with domestic securities. Most notably, there generally is less
publicly available information about foreign companies; there may be less
governmental regulation and supervision; they may use different accounting and
financial standards; and the adoption of foreign governmental restrictions might
adversely affect the payment of principal and interest on foreign investments.
In addition, not all foreign branches of U.S. banks are supervised or examined
by regulatory authorities as are U.S. banks, and such branches may not be
subject to reserve requirements.
Obligations issued or guaranteed by U.S. government agencies or
instrumentalities in which the Cash Management Fund may invest can vary
significantly in terms of the credit risk involved. Obligations of certain
agencies and instrumentalities of the U.S. government such as the Government
National Mortgage Association and the Export-Import Bank of the United States,
are supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal National Mortgage Association, are supported by the right
of the issuer to borrow from the U.S. Treasury; others, such as those of the
Student Loan Marketing Association, are supported by the discretionary authority
of the U.S. government to purchase the agency's obligations; still others, such
as those of the Federal Farm Credit Banks or the Federal Home Loan Mortgage
Corporation, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. government would provide financial support
to U.S. government-sponsored agencies or instrumentalities if it is not
obligated to do so by law. The Cash Management Fund will invest in the
obligations of such agencies or instrumentalities only when the Investment
Adviser deems the credit risk with respect thereto to be minimal.
Investments in loan participation interests are generally not traded in a
secondary market and are regarded by the Funds as illiquid; the Cash Management
Fund intends to limit investments in loan participation interests to 5% of its
total assets.
Variable amount master demand notes in which the Cash Management Fund may invest
are unsecured demand notes that permit the indebtedness thereunder to vary, and
provide for periodic adjustments in the interest rate according to the terms of
the instrument. Because master demand notes are direct lending arrangements
between the Cash Management Fund and the issuer, they are not normally traded.
Although there is no secondary market for the notes, the Cash Management Fund
may demand payment of principal and accrued interest at any time. The period of
time remaining until the principal amount actually can be recovered under a
variable amount master demand note generally shall not exceed seven days. To the
extent such maximum period were exceeded, the note in question would be
considered illiquid. While the notes are not typically rated by credit rating
agencies, issuers of variable amount master demand notes (which are normally
manufacturing, retail, financial, and other business
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<PAGE> 11
concerns) must satisfy the same criteria as set forth above for commercial
paper. The Cash Management Fund will invest in variable amount master demand
notes only where such notes are determined by its Investment Adviser pursuant to
guidelines established by the Funds' Board of Trustees to be of comparable
quality to rated issuers or instruments eligible for investment by the Cash
Management Fund. The Investment Adviser will consider the earning power, cash
flow, and other liquidity ratios of the issuers of such notes and will
continuously monitor their financial status and ability to meet payment on
demand. In determining average weighted portfolio maturity, a variable amount
master demand note will be deemed to have a maturity equal to the longer of the
period of time remaining until the next readjustment of the interest rate or the
period of time remaining until the principal amount can be recovered from the
issuer through demand.
The Cash Management Fund may acquire puts with respect to obligations in its
portfolio and sell those puts in conjunction with a sale of those obligations.
See the Statement of Additional Information for more information regarding puts.
OTHER INVESTMENT TECHNIQUES OF THE MONEY MARKET FUNDS
MORTGAGE-RELATED SECURITIES
The Money Market Funds may purchase mortgage-related securities representing
pools of mortgage loans assembled for sale to investors. The U.S. Treasury Fund
will invest only in mortgage-related securities backed by the full faith and
credit of the U.S. government. The Cash Management Fund may also invest in such
instruments and, in addition, may invest in mortgage-backed securities issued
and/or guaranteed only by U.S. government agencies or instrumentalities, or by
private issuers such as commercial banks, savings and loan institutions,
mortgage bankers, and private mortgage insurance companies. Although certain
mortgage-related securities are guaranteed by a third party, or otherwise
similarly secured, the market value of the security, which may fluctuate is not
so secured. If a Money Market Fund purchases a mortgage-related security at a
premium, that premium may be lost if there is a decline in the market value of
the security whether resulting from changes in interest rates or prepayments in
the underlying mortgage collateral. As with other interest-bearing securities,
the prices of such securities are inversely affected by changes in interest
rates. However, though the value of a mortgage-related security may decline when
interest rates rise, the converse is not necessarily true since in periods of
declining interest rates, the mortgages underlying the securities are prone to
prepayment. For this and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to the Fund holding the security. In addition, regular payments received in
respect of mortgage related securities include both interest and principal. No
assurance can be given as to the return the Money Market Fund holding a
mortgage-related security will receive when these amounts are reinvested. The
Cash Management Fund also may invest in collateralized mortgage obligations
structured on pools of mortgage pass-through certificates or mortgage loans. For
further discussion concerning the investment considerations involved, see
"INVESTMENT OBJECTIVE AND POLICIES--Additional Information on Fund
Instruments--Mortgage-Related Securities" in the Statement of Additional
Information.
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<PAGE> 12
REPURCHASE AGREEMENTS
Securities held by a Money Market Fund may be subject to repurchase agreements.
Under the terms of a repurchase agreement, a Money Market Fund would acquire
securities from financial institutions such as member banks of the Federal
Deposit Insurance Corporation or registered broker-dealers which the Investment
Adviser deems creditworthy under guidelines approved by the Funds' Board of
Trustees, subject to the seller's agreement to repurchase such securities at a
mutually agreed upon date and price. The repurchase price would generally equal
the price paid by the Money Market Fund plus interest negotiated on the basis of
current short-term rates, which may be more or less than the rate on the
underlying portfolio securities. The seller under a repurchase agreement will be
required to maintain the value of collateral held pursuant to the agreement at
not less than the repurchase price (including accrued interest) and the
Investment Adviser possessing investment authority will monitor the collateral's
value to ensure that it equals or exceeds the repurchase price. In addition,
securities subject to repurchase agreements will be held in a segregated account
by the Custodian or a Sub-Custodian of the Fund. Repurchase agreements are
considered to be loans by an investment company under the 1940 Act. See the
Statement of Additional Information for more information regarding this
investment practice.
WHEN-ISSUED SECURITIES
The Money Market Funds may purchase securities on a when-issued basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield and thereby involve a risk that the
yield obtained in the transaction will be less than those available in the
market when delivery takes place. A Money Market Fund will generally not pay for
such securities or start earning interest on them until they are received. When
a Money Market Fund agrees to purchase such securities, its Custodian will set
aside cash or liquid securities equal to the amount of the commitment in a
separate account. Securities purchased on a when-issued basis are recorded as an
asset and are subject to changes in value based upon changes in the general
level of interest rates. Each Money Market Fund expects that commitments to
purchase when-issued securities will not exceed 25% of the value of its total
assets absent unusual market conditions. In the event that its commitments to
purchase when-issued securities ever exceeded 25% of the value of its assets, a
Money Market Fund's liquidity and the ability of the Investment Adviser to
manage it might be severely affected. No Money Market Fund intends to purchase
when-issued securities for speculative purposes but only in furtherance of its
investment objective.
REVERSE REPURCHASE AGREEMENTS
The Money Market Funds may borrow funds for temporary purposes by entering into
reverse repurchase agreements in accordance with the investment restrictions
described below. Pursuant to such agreements, a Money Market Fund would sell
portfolio securities to financial institutions such as banks and broker-dealers
and agree to repurchase them at a mutually agreed-upon date and price. At the
time a Money Market Fund enters into a reverse repurchase agreement, it will
place in a segregated custodial account assets such as liquid high quality
securities, consistent with the Fund's investment objective having a value not
less than 100% of the repurchase price (including accrued interest), and will
subsequently monitor the account to ensure that such required value is
maintained. Reverse repurchase agreements involve the risk that the market value
of the securities sold by a Money Market Fund may
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decline below the price at which such Fund is obligated to repurchase the
securities. Reverse repurchase agreements are considered to be borrowings by an
investment company under the 1940 Act.
SECURITIES LENDING
In order to generate additional income, a Money Market Fund may, from time to
time, lend its portfolio securities to broker-dealers, banks, or institutional
borrowers of securities. The Funds will enter into loan agreements only with
broker-dealers, banks, or institutions that BOK has determined are creditworthy
under guidelines established by the Funds' Board of Trustees. The Money Market
Funds intend to limit their securities lending to 5% of their respective total
assets. See the Statement of Additional Information for more information on
these investment activities.
PRIVATE PLACEMENT INVESTMENTS
The Money Market Funds may invest in commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933 (the "Securities Act"), and resold to
qualified institutional buyers under Securities Act Rule 144A ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition under the federal
securities laws, and generally is sold to institutional investors such as the
Funds who agree that they are purchasing the paper for investment and not with a
view to public distribution. Any resale by the purchaser must be in an exempt
transaction and may be accomplished in accordance with Rule 144A. Section 4(2)
paper normally is resold to other institutional investors like the Funds through
or with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. The Money Market Funds will
not invest more than 10% of their respective assets in Section 4(2) paper and
illiquid securities unless the Investment Adviser determines, by continuous
reference to the appropriate trading markets and pursuant to guidelines approved
by the Board of Trustees, that any Section 4(2) paper held by such Money Market
Fund in excess of this level is at all times liquid.
Because it is not possible to predict with assurance exactly how this market for
Section 4(2) paper sold and offered under Rule 144A will develop, the Board of
Trustees and the Investment Adviser, pursuant to the guidelines approved by the
Board of Trustees, will carefully monitor the Money Market Funds' investments in
these securities, focusing on such important factors, among others, as
valuation, liquidity, and availability of information. Investments in Section
4(2) paper could have the effect of reducing the Money Market Funds' liquidity
to the extent that qualified institutional buyers become for a time not
interested in purchasing these restricted securities.
ASSET-BACKED SECURITIES
The Cash Management Fund may invest in securities backed by automobile
receivables and creditcard receivables and other securities backed by other
types of receivables or other assets. Credit support for assetbacked securities
may be based on the underlying assets and/or provided through credit
enhancements by a third party. Credit enhancement techniques include letters of
credit, insurance bonds, limited guarantees (which are generally provided by the
issuer), senior-subordinated structures and over-collateralization. The Cash
Management Fund will only purchase an asset-backed security if it
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is rated within the three highest ratings categories assigned by a NRSRO (e.g.,
at least "A" by S&P or Moody's). Asset-backed securities are generally
considered to be illiquid.
INVESTMENT RESTRICTIONS
The U.S. Treasury Fund and the Cash Management Fund are subject to a number of
fundamental investment restrictions that may be changed with respect to a
particular Money Market Fund only by a vote of a majority of the outstanding
Shares of such Money Market Fund (see "GENERAL INFORMATION--Miscellaneous").
U.S. TREASURY FUND
The U.S. Treasury Fund may not purchase securities other than U.S. Treasury
bills, notes and other obligations backed by the full faith and credit of the
U.S. government, some of which may be subject to repurchase agreements.
BOTH MONEY MARKET FUNDS
The U.S. Treasury Fund and the Cash Management Fund may not:
1. Purchase securities of any one issuer, other than obligations issued or
guaranteed by the U.S. government (and, with respect to the Cash Management
Fund, other than obligations issued or guaranteed by the U.S. government or
its agencies or instrumentalities) if, as a result, with respect to 75% of
its portfolio, more than 5% of the value of each Fund's total assets would be
invested in such issuer.*
2. Purchase any securities which would cause more than 25% of the value of each
Fund's total assets at the time of purchase to be invested in securities of
one or more issuers conducting their principal business activities in the
same industry, provided that (a) there is no limitation with respect to
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities, obligations issued by commercial banks and bank holding
companies, repurchase agreements secured by bank instruments or obligations
of the U.S. government or its agencies or instrumentalities and obligations
issued by commercial banks and bank holding companies primarily engaged in
the banking industry; (b) wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of their parents; and (c) utilities will
be divided according to their services. For example, gas, gas transmission,
electric and gas, electric, and telephone will each be considered a separate
industry.
3. Borrow money or issue senior securities, except that each Fund may borrow
from banks and enter into reverse repurchase agreements for temporary
purposes in amounts up to 10% of the value of its total assets at the time of
such borrowing; or mortgage, pledge, or hypothecate any assets,
- ---------------
* In addition, although not a fundamental investment restriction (and therefore
subject to change without a Shareholder vote), to the extent required by
rules of the Securities and Exchange Commission the U.S. Treasury Fund and
the Cash Management Fund each generally apply the above restriction with
respect to 100% of their portfolios.
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<PAGE> 15
except in connection with any such borrowing and in amounts not in excess of
the lesser of the dollar amounts borrowed or 10% of the value of such Fund's
total assets at the time of its borrowing. Neither Fund will purchase
securities while its borrowings (including reverse repurchase agreements)
exceed 5% of the total assets of such Fund.
4. Make loans, except that each Fund may purchase or hold debt instruments in
accordance with its investment objective and policies, may lend portfolio
securities in accordance with its investment objective and policies, and may
enter into repurchase agreements.
5. Enter into repurchase agreements with maturities in excess of seven days if
such investment, together with other instruments in such Fund which are not
readily marketable, exceeds 10% of such Fund's net assets.
6. Invest in securities of other investment companies except as they may be
acquired as part of a merger, consolidation, reorganization, or acquisition
of assets.
CASH MANAGEMENT FUND
The Cash Management Fund may not write or sell puts, calls, straddles, spreads
or combinations thereof except that the Cash Management Fund may acquire puts
with respect to obligations in its portfolio and sell those puts in conjunction
with a sale of those obligations. The Cash Management Fund will not:
(1) Acquire a put, if, immediately after such acquisition, over 5% of the total
value of the Cash Management Fund's assets would be subject to puts from
such issuer (except that the 5% limitation is inapplicable to puts that, by
their terms, would be readily exercisable in the event of a default in
payment of principal or interest on the underlying securities). For the
purpose of this investment restriction and the investment restriction
immediately below, a put will be considered to be from the party to whom
the Cash Management Fund will look for payment of the exercise price;
(2) Acquire a put that, by its terms, would be readily exercisable in the event
of a default in payment of principal and interest on the underlying
security or securities if immediately after that acquisition the value of
the security or securities underlying that put, when aggregated with the
value of any other securities issued or guaranteed by the issuer of the
put, would exceed 10% of the total value of the Cash Management Fund's
assets.
VALUATION OF SHARES
The net asset values of the Funds are determined and their Shares are priced as
of 12:00 (noon) Eastern time and as of the close of regular trading of the New
York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each Business
Day ("Valuation Time"). As used herein, a "Business Day" constitutes any day on
which the NYSE is open for trading, and the Federal Reserve Bank of Kansas City
is open, except days on which there are not sufficient changes in the value of a
Fund's portfolio securities that the Fund's net asset value might be materially
affected, or days during which no Shares are tendered for redemption and no
orders to purchase Shares are received. Currently, the NYSE or the Federal
Reserve Bank of Kansas City is closed on the following holidays: New Year's
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<PAGE> 16
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day and
Christmas Day. Net asset value per Share for purposes of pricing sales and
redemptions is calculated by dividing the value of a Money Market Fund's assets,
less its liabilities, by the number of such Money Market Fund's outstanding
Shares.
The assets in each Money Market Fund are valued based upon the amortized cost
method. Pursuant to the rules and regulations of the Securities and Exchange
Commission regarding the use of the amortized cost method, each Money Market
Fund will maintain a dollar-weighted average portfolio maturity of 90 days or
less and no security will have a remaining maturity in excess of 397 days,
although obligations subject to repurchase agreements and certain variable and
floating rate instruments may bear longer maturities.
Although each of the Money Market Funds seeks to maintain the net asset value
per Share at $1.00, there can be no assurance that this net asset value will be
maintained.
HOW TO PURCHASE SHARES
Shares of the Money Market Funds ("Shares") are sold on a continuous basis and
may be purchased directly from the Funds' Distributor, BISYS, either by mail, by
telephone, or by electronic transfer. Shares may also be purchased through a
bank or broker-dealer who has established a dealer agreement with the
Distributor. Except as described in "Auto Invest Plan" below, the minimum
initial purchase is $1,000, and the minimum for subsequent purchases is $100.
These minimums may be waived if purchases are made in connection with Individual
Retirement Accounts ("IRAs"), Keoghs, qualified pension plans or other employer
plans. For information on IRAs, Keoghs or similar plans, contact BOK at (918)
588-6586.
Shares of each Money Market Fund are purchased at the net asset value per Share
of each such Money Market Fund (see "VALUATION OF SHARES") next determined after
receipt by the Distributor of an order to purchase Shares in good form. An order
accepted after the last Valuation Time on any Business Day will be executed at
the net asset value determined as of the first Valuation Time on the next
Business Day. An order to purchase Shares will be deemed to have been received
and accepted by the Distributor only when federal funds with respect thereto are
available to the Funds' Custodian for investment. Federal funds are monies
credited to a bank's account with a Federal Reserve Bank. Payment for an order
to purchase Shares which is transmitted by federal funds wire will be available
the same day for investment by the Funds' Custodian, if received prior to 12:00
(noon) Eastern time. Payments transmitted by other means (such as by check drawn
on a member of the Federal Reserve System) will normally be converted into
federal funds within two banking days after receipt. The Funds strongly
recommend that investors of substantial amounts use federal funds to purchase
Shares.
BY MAIL
Investors may make an initial purchase of Shares of the Money Market Funds by
completing and signing an Account Registration form and mailing it, along with a
check (or other negotiable bank instrument or money order) for at least $1,000,
payable to the appropriate Money Market Fund, in care of the Funds' Custodian at
Bank of Oklahoma, N.A., Attention: American Performance Funds, Department 12,
Tulsa,
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<PAGE> 17
Oklahoma 74182. Subsequent purchases of Shares may be made at any time by
mailing a check (or other negotiable bank draft or money order) for at least
$100 to the above address.
Account Registration forms can be obtained by calling the Funds at (800)
762-7085.
BY TELEPHONE OR ELECTRONIC TRANSFER
If an investor's Account Registration form has been previously received by the
Distributor, investors may also purchase Shares of either of the Money Market
Funds by telephone or by electronic transfer to the Funds' Custodian. To place
an order by telephone, call the Funds toll-free at (800) 762-7085. Payment for
Shares ordered by telephone may be made by check and must be received by the
Funds' Custodian within the settlement requirements defined under the Securities
Exchange Act of 1934. Shares of the Funds ordered by telephone will be purchased
for the Shareholder's account when the order has been received and federal funds
with respect thereto are available to the Funds' Custodian for investment. Any
questions regarding current settlement requirements or electronic payment
instructions can be directed to the Funds at (800) 762-7085.
AUTO INVEST PLAN
The Funds offer an Auto Invest Plan which enables Shareholders of the Funds to
make regular monthly or quarterly purchases of Shares through automatic
deductions from their bank accounts. With Shareholder authorization, the
Transfer Agent deducts the amount specified from the Shareholder's bank account
which is then automatically invested in Shares at net asset value. The required
minimum initial investments when opening an account using the Auto Invest Plan
is $100; the minimum amount for subsequent investments in the Fund is $50. To
participate in the Auto Invest Plan, Shareholders should complete the
appropriate section of the Account Registration form which can be acquired by
calling (800) 762-7085. To change the Auto Invest instructions, a Shareholder
must submit a written request to the Distributor. A Shareholder may discontinue
the feature by submitting a written request to or by calling the Funds.
FUND DIRECT INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS")
A Fund Direct IRA enables individuals, even if they participate in an
employer-sponsored retirement plan, to establish their own retirement program.
IRA contributions may be tax-deductible and earnings are tax-deferred. Under the
Tax Reform Act of 1986, the tax deductibility of IRA contributions is restricted
or eliminated for individuals who participate in certain employer pension plans
and whose annual income exceeds certain limits. Existing IRAs and future
contributions up to the IRA maximums, whether deductible or not, still earn
income on a tax-deferred basis.
All IRA distribution requests must be made in writing to the Funds. Any
additional deposits to an IRA must distinguish the type and year of the
contribution. For more information on an IRA call the Funds at (800) 762-7085.
Shareholders are advised to consult a tax adviser on IRA contributions and
withdrawal requirements and restrictions.
OTHER INFORMATION REGARDING PURCHASES
Shares may also be purchased through procedures established by the Distributor
in connection with the requirements of qualified accounts maintained by or on
behalf of certain persons ("Customers") by
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Participating Organizations under the Funds' Distribution Plan (see
"DISTRIBUTION"). Shares of the Funds sold to a Participating Organization acting
on behalf of Customers will normally be held of record by the Participating
Organization, and it is the responsibility of the Participating Organization to
transmit purchase or redemption orders to the Distributor and to deliver funds
for the purchase thereof to the Custodian on a timely basis. Beneficial
ownership of Shares of the Funds will be reflected in the account statements
provided to customers by Participating Organizations.
Depending upon the terms of a particular Customer account, Participating
Organizations may charge a Customer account fees for services provided in
connection with investment in any Money Market Fund. Information concerning
these services and any charges can be obtained from the Participating
Organization. This Prospectus should be read in conjunction with any such
information so received.
In the case of orders for the purchase of Shares placed through a broker-dealer,
the applicable public offering price will be the net asset value as so
determined, but only if the broker-dealer receives the order prior to the
Valuation Time for that day and transmits it to the Distributor prior to the
Valuation Time for that day. The broker-dealer is responsible for transmitting
such orders promptly. If the broker-dealer fails to do so, the investor's right
to that day's closing price must be settled between the investor and the
broker-dealer. If the broker-dealer receives the order after the Valuation Time
for that day, the price will be based on the net asset value determined as of
the Valuation Time for the next day.
Each Money Market Fund reserves the right to reject any order for the purchase
of its Shares in whole or in part, including purchases made with foreign and
third party checks.
Every Shareholder will receive a confirmation of each new transaction in the
Shareholder's account, which will also show the total number of Shares of such
Fund owned by the Shareholder and the number of Shares being held in safekeeping
by the Transfer Agent for the account of the Shareholder. Shareholders may rely
on these confirmations in lieu of certificates. No certificates representing
Shares of any Fund will be issued.
SALES CHARGES
There is no sales charge imposed by the Funds in connection with the purchase of
Shares of the Money Market Funds. Sales charges apply to purchases of the seven
other Funds of the American Performance Funds.
EXCHANGE PRIVILEGE
Shareholders may exchange Shares of the Money Market Funds for Shares of any
other Funds of the American Performance Funds so long as they maintain the
respective minimum account balance in each such Fund in which they own Shares.
Exchanges made from the Money Market Funds to the American Performance Bond
Investment Funds and the American Performance Equity Investment Funds will be
subject to the applicable sales charge upon the exchange, up to a maximum of
5.00%. Exchanges made from either Money Market Fund into the other Money Market
Fund will be accomplished on the basis of current net asset value. An exchange
is considered to be a sale of Shares for federal income tax purposes on which a
Shareholder may realize a capital gain or loss. The
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<PAGE> 19
exchange privilege may only be exercised in states where the exchange may
legally be made. The Funds reserve the right to eliminate or to alter the terms
of this exchange offer upon sixty days' notice to Shareholders.
A Shareholder wishing to exchange his or her Shares may do so by contacting the
Funds at (800) 762-7085 or by providing written instructions to the Distributor.
Any Shareholder who wishes to make an exchange must have received a current
Prospectus of the Fund in which he or she wishes to invest before the exchange
will be effected.
HOW TO REDEEM SHARES
Shares may ordinarily be redeemed by mail or by telephone. Shareholders may
redeem their Shares without charge on any day that net asset value is calculated
(see "VALUATION OF SHARES"). However, all or part of a Customer's Shares may be
redeemed in accordance with instructions and limitations pertaining to his or
her account held at a Participating Organization.
BY MAIL
Shares may be redeemed by mail by sending a written request to the Distributor
in care of the Funds' Custodian at Bank of Oklahoma, N.A., Attention: American
Performance Funds, Department 12, Tulsa, Oklahoma 74182. The Distributor may
require a signature guarantee by an eligible guarantor institution. For purposes
of this policy, the term "eligible guarantor institution" shall include banks,
brokers, dealers, credit unions, securities exchanges and associations, clearing
agencies and savings associations as those terms are defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. The Distributor reserves the right to
reject any signature guarantee if (i) it has reason to believe that the
signature is not genuine, (ii) it has reason to believe that the transaction
would otherwise be improper, or (iii) the guarantor institution is a broker or
dealer that is neither a member of a clearing corporation nor maintains net
capital of at least $100,000. The signature guarantee requirements will be
waived if all of the following conditions apply: (1) the redemption check is
payable to the Shareholder(s) of record, and (2) the redemption check is mailed
to the Shareholder(s) at the address of record. The Shareholder may also have
the proceeds mailed or sent electronically to a commercial bank account
previously designated on the Account Registration form or by written instruction
to the Distributor. There is no charge for having redemption requests mailed to
a designated bank account.
BY TELEPHONE
Shares may be redeemed by telephone if the Account Registration form reflects
that the Shareholder has that capability. The Shareholder may have the proceeds
mailed to his or her address or mailed or sent electronically to a commercial
bank account previously designated on the Account Registration form. Under most
circumstances, payments will be transmitted on the next Business Day following
receipt of a valid request for redemption. Electronic payment requests may be
made by the Shareholder by calling the Funds at (800) 762-7085. The Transfer
Agent may reduce the amount of a wire redemption payment by the Custodian's
then-current wire redemption charge (presently $15.00). Neither the Distributor,
the Investment Adviser, the Sub-Adviser nor the Funds will be liable for any
losses, damages, expenses or costs arising out of any telephone transaction
(including exchanges and redemptions) effected in accordance with the Funds'
telephone transaction procedures, upon instruc-
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tions reasonably believed to be genuine. The Funds will employ procedures
designed to provide reasonable assurance that instructions communicated by
telephone are genuine; if these procedures are not followed, the Funds may be
liable for any losses due to unauthorized or fraudulent instructions. These
procedures include recording all phone conversations, sending confirmations to
Shareholders within 72 hours of the telephone transaction, verifying the account
number or tax identification number and sending redemption proceeds only to the
address of record or to a previously authorized account. If, due to temporary
adverse conditions, investors are unable to effect telephone transactions,
Shareholders may also mail the redemption request to the Distributor at the
address listed above under "HOW TO REDEEM SHARES--By Mail." The telephone
redemption option will be suspended for a period of 10 days following a
telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan enables Shareholders of the Fund to make regular
monthly or quarterly redemptions of Shares if their account has at least
$10,000. With Shareholder authorization, the Transfer Agent will automatically
redeem Shares at the net asset value on the dates of the withdrawal and have a
check in the amount specified mailed to the Shareholder. The required minimum
withdrawal is $100. To participate in the Systematic Withdrawal Plan,
Shareholders should call (800) 762-7085 for more information. Purchases of
additional Shares concurrent with withdrawals may be disadvantageous to certain
Shareholders because of tax liabilities. To change the Systematic Withdrawal
instructions, a Shareholder must submit a written request to the Distributor. A
Shareholder may discontinue the feature by submitting a written request to or by
calling the Funds.
OTHER INFORMATION REGARDING REDEMPTIONS
All redemption orders are effected at the net asset value per Share next
determined after receipt of a valid request for redemption, as described above.
Payment to Shareholders for Shares redeemed will be made within the settlement
requirements defined in the Securities Exchange Act of 1934, after receipt by
the Distributor of the request for redemption. However, to the greatest extent
possible, requests from Shareholders for payments upon redemption of Shares
received by the Distributor before 12:00 (noon) Eastern time, will be honored on
that Business Day or, if received after 12:00 (noon) Eastern time, on the
following Business Day, unless it would be disadvantageous to the Fund or its
Shareholders to sell or liquidate portfolio securities in an amount sufficient
to satisfy requests for payments in that manner.
At various times a Money Market Fund may be requested to redeem Shares for which
it has not yet received good payment. In such circumstances, the forwarding of
proceeds may be delayed for up to 15 days until payment has been collected for
the purchase of such Shares. The Money Market Funds intend to pay cash for all
Shares redeemed, but under abnormal conditions which make payment in cash
unwise, payment may be made wholly or partly in readily marketable portfolio
securities with a market value equal to the redemption price. In such cases, an
investor may incur brokerage costs in converting such securities to cash.
Due to the relatively high cost of handling small investments, each Money Market
Fund reserves the right to redeem, at net asset value, the Shares of any
Shareholder if, because of redemptions of Shares by or on behalf of the
Shareholder, the account of such Shareholder in any Money Market Fund has a
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<PAGE> 21
value of less than $500. Before any Money Market Fund exercises its right to
redeem such Shares and to send the proceeds to the Shareholder, the Shareholder
will be given notice that the value of the Shares in his or her account is less
than the minimum amount and will be allowed 60 days to make an additional
investment in such Fund in an amount which will increase the value of the
account to at least $500.
See the Funds' Statement of Additional Information--"ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION"--for examples of when the right of redemption may be
suspended.
DIVIDENDS
The net investment income of each Money Market Fund is declared daily and paid
monthly as a dividend to the respective Shareholders of each such Fund. Net
capital gain income (if any) is distributed at least once a year. Shares in the
Money Market Funds purchased before 12:00 (noon) Eastern time begin earning
dividends on the same Business Day. All Shares continue to earn dividends
through the day before their redemption. A Shareholder will automatically
receive all dividends from a Fund in additional full and fractional Shares of
such Fund at the net asset value as of the ex-dividend date, unless the
Shareholder elects to receive dividends in cash. Reinvested dividends receive
the same tax treatment as dividends paid in cash. Dividends are paid in cash not
later than seven Business Days after a Shareholder's complete redemption of his
Shares in a Money Market Fund. Such election, or any revocation thereof, must be
made in writing to the Distributor, BISYS Fund Services, 3435 Stelzer Road,
Columbus, Ohio 43219, and will become effective with respect to dividends paid
after its receipt by the Distributor.
Shareholders may elect to have all income, dividends, and capital gains
distributions paid by check or reinvested in the Fund. If you elect to receive
distributions paid by check and the check (1) is returned and marked as
"undeliverable" or (2) remains uncashed for six months, your payment election
will be changed automatically and your future dividend and capital gains
distribution will be reinvested in the Fund at the per share net asset value
determined as of the date of payment of the distribution. In addition, any
undeliverable check that remains uncashed for six months will be canceled and
reinvested in the Fund at the per share net asset value determined as of the
date of cancellation.
FEDERAL INCOME TAXES
Each of the Money Market Funds is treated as a separate entity for federal
income tax purposes. Each Fund intends to qualify as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the "Code"), and
intends to distribute on a current basis all of its net investment income and
net capital gains, if any, so that it is not required to pay federal income
taxes on amounts so distributed to Shareholders. In general, distributions,
whether paid in cash or additional shares, are taxable to Shareholders as
ordinary income. Shareholders will be advised at least annually as to the
federal income tax consequences of distributions made during the year.
The Money Market Funds do not expect to realize any long-term capital gains and,
therefore, do not foresee paying any "capital gain dividends" as described in
the Code.
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Dividends attributable to interest earned on obligations of the U.S. government
may not be exempt from state taxes even though the interest, if earned directly
by the Shareholders, would be exempt from such taxes. Shareholders should
consult their tax advisers for further information concerning state and local
taxes, which may differ from federal income tax rules.
Additional information regarding federal taxes is contained in the Statement of
Additional Information under "INVESTMENT OBJECTIVES AND POLICIES--Additional Tax
Information Concerning All the Funds." However, the foregoing and the material
in the Statement of Additional Information are only brief summaries of some of
the important tax considerations generally affecting the Funds and their
Shareholders. In addition, the foregoing discussion and the federal tax
information in the Statement of Additional Information are based on tax laws and
regulations which are in effect as of the date of this Prospectus; these laws
and regulations may subsequently change. Potential investors in a Money Market
Fund are urged to consult their tax advisers with special reference to their own
tax situation.
DISTRIBUTION
Shares of the Money Market Funds are sold on a continuous basis by the
Distributor for the Funds, BISYS Fund Services (the "Distributor"). Under the
Funds' Distribution and Shareholder Services Plan (the "Distribution Plan"), the
Money Market Funds will pay a monthly distribution fee (also referred to as a
12b-1 Fee) to the Distributor as compensation for its services in connection
with the Distribution Plan at an annual rate equal to the lesser of (1) such fee
as may from time to time be agreed upon in writing by the Funds and the
Distributor, or (2) twenty-five one-hundredths of one percent (0.25%) of the
average daily net assets of each of the Money Market Funds. The Distributor may
use the distribution fee to provide distribution assistance with respect to the
Money Market Funds' Shares or to provide Shareholder services to the holders of
the Money Market Funds' Shares ("Customers") purchased through financial
institutions and intermediaries, broker-dealers, or similar entities, including
affiliates or subsidiaries of the Distributor ("Participating Organizations")
pursuant to contractual arrangements with the Distributor under the Distribution
Plan.
The distribution fee will be payable without regard to whether the amount of the
fee is more or less than the actual expenses incurred in a particular year by
the Distributor in connection with distribution assistance or Shareholder
services rendered by the Distributor itself or incurred by the Distributor
pursuant to the contractual agreement entered into under the Distribution Plan.
The Glass-Steagall Act and other applicable laws generally prohibit banks from
engaging in the business of underwriting securities, but in general do not
prohibit banks from purchasing securities as agent for and upon the order of
customers. Accordingly, banks acting as Participating Organizations may provide
only those services which, in the banks' opinion, are consistent with the then
current legal requirements. It is possible, however, that future legislative,
judicial or administrative action affecting the securities activities of banks
will cause the Funds to alter or discontinue their arrangements with banks that
act as Participating Organizations, or change their method of operations. It is
not anticipated, however, that any change in the Funds' method of operations
would affect their net asset value per share or result in financial loss to any
customer. See the Statement of Additional Information for further information
regarding the Distribution Plan.
prospectus
20
<PAGE> 23
MANAGEMENT OF THE MONEY MARKET FUNDS
TRUSTEES OF THE FUNDS
Overall responsibility for management of the Money Market Funds rests with the
Board of Trustees of the Funds, who are elected by the Shareholders of the
Funds. The Funds will be managed by the Board of Trustees in accordance with the
laws of The Commonwealth of Massachusetts governing business trusts. There are
currently four Trustees, three of whom are not "interested persons" of the Funds
within the meaning of that term under the 1940 Act. The Board of Trustees, in
turn, elects the officers of the Funds to supervise actively the Funds'
day-to-day operations.
The Trustees of the Funds, their addresses, and principal occupations during the
past five years are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE FUNDS DURING PAST FIVE YEARS
- ------------------------- ---------------------- ---------------------------------------------------------
<S> <C> <C>
Walter B. Grimm* Chairman and Trustee From June, 1992 to present, employee of BISYS Fund
3435 Stelzer Road Services; From 1987 to June, 1992, President of Leigh
Columbus, Ohio 43219 Consulting/Investments (investment firm).
Michael J. Hall Trustee From December, 1995 to present, Vice President and Chief
7130 South Lewis Financial Officer, Worldwide Sports & Recreation, Inc.;
Suite 850 from January, 1994 to present, Vice President and Chief
Tulsa, Oklahoma 74136 Financial Officer, Pexco Holdings, Inc.; from 1991 to
December, 1993, Senior Vice President, Finance and
Administration, Chief Financial Officer, Treasurer, and
Director of Operations, Europe/Africa/Middle East
Region of T.D. Williamson, Inc. (a heavy equipment
manufacturer).
Perry A. Wimpey Trustee From January, 1992 to present, Local Financial and
4843 S. 69th East Avenue Regulatory Consultant; from June, 1985 to January,
Tulsa, Oklahoma 74145 1992, Senior Vice President and Chief Financial
Officer, ONEOK Inc. (an energy company).
I. Edgar Hendrix Trustee From June 1983 to present, Vice President and Treasurer,
8 East 3rd Street Parker Drilling Co.
Tulsa, Oklahoma 74103
</TABLE>
- ------------
*Indicates an "interested person" of the Funds as defined in the 1940 Act.
The Trustees of the Funds receive fees and are reimbursed for their expenses in
connection with each meeting of the Board of Trustees they attend. However, no
officer or employee of the Investment Adviser, the Sub-Adviser or the
Administrator of the Funds receives any compensation from the Funds for acting
as a Trustee. The officers of the Funds receive no compensation directly from
the Funds for performing the duties of their offices. BISYS receives fees from
the Funds for acting as Administrator and may receive additional income under
the Distribution Plan of the Funds.
INVESTMENT ADVISER
U.S. TREASURY FUND
BOK serves as the Investment Adviser to the U.S. Treasury Fund. BOK, the largest
trust company in the State of Oklahoma, is a subsidiary of BOK Financial
Corporation ("BOK Financial"). BOK Financial is controlled by its principal
shareholder, George B. Kaiser. Through its subsidiaries, BOK Financial provides
a full array of trust, commercial banking and retail banking services. Its
non-bank subsidiaries
prospectus
21
<PAGE> 24
engage in various bank-related services, including mortgage banking and
providing credit, life, accident, and health insurance on certain loans
originated by its subsidiaries.
BOK maintains offices in Tulsa and Oklahoma City and offers a variety of
services for both corporate and individual customers. Individual financial trust
services include personal trust management, administration of estates, and
management of individual investments and custodial accounts. For corporate
clients, the array of services includes management, administration and
recordkeeping of pension plans, thrift plans, 401(k) plans and master trust
plans. BOK has experience in providing investment advisory service to the Funds
and experience in managing collective investment funds with investment
portfolios and objectives comparable to those of the Funds. BOK also serves as
transfer agent and registrar for corporate securities, paying agent for
dividends and interest, and indenture trustee of bond issues. At December 31,
1996 BOK was responsible for approximately $8.1 billion in assets including
approximately $4.2 billion in assets under management and possessed average
equity capital of $322 million.
Subject to the general supervision of the Funds' Board of Trustees and in
accordance with the investment objective and restrictions of the U.S. Treasury
Fund, BOK reviews, supervises, and provides general investment advice regarding
the U.S. Treasury Fund's investment programs. Subject to the general supervision
of the Funds' Board of Trustees and in accordance with the investment objective
and restrictions of the U.S. Treasury Fund, BOK makes all final decisions with
respect to portfolio securities of the U.S. Treasury Fund, places orders for all
purchases and sales of the portfolio securities of the U.S. Treasury Fund, and
maintains the U.S. Treasury Fund's records directly relating to such purchases
and sales.
For the services provided and expenses assumed pursuant to the Investment
Advisory Agreement with the Funds regarding the U.S. Treasury Fund, BOK receives
a fee from the U.S. Treasury Fund, computed daily and paid monthly equaling the
lesser of (1) such fee as may from time to time be agreed upon in writing by the
Funds and BOK, or (2) forty one-hundredths of one percent (0.40%) of the Fund's
average daily net assets. BOK receives fee income from the Funds from several
other sources. (See "SALES CHARGES," "DISTRIBUTION," and "GENERAL
INFORMATION--Custodian and Transfer Agent.") BOK may periodically waive all or a
portion of its fee with respect to the U.S. Treasury Fund to increase the net
income of such Fund available for distribution as dividends. BOK has currently
established its investment advisory fee pertaining to the U.S. Treasury Fund at
forty one-hundredths of one percent (0.40%) of the U.S. Treasury Fund's average
daily net assets pursuant to agreements with the Funds.
For investment advisory services to the U.S. Treasury Fund for the fiscal year
ended August 31, 1997, the Fund paid BOK 0.40% of its average daily net assets.
CASH MANAGEMENT FUND
BOK serves as the Investment Adviser to the Cash Management Fund and AMR serves
as the Sub-Adviser, pursuant to a sub-investment advisory agreement between BOK
and AMR.
Subject to the general supervision of the Funds' Board of Trustees and BOK, and
in accordance with the investment objective and restrictions of the Cash
Management Fund, AMR performs the following
prospectus
22
<PAGE> 25
services: management of the Cash Management Fund, decisions with respect to
portfolio securities, placement of orders for all purchases and sales of the
portfolio securities of the Cash Management Fund, and maintenance of the Cash
Management Fund's records directly relating to such purchases and sales.
AMR is a wholly-owned subsidiary of AMR Corporation, the parent company of
American Airlines, Inc., organized in 1986 to provide business management,
advisory, administrative and asset management consulting services. As of
September 30, 1997 AMR assets under management (including assets under fiduciary
advisory control) totaled approximately $18.8 billion including approximately
$6.6 billion under active management and $12.2 billion as named fiduciary or
fiduciary adviser. Of the total, approximately $14.6 billion of assets are
related to AMR Corporation.
For the services provided and expenses assumed pursuant to its Investment
Advisory Agreement with the Funds regarding the Cash Management Fund, BOK
receives a fee from the Cash Management Fund, computed daily and paid monthly of
the lesser of (1) such fee as may from time to time be agreed upon in writing by
the Funds and BOK, or (2) forty one-hundredths of one percent (0.40%) of the
Fund's average daily net assets. Of this amount, BOK pays to AMR a fee, computed
daily and paid monthly, at the annual rate of fifteen one-hundredths of one
percent (0.15%) of the Cash Management Fund's average daily net assets, pursuant
to a sub-investment advisory agreement between BOK and AMR. BOK may periodically
waive all or a portion of its fee with respect to the Cash Management Fund to
increase the net income of such Fund available for distribution as dividends.
For investment advisory services to the Cash Management Fund for the fiscal year
ended August 31, 1997, the Fund paid BOK, 0.40% of its average daily net assets.
Of this amount, BOK paid AMR 0.15% of the Cash Management Fund's average daily
net assets.
ADMINISTRATOR AND DISTRIBUTOR
BISYS is the Administrator for each of the Funds and also acts as the Funds'
principal underwriter and Distributor (the "Administrator" or the "Distributor,"
as the context indicates). BISYS is a subsidiary of The BISYS Group, Inc., 150
Clove Road, Little Falls, New Jersey 07424, a publicly owned company engaged in
information processing, loan servicing and 401(k) administration and
recordkeeping services to and through banking and other financial organizations.
The Administrator generally assists in all aspects of the administration and
operation of the Money Market Funds.
For expenses assumed and services provided as Administrator pursuant to its
administration agreement with the Funds, BISYS is entitled to receive a fee from
each Money Market Fund, computed daily and paid periodically, at the lesser of
(1) such fee as may from time to time be agreed upon in writing by the Funds and
the Administrator, and (2) an annual rate of twenty one-hundredths of one
percent (0.20%) of each Money Market Fund's average daily net assets. The
Administrator may periodically waive all or a portion of its administrative fee
with respect to a Fund to increase the net income of the Fund available for
distribution as dividends.
For administration services to the U.S. Treasury Fund and the Cash Management
Fund for the fiscal year ended August 31, 1997, each Fund paid the Administrator
0.20% of its average daily net assets.
prospectus
23
<PAGE> 26
SUB-ADMINISTRATOR
BOK serves as the Sub-Administrator to the Funds pursuant to an agreement
between the Administrator and BOK. Pursuant to this agreement, BOK assumed many
of the Administrator's duties, for which BOK receives a fee, paid by the
Administrator, calculated at an annual rate of five one-hundredths of one
percent (0.05%) of each Fund's average net assets.
EXPENSES
The Investment Adviser, Sub-Adviser, and the Administrator each bear all
expenses in connection with the performance of their services, other than the
cost of securities (including brokerage commissions, if any) purchased for the
Funds. Each Money Market Fund bears the following expenses relating to its
respective operations: taxes, interest, any brokerage fees and commissions, fees
and travel expenses of the Trustees of the Funds, Securities and Exchange
Commission fees, state securities qualification fees, costs of preparing and
printing prospectuses for regulatory purposes and for distribution to current
Shareholders, outside auditing and legal expenses, advisory and administration
fees, fees and reasonable out-of-pocket expenses of the custodian and transfer
agent, expenses incurred for pricing securities owned by the particular Fund,
certain insurance premiums, costs of maintenance of the Funds' existence, costs
of Shareholders' and Trustees' reports and meetings, and any extraordinary
expenses incurred in each Fund's operation.
BANKING LAWS
BOK believes that it may perform the investment advisory services contemplated
by its agreement with the Funds and this Prospectus without violating the
Glass-Steagall Act. Future changes in federal or state statutes and regulations
relating to permissible activities of banks or bank holding companies and their
subsidiaries and affiliates as well as further judicial or administrative
decisions or interpretations of present and future statutes and regulations
could change the manner in which BOK could continue to perform such services for
the Funds. See "MANAGEMENT OF THE FUNDS--Glass-Steagall Act" in the Statement of
Additional Information for further discussion of applicable banking laws and
regulations.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
GENERAL INFORMATION
DESCRIPTION OF THE FUNDS AND THEIR SHARES
The Money Market Funds represent two separate series of units of beneficial
interest ("Shares") of American Performance Funds, a Massachusetts business
trust which was organized in October of 1987 and began active operations in
August of 1990. Each Share represents an equal proportionate interest in a Fund
with other Shares of the same series, and is entitled to such dividends and
distributions out of the income earned on the assets belonging to that Fund as
are declared at the discretion of the Trustees.
As of November 18, 1997, Bank of Oklahoma, N.A. (Bank of Oklahoma Tower, One
Williams Center, Tulsa, Oklahoma 74103) and its bank affiliates were the
Shareholders of record of 99.58% of the U.S.
prospectus
24
<PAGE> 27
Treasury Fund's Shares and 99.85% of the Cash Management Fund's Shares. As of
November 25, 1997, Bank of Oklahoma, N.A. and its bank affiliates possessed, on
behalf of its underlying accounts, voting or investment power with respect to
70.59% of the U.S. Treasury Fund's Shares and 56.55% of the Cash Management
Fund's Shares, and as a consequence, Bank of Oklahoma, N.A. and its bank
affiliates may be deemed to be a controlling person of the U.S. Treasury Fund
and the Cash Management Fund under the 1940 Act.
Shareholders are entitled to one vote for each Share, and a proportionate
fractional vote for any fraction of a Share, and will vote in the aggregate and
not by series except as otherwise expressly required by law.
Although the Funds are not required to hold annual meetings of Shareholders,
Shareholders have the right (1) to call a meeting to elect or remove one or more
of the Trustees of the Funds and (2) to be assisted by the Trustees in
communicating with other Shareholders of the Funds. Shareholder inquiries should
be directed to the Secretary of the Funds, at 3435 Stelzer Road, Columbus, Ohio
43219.
Overall responsibility for the management of the Funds is vested in the Board of
Trustees. See "MANAGEMENT OF THE MONEY MARKET FUNDS--Trustees of the Funds."
Individual Trustees are elected by the Shareholders and may be removed by the
Board of Trustees or Shareholders in accordance with the provisions of the
Declaration of Trust and By-laws of the Funds and Massachusetts law. See
"ADDITIONAL INFORMATION--Miscellaneous" in the Statement of Additional
Information for further information.
CUSTODIAN AND TRANSFER AGENT
Bank of Oklahoma, N.A. serves as custodian for the Funds. BISYS Fund Services
Ohio, Inc., an affiliate of BISYS, serves as the transfer agent ("Transfer
Agent") for the Funds and performs fund accounting.
PERFORMANCE INFORMATION
From time to time each Money Market Fund may present its "current yield" and
"effective yield." Both yield figures are based on historical earnings and are
not intended to indicate future performance. The "yield" of a Money Market Fund
refers to the income generated by an investment in the Money Market Fund over a
seven calendar-day period (which period will be stated in the advertisement).
This income is then "annualized." That is, the amount of income generated by the
investment during that week is assumed to be generated each week over a one-year
period and is shown as a percentage of the investment. The "effective yield" is
calculated similarly but, when annualized, the income earned by an investment in
a Money Market Fund is assumed to be reinvested. The "effective yield" will be
slightly higher than the "yield" because of the compounding effect of this
assumed reinvestment. Performance information for the Money Market Funds showing
their average annual total return and aggregate total return may also be
presented in advertisements, sales literature, and shareholder reports. Such
performance figures are based on historical earnings and are not intended to
indicate future performance. Total return will be calculated for the period
since the establishment of the Money Market Funds. Average annual total return
is measured by comparing the value of an investment in a Money Market Fund at
the beginning of the relevant period and the redemption value of the investment
at the end of the
prospectus
25
<PAGE> 28
period (assuming immediate reinvestment of any dividends or capital gains
distributions) and annualizing the result. Aggregate total return is measured
similarly to average annual total return, however, the resulting difference is
not annualized.
Investors may also judge the performance of other mutual funds with similar
investment objectives and other relevant indices. For example, the performance
of the Money Market Funds may be compared to the Donoghue's "Money Fund
Average", which is an average compiled by IBC/Donoghue's MONEY FUND REPORT(R) of
Holliston, MA 01746, a widely recognized independent publication that monitors
the performance of money market funds, to the average yields reported by the
Bank Rate Monitor from money market deposit accounts offered by the 50 leading
banks and thrift institutions in the top five standard metropolitan statistical
areas, or to data prepared by Lipper Analytical Services, Inc., as well as to
performance data as reported in publications such as Money Magazine, Forbes,
Barron's, The Wall Street Journal, The New York Times, Business Week, Pensions
and Investments, U.S.A. Today, Ibbotson Associates, Inc., Morningstar, Inc.,
CDA/Wiesenberger, American Banker, Fortune, Institutional Investor and local
newspapers. In addition to yield information, general information about these
Funds that appears in a publication such as those mentioned above may also be
quoted or reproduced in advertisements or in reports to Shareholders. Additional
performance information is contained in the Funds' Annual Report, which is
available free of charge by calling the telephone number on the front page of
the prospectus.
Yields will fluctuate and any quotation of yield should not be considered as
representative of the future performance of any Money Market Fund. Since yields
fluctuate, yield data cannot necessarily be used to compare an investment in
these Money Market Funds' Shares with bank deposits, savings accounts, and
similar investment alternatives which often provide an agreed or guaranteed
fixed yield for a stated period of time. Shareholders should remember that
performance and yield are generally functions of kind and quality of the
investments held in a portfolio, portfolio maturity, operating expenses, and
market conditions. Any fees charged by Participating Organizations to Customer
accounts investing in Shares of these Money Market Funds will not be included in
yield calculations; such fees, if charged, would reduce the actual yield from
that quoted. For further information on performance information, see
"PERFORMANCE COMPARISONS" in the Statement of Additional Information.
MISCELLANEOUS
Shareholders will receive unaudited mid-year reports describing the investment
operations of the Money Market Funds and annual financial statements audited by
independent public accountants.
As used in this Prospectus and in the Statement of Additional Information,
"assets belonging to" a Fund means the consideration received by the Fund upon
the issuance or sale of Shares in that Fund, together with all income, earnings,
profits, and proceeds derived from the investment thereof including any proceeds
from the sale, exchange, or liquidation of such investments, and any funds or
payments derived from any reinvestment of such proceeds, and any general assets
of the Funds not readily identified as belonging to a particular Fund that are
allocated to that Fund by the Funds' Board of Trustees. The Board of Trustees
may allocate such general assets in any manner it deems fair and equitable. It
is anticipated that the factor that will be used by the Board of Trustees in
making allocations of general assets to particular Funds will be the relative
total net assets of the respective Funds at the
prospectus
26
<PAGE> 29
time of allocation. Assets belonging to a particular Fund are charged with the
direct liabilities and expenses with respect to that Fund, and with a share of
the general liabilities and expenses of the Fund not readily identified as
belonging to a particular Fund that are allocated to that Fund in proportion to
the relative total net assets of the respective Funds at the time of allocation.
The timing of allocations of general assets and general liabilities and expenses
of the Fund to particular Funds will be determined by the Board of Trustees of
the Funds and will be in accordance with generally accepted accounting
principles. Determinations by the Board of Trustees of the Funds as to the
timing of the allocation of general liabilities and expenses and as to the
timing and allocable portion of any general assets with respect to a particular
Fund are conclusive.
As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding Shares" of the Funds or a particular Fund
means the affirmative vote, at a meeting of Shareholders duly called, of the
lesser of (a) 67% or more of the outstanding Shares of the Funds or such Fund
present at a meeting at which the holders of more than 50% of the outstanding
Shares of the Funds or such Fund are represented in person or by proxy, or (b)
the holders of more than 50% of the outstanding Shares of the Funds or such
Fund.
Inquiries regarding the Funds may be directed in writing to the Funds at 3435
Stelzer Road, Columbus, Ohio 43219, or by calling toll free (800) 762-7085.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE MONEY
MARKET FUNDS OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING
BY THE MONEY MARKET FUNDS OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
prospectus
27
<PAGE> 30
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 31
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 32
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 33
AMERICAN PERFORMANCE FUNDS
MONEY MARKET FUNDS
U.S. TREASURY FUND
CASH MANAGEMENT FUND
INVESTMENT ADVISER
Bank of Oklahoma, N.A.
Bank Oklahoma Tower
Tulsa, Oklahoma 74103
INVESTMENT SUB-ADVISER
(CASH MANAGEMENT FUND ONLY)
AMR Investment Services, Inc.
P.O. Box 619003
Dallas/Ft. Worth Airport,
Texas 75261-9003
ADMINISTRATOR AND
DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-3055
LEGAL COUNSEL
Ropes & Gray
One Franklin Square
1301 K Street N.W.
Suite 800 East
Washington, DC 20005
AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
[AMERICAN PERFORMANCE FUNDS LOGO]
AMERICAN PERFORMANCE FUNDS
The Right Fit For Your Investment Goals
U.S. TREASURY FUND
CASH MANAGEMENT
FUND
Prospectus
December 17, 1997
<PAGE> 34
CROSS REFERENCE SHEET
---------------------
PROSPECTUS FOR THE AMERICAN PERFORMANCE
---------------------------------------
BOND INVESTMENT FUNDS
---------------------
<TABLE>
<CAPTION>
Form N-1A Part A Item Prospectus Caption
- --------------------- ------------------
<S> <C>
1. Cover Page Cover Page
2. Synopsis Fee Table
3. Condensed Financial Information Financial Highlights;
General Information - Performance
Information
4. General Description Cover Page;
of Registrant Investment Objectives; Investment
Policies; Other Investment Techniques
of the Bond Investment Funds;
Investment Restrictions; General
Information - Description of the Funds
and their Shares
5. Management of the Fund Management of the Bond Investment
Funds
5A. Management's Discussion of Fund See Registrant's current Annual
Performance Report
6. Capital Stock and Other Cover Page; How to Purchase Shares;
Securities How to Redeem Shares; Sales
Charges; Dividends; Federal Income
Taxes; General Information -
Description of the Funds and their
Shares; General Information -
Miscellaneous
7. Purchase of Securities Valuation of Shares;
Being Offered How to Purchase Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Inapplicable
</TABLE>
<PAGE> 35
<TABLE>
<S> <C>
American For performance, purchase,
Performance and
BOND INVESTMENT redemption information, call
Funds (800) 762-7085
Four Variable Net Asset Value 3435 Stelzer Road
Investment Portfolios of Columbus, Ohio 43219
American Performance Funds
</TABLE>
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
The American Performance Bond Investment Funds (the "Bond Investment
Funds") are four variable net asset value portfolios of the AMERICAN PERFORMANCE
FUNDS (the "Funds"), a diversified open-end management investment company which
currently consists of ten separately managed portfolios. Each of the Bond
Investment Funds has a different investment objective, and the net asset value
per unit of beneficial interest ("Share") of each Bond Investment Fund may be
expected to fluctuate in accordance with the value of each Fund's portfolio
investments.
AMERICAN PERFORMANCE BOND FUND (the "Bond Fund") seeks to maximize total
return by investing primarily in an actively managed, diversified portfolio of
short, intermediate, and long-term bonds and other fixed income securities. The
total return on a portfolio of such fixed income securities consists of a
combination of interest income and capital appreciation.
AMERICAN PERFORMANCE INTERMEDIATE BOND FUND (the "Intermediate Bond Fund")
seeks current income consistent with preservation of capital by investing
primarily in a diversified portfolio of intermediate term bonds and other fixed
income securities.
AMERICAN PERFORMANCE INTERMEDIATE TAX-FREE BOND FUND (the "Intermediate
Tax-Free Bond Fund") seeks current income consistent with preservation of
capital that is exempt from federal income taxes by investing primarily in a
diversified portfolio of intermediate term tax-free bonds and other tax-free
fixed income securities.
(Continued on following page)
- --------------------------------------------------------------------------------
THE FUNDS' SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY, BANK OF OKLAHOMA, N.A. OR ANY OF ITS AFFILIATES. THE FUNDS' SHARES ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR BY ANY OTHER AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is December 17, 1997.
prospectus
<PAGE> 36
(Continued from previous page)
AMERICAN PERFORMANCE SHORT-TERM INCOME FUND (the "Short-Term Income Fund")
seeks current income consistent with preservation of capital by investing
primarily in a diversified portfolio of short-term bonds and other fixed income
securities.
Bank of Oklahoma, N.A., Tulsa, Oklahoma ("BOK") serves as the investment
adviser ("Investment Adviser") to each Bond Investment Fund. BISYS Fund
Services, Columbus, Ohio, ("BISYS" or the "Distributor") acts as the Bond
Investment Funds' Administrator and Distributor.
This Prospectus relates only to the Bond Investment Funds. The Funds also
include two money market portfolios to which BOK serves as Investment Adviser:
the American Performance Cash Management Fund (for which AMR Investment
Services, Inc. ("AMR") serves as Investment Sub-Adviser) and the American
Performance U.S. Treasury Fund, each of which seeks current income with
liquidity and stability of principal (collectively, the "American Performance
Money Market Funds"). The Funds also include four equity portfolios to which BOK
serves as Investment Adviser: the American Performance Equity Fund, and the
American Performance Aggressive Growth Fund, each of which seeks growth of
capital and, secondarily, income through investing primarily in common stocks
and securities convertible into common stocks, the American Performance Balanced
Fund, which seeks current income and, secondarily, long-term capital growth by
investing primarily in a broadly diversified portfolio of securities, including
common stocks, preferred stocks and bonds and the American Performance Growth
Equity Fund, which seeks long-term capital appreciation income by investing
primarily in a diversified portfolio of common stocks and securities convertible
into common stocks (collectively, the "American Performance Equity Investment
Funds"). Persons who wish to obtain a copy of the Prospectus for the American
Performance Money Market Funds or the American Performance Equity Investment
Funds may contact the Funds at the telephone number shown above.
A Statement of Additional Information bearing the same date as this
Prospectus, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. The Statement of Additional Information can be
obtained without charge by writing to or calling the Funds at the address or
telephone number shown above.
This Prospectus sets forth concisely the information about the Bond
Investment Funds that a prospective investor ought to know before investing.
Investors should read this Prospectus and retain it for future reference.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fee Table................................................................... 3
Financial Highlights........................................................ 4
Investment Objectives....................................................... 8
Investment Policies and Special Considerations.............................. 9
Other Investment Techniques of the Bond Investment Funds.................... 15
Investment Restrictions..................................................... 17
Valuation of Shares......................................................... 19
How to Purchase Shares...................................................... 19
Sales Charges............................................................... 22
Sales Charge Waivers........................................................ 23
Concurrent Purchases and Right of Accumulation.............................. 24
Exchange Privilege.......................................................... 25
How to Redeem Shares........................................................ 26
Dividends................................................................... 28
Federal Income Taxes........................................................ 28
Distribution................................................................ 30
Management of the Bond Investment Funds..................................... 31
General Information......................................................... 34
</TABLE>
prospectus
2
<PAGE> 37
FEE TABLE
<TABLE>
<CAPTION>
INTERMEDIATE SHORT-TERM
BOND INTERMEDIATE TAX-FREE INCOME
FUND BOND FUND BOND FUND FUND
---- ------------ ------------ ----------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES(1)
- --------------------------------------------------------------------------------------
Maximum Sales Load Imposed on
Purchases(2)
(as a percentage of offering
price)....................... 4.00% 3.00% 3.00% 2.00%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering
price)....................... 0 % 0% 0% 0%
Deferred Sales Load (as a
percentage of original
purchase price or redemption
proceeds, if applicable)..... 0 % 0% 0% 0%
Redemption Fees(3) (as a
percentage of amount
redeemed, if applicable)..... 0 % 0% 0% 0%
Exchange Fees.................. $ 0 $ 0 $ 0 $ 0
ANNUAL OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET
ASSETS)
- --------------------------------------------------------------------------------------
Management Fees(4) (after
voluntary fee reductions).... 0.35% 0.35% 0.35% 0%
12b-1 Fees(5) (after voluntary
fee reductions in the case of
the Intermediate Tax-Free
Bond Fund and the Short-Term
Income Fund)................. 0.25% 0.25% 0% 0%
Other Expenses(6) (after
voluntary fee reductions in
the case of the Short-Term
Income Fund)................. 0.34% 0.33% 0.39% 0.33%
---- ---- ---- ----
Total Fund Operating
Expenses(7) (after voluntary
fee reductions).............. 0.94% 0.93% 0.74% 0.33%
==== ==== ==== ====
EXAMPLE:
- --------------------------------------------------------------------------------------
You would pay the following
expenses on a $1,000
investment in each of the
Funds, assuming (1) 5%
annual return and (2)
redemption at the end of
each time period:
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE SHORT-TERM
BOND INTERMEDIATE TAX-FREE INCOME
FUND BOND FUND BOND FUND FUND
---- ------------ ------------ ----------
<S> <C> <C> <C> <C>
1 Year......................... $49 $ 39 $ 37 $ 23
3 Years........................ $69 $ 59 $ 53 $ 30
5 Years........................ $90 $ 80 $ 70 $ 38
10 Years....................... $151 $141 $119 $ 61
</TABLE>
The purpose of the above table is to assist a potential purchaser of Shares of
any of the Bond Investment Funds in understanding the various costs and expenses
that an investor in any of the Bond Investment Funds will bear directly or
indirectly. The examples reflect voluntary reductions of investment advisory and
12b-1 Fees. Although the Investment Adviser and the Distributor have currently
agreed to these voluntary reductions, they may cease to provide these
reductions, which would have the effect of increasing the projected expenses set
forth above in the examples. Such expenses do not include any fees charged by
BOK or any of its affiliates to its customers' accounts which may have invested
in shares of a Fund. See "MANAGEMENT OF THE BOND INVESTMENT FUNDS," "SALES
CHARGES," and "DISTRIBUTION" for a more complete discussion of the transaction
expenses and
prospectus
3
<PAGE> 38
annual operating expenses of each Bond Investment Fund. NASD rules generally
limit the amount that a Bond Investment Fund may pay under a Distribution Plan.
A Bond Investment Fund would stop accruing payments under the Distribution Plan
if, to the extent, and for as long as, such limit would otherwise be exceeded.
Long-term shareholders may pay more than the equivalent of the maximum front-end
sales charges otherwise permitted by the rules of the National Association of
Securities Dealers, Inc.
THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
- ------------
(1) Participating organizations (as defined in "DISTRIBUTION") may charge a
Customer's (as defined in "DISTRIBUTION") account fees for automatic
investment and other investment and trust services provided in connection
with investment in the Funds. (See "HOW TO PURCHASE SHARES.")
(2) There may be no sales load imposed upon purchases of shares of the Funds by
(1) investors who purchase through the Investment Adviser and who have an
existing trust relationship with the Investment Adviser; (2) employees of
the Investment Adviser or its affiliates; (3) each Trustee of the Funds and
any employee of a company that constitutes the principal business activity
of a Trustee; (4) employees of the Distributor and its affiliates; (5)
orders placed on behalf of other investment companies distributed by The
BISYS Group, Inc. or its affiliated companies; (6) existing Shareholders who
own Shares in any of the Bond Investment Funds within their trust accounts
and purchase additional Shares outside of their trust relationships; and (7)
investors within wrap accounts.
(3) A wire redemption charge may be deducted from the amount of a wire
redemption payment made at the request of a holder of Shares. The current
charge, which is subject to change upon notice to Shareholders, is $15.00.
(See "HOW TO REDEEM SHARES -- By Telephone.")
(4) In order to reduce operating expenses, the Investment Adviser has
voluntarily agreed to reduce the investment advisory fees. Absent voluntary
fee reductions, the investment advisory fees would be 0.55% of the average
daily net assets for the Bond Fund, Intermediate Bond Fund, Intermediate
Tax-Free Bond Fund and Short-Term Income Fund.
(5) In order to reduce operating expenses, the Distributor has voluntarily
agreed to reduce the investment 12b-1 Fees. Absent voluntary fee reductions,
12b-1 Fees would be 0.25% of the average daily net assets of the
Intermediate Tax-Free Bond Fund and the Short-Term Income Fund.
(6) The total amount of Other Expenses for the Short-Term Income Fund, absent
voluntary fee reductions, would be 0.44% of the Fund's average daily net
assets.
(7) Absent voluntary fee reductions, the Total Fund Operating Expenses for the
Bond Fund, Intermediate Bond Fund, Intermediate Tax-Free Bond Fund and
Short-Term Income Fund would be 1.14%, 1.13%, 1.19% and 1.24% of each Fund's
average daily net assets, respectively.
FINANCIAL HIGHLIGHTS
The American Performance Funds (the "Funds") were organized as a Massachusetts
business trust and began active operations in August of 1990. The Funds
currently consist of ten series of units of
prospectus
4
<PAGE> 39
beneficial interests ("Shares"). Four such series represent interests in the
Bond Fund, Intermediate Bond Fund, Intermediate Tax-Free Bond Fund, and
Short-Term Income Fund.
The Tables below set forth certain financial highlights for the Bond Fund, the
Intermediate Bond Fund, the Intermediate Tax-Free Bond Fund and the Short-Term
Income Fund for the periods indicated. The most recent five years of each Table
are part of the Funds' financial statements which are included in the Funds'
Annual Report and are incorporated by reference into the Statement of Additional
Information, which a Shareholder may obtain by calling the Funds. The financial
statements have been audited by KPMG Peat Marwick LLP, independent accountants
for the Funds, whose report thereon, is included in the Funds' Annual Report.
<TABLE>
<CAPTION>
BOND FUND
-------------------------------------------------------------------------------------
SEPTEMBER 28,
YEAR ENDED AUGUST 31, 1990 TO
------------------------------------------------------------------- AUGUST 31,
1997 1996 1995 1994 1993 1992 1991(a)
------- ------- ------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $ 8.99 $ 9.29 $ 9.36 $ 11.05 $ 10.99 $ 10.57 $ 10.00
------- ------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income......... 0.58 0.57 0.56 0.58 0.70 0.76 0.71
Net realized and unrealized
gains
(losses) on investments....... 0.30 (0.30) 0.15 (0.77) 0.50 0.54 0.57
------- ------- ------- ------- ------- ------- -------
Total from Investment
Activities................ 0.88 0.27 0.71 (0.19) 1.20 1.30 1.28
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income......... (0.58) (0.57) (0.56) (0.58) (0.70) (0.76) (0.71)
Net realized gains............ -- -- -- (0.43) (0.44) (0.12) --
In excess of net realized
gains....................... -- -- (0.22) (0.49) -- -- --
------- ------- ------- ------- ------- ------- -------
Total Distributions........... (0.58) (0.57) (0.78) (1.50) (1.14) (0.88) (0.71)
------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD........................ $ 9.29 $ 8.99 $ 9.29 $ 9.36 $ 11.05 $ 10.99 $ 10.57
======= ======= ======= ======= ======= ======= =======
Total Return (excludes sales
charge)....................... 10.03% 2.84% 8.21% (1.92)% 11.76% 12.71% 13.12%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of period
(000)....................... $35,454 $32,807 $37,293 $38,257 $23,554 $42,396 $45,911
Ratio of expenses to average
net assets.................. 0.94% 0.96% 1.03% 1.05% 1.12% 1.06% 1.07%(b)
Ratio of net investment income
to average net assets....... 6.29% 6.08% 6.18% 5.72% 6.49% 6.96% 7.35%(b)
Ratio of expenses to average
net assets*................. 1.14% 1.16% 1.23% 1.25% 1.33% 1.30% 1.32%(b)
Ratio of net investment income
to average net assets*...... 6.09% 5.88% 5.98% 5.52% 6.28% 6.72% 7.10%(b)
Portfolio turnover............ 83.65% 61.02% 185.48% 122.14% 26.27% 60.84% 37.99%
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
prospectus
5
<PAGE> 40
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
-------------------------------------------------------------------------------------
SEPTEMBER 28,
YEAR ENDED AUGUST 31, 1990 TO
-------------------------------------------------------------------- AUGUST 31,
1997 1996 1995 1994 1993 1992 1991(a)
-------- ------- ------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $ 10.01 $ 10.26 $ 10.23 $ 11.06 $ 10.89 $ 10.45 $ 10.00
------- ------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income......... 0.60 0.60 0.61 0.61 0.64 0.71 0.66
Net realized and unrealized
gains (losses) on
investments................. 0.22 (0.25) 0.06 (0.73) 0.30 0.54 0.45
------- ------- ------- ------- ------- ------- -------
Total from Investment
Activities................ 0.82 0.35 0.67 (0.12) 0.94 1.25 1.11
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income......... (0.60) (0.60) (0.61) (0.61) (0.64) (0.71) (0.66)
Net realized gains............ -- -- -- (0.06) (0.13) (0.10) --
In excess of net realized
gains....................... -- -- (0.03) (0.04) -- -- --
------- ------- ------- ------- ------- ------- -------
Total Distributions......... (0.60) (0.60) (0.64) (0.71) (0.77) (0.81) (0.66)
------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD........................ $ 10.23 $ 10.01 $ 10.26 $ 10.23 $ 11.06 $ 10.89 $ 10.45
======= ======= ======= ======= ======= ======= =======
Total Return (excludes sales
charge)....................... 8.38% 3.41% 6.81% (1.14)% 9.04% 12.41% 11.42%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of period
(000)....................... $ 77,319 $63,088 $74,395 $84,144 $57,085 $47,523 $41,894
Ratio of expenses to average
net assets.................. 0.93% 0.95% 0.98% 0.98% 1.02% 1.07% 1.10%(b)
Ratio of net investment income
to average net assets....... 5.89% 5.84% 6.00% 5.72% 5.95% 6.62% 6.98%(b)
Ratio of expenses to average
net assets*................. 1.13% 1.15% 1.18% 1.18% 1.24% 1.31% 1.33%(b)
Ratio of net investment income
to average net assets*...... 5.69% 5.64% 5.80% 5.52% 5.74% 6.39% 6.75%(b)
Portfolio turnover............ 40.77% 129.97% 154.43% 76.30% 47.79% 60.53% 22.18%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
prospectus
6
<PAGE> 41
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
-------------------------------------------------------------------------
MAY 29,
YEAR ENDED AUGUST 31, 1992 TO
------------------------------------------------------- AUGUST 31,
1997 1996 1995 1994 1993 1992(a)
------- ------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $ 10.57 $ 10.67 $ 10.42 $ 10.77 $ 10.18 $ 10.00
------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income......... 0.49 0.49 0.51 0.54 0.55 0.13
Net realized and unrealized
gains (losses) on
investments................. 0.21 (0.10) 0.25 (0.35) 0.59 0.18
------- ------- ------- ------- ------- -------
Total from Investment
Activities................ 0.70 0.39 0.76 0.19 1.14 0.31
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income......... (0.49) (0.49) (0.51) (0.54) (0.55) (0.13)
------- ------- ------- ------- ------- -------
Total Distributions......... (0.49) (0.49) (0.51) (0.54) (0.55) (0.13)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD........................ $ 10.78 $ 10.57 $ 10.67 $ 10.42 $ 10.77 $ 10.18
======= ======= ======= ======= ======= =======
Total Return (excludes sales
charge)....................... 6.79% 3.68% 7.62% 1.76% 11.56% 3.14%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of period
(000)....................... $26,544 $31,036 $28,114 $30,097 $17,415 $ 7,560
Ratio of expenses to average
net assets.................. 0.74% 0.75% 0.51% 0.25% 0.25% 0.35%(b)
Ratio of net investment income
to average net assets....... 4.61% 4.58% 4.99% 5.06% 5.34% 5.28%(b)
Ratio of expenses to average
net assets*................. 1.19% 1.20% 1.24% 1.44% 1.63% 2.03%(b)
Ratio of net investment income
to average net assets*...... 4.16% 4.13% 4.25% 3.87% 3.96% 3.60%(b)
Portfolio turnover............ 11.38% 19.53% 8.35% 14.33% 13.19% 19.33%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) Period from commencement of operation.
(b) Annualized.
(c) Unannualized.
prospectus
7
<PAGE> 42
<TABLE>
<CAPTION>
SHORT-TERM INCOME FUND
-----------------------------------------
OCTOBER 19,
YEAR ENDED AUGUST 31, 1994
--------------------- TO AUGUST 31,
1997 1996 1995(a)
------- ------- -------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 9.79 $ 9.95 $ 10.00
------- ------- -------
INVESTMENT ACTIVITIES
Net investment income......................................... 0.61 0.59 0.52
Net realized and unrealized gains (losses) on investments..... 0.14 (0.14) (0.05)
------- ------- -------
Total from Investment Activities............................ 0.75 0.45 0.47
------- ------- -------
DISTRIBUTIONS
Net investment income......................................... (0.61) (0.59) (0.52)
In excess of net investment income............................ (0.01) -- --
Net realized gains............................................ -- (0.01) --
In excess of net realized gains............................... -- (0.01) --
------- ------- -------
Total Distributions......................................... (0.62) (0.61) (0.52)
------- ------- -------
NET ASSET VALUE, END OF PERIOD.................................. $ 9.92 $ 9.79 $ 9.95
======= ======= =======
Total Return (excludes sales charge)............................ 7.85% 4.64% 4.81%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of period (000)............................. $15,658 $14,399 $10,228
Ratio of expenses to average net assets....................... 0.33% 0.41% 0.57%(b)
Ratio of net investment income to average net assets.......... 6.14% 5.95% 5.96%(b)
Ratio of expenses to average net assets*...................... 1.16% 1.24% 1.47%(b)
Ratio of net investment income to average net assets*......... 5.31% 5.12% 5.06%(b)
Portfolio turnover............................................ 37.55% 80.98% 212.35%(b)
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operation.
(b) Annualized.
(c) Unannualized.
INVESTMENT OBJECTIVES
BOND FUND
The investment objective of the Bond Fund is to maximize total return by
investing primarily in an actively managed, diversified portfolio of short,
intermediate and long-term bonds and other fixed income securities. (See
"INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS" for discussion of such other
fixed income securities.) Total return on a portfolio of fixed income securities
consists of a combination of interest income and capital appreciation. The Bond
Fund will seek to maximize total return through active adjustment, when
appropriate, of portfolio composition and maturity in response to actual or
anticipated changes or trends in interest rates, the financial markets, or the
economy.
prospectus
8
<PAGE> 43
INTERMEDIATE BOND FUND
The investment objective of the Intermediate Bond Fund is to seek current
income, consistent with the preservation of capital, by investing primarily in a
diversified portfolio of intermediate bonds and other fixed income securities.
(See "INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS" for discussion of such
other fixed income securities.)
INTERMEDIATE TAX-FREE BOND FUND
The investment objective of the Intermediate Tax-Free Bond Fund is to seek
current income, consistent with the preservation of capital, that is exempt from
federal income taxes by investing primarily in a diversified portfolio of
intermediate term bonds and other fixed income securities. Investments in the
Intermediate Tax-Free Bond Fund, therefore, would not be appropriate for tax
deferred plans, such as IRA and Keogh Plans.
SHORT-TERM INCOME FUND
The investment objective of the Short-Term Income Fund is to seek current
income, consistent with preservation of capital, by investing primarily in a
diversified portfolio of short-term bonds and other fixed income securities.
(See "INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS" for discussion of such
other fixed income securities.)
ALL BOND INVESTMENT FUNDS
The Bond Fund, Intermediate Bond Fund, Intermediate Tax-Free Bond Fund and
Short-Term Income Fund are collectively referred to herein as Bond Investment
Funds. The investment objectives with respect to each of the Bond Investment
Funds may not be changed without a vote of the holders of a majority of the
outstanding Shares of that Bond Investment Fund (as defined in "GENERAL
INFORMATION -- Miscellaneous"). There can be no assurance that the investment
objective of a Bond Investment Fund will be achieved. Depending upon the
performance of a Bond Investment Fund's investment portfolio, the net asset
value per share of the Bond Investment Fund may decrease instead of increase.
Additionally, the Bond Investment Funds may engage in certain investment
techniques which may subject the Bond Investment Funds to certain risks (see
"OTHER INVESTMENT TECHNIQUES OF THE BOND INVESTMENT FUNDS").
INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS
BOND FUND, INTERMEDIATE BOND FUND AND SHORT-TERM INCOME FUND
The investments of the Bond Fund, the Intermediate Bond Fund and the Short-Term
Income Fund will primarily consist of, but will not be limited to, debt
obligations such as bonds, notes and debentures, bills which are issued by
United States corporations or issued or guaranteed by the U.S. government or its
agencies or instrumentalities and municipal securities which possess all the
characteristics detailed under "Intermediate Tax-Free Bond Fund" below, other
than exemption from federal income taxes. As described in greater detail below,
the Bond Fund, the Intermediate Bond Fund and the Short-Term Income Fund may
also invest in certain foreign securities, asset-backed securities, mortgage-
prospectus
9
<PAGE> 44
related securities and zero coupon obligations. The Bond Fund, the Intermediate
Bond Fund and the Short-Term Income Fund will invest in debt securities only if
they carry a rating within the three highest ratings categories assigned by a
nationally recognized statistical ratings organization (an "NRSRO") (e.g., at
least "A" from Moody's Investors Services ("Moody's"), or Standard & Poor's
Corporation ("S&P") (including all sub-classifications indicated by modifiers of
such "A" ratings)) or, if unrated, are deemed by the Investment Adviser under
guidelines established by the Funds' Board of Trustees to present attractive
opportunities and to be of comparable quality to the securities so rated. See
"Appendix" to the Statement of Additional Information for an explanation of
these ratings.
The Bond, Intermediate Bond, and Short-Term Income Funds, under normal market
conditions, will each invest at least 65% of the value of their total assets in
bonds, except that, when market conditions indicate a temporary defensive
investment strategy as determined by the Funds' Investment Adviser, more than
35% of the Bond, Intermediate Bond, or Short-Term Income Funds' assets may be
held in cash equivalents. At least 65% of the value of the total assets of the
Intermediate Bond Fund will be invested in bonds with stated or remaining
maturities of between three and ten years at the time of purchase. The
Intermediate Bond Fund will calculate the maturity of such bonds using their
effective maturity, as determined by the Advisers. For purposes of the
above-stated policies, "bonds" includes any debt instrument with a remaining
maturity of one year or more.
Certain debt securities such as, but not limited to, mortgage backed securities,
CMOs and asset-backed securities, as well as securities subject to prepayment of
principal prior to the stated maturity date, are expected to be repaid prior to
their stated maturity dates. As a result, the effective maturity of these
securities is expected to be shorter than the stated maturity. For purposes of
calculating a Bond Investment Fund's weighted average portfolio maturity, the
effective maturity of such securities, as determined by the Advisers, will be
used.
"Cash equivalents" are deposits or high quality interest-bearing instruments
with a remaining maturity of one year or less. The purpose of cash equivalents
is to provide liquidity and income at money market rates while minimizing the
risk of decline in value to the maximum extent possible. The instruments may
include, but are not limited to, commercial paper, domestic and Eurodollar
certificates of deposit, repurchase agreements, bankers' acceptances, U.S.
Treasury bills, master demand notes, agency discount notes, bank money market
deposit accounts and money market mutual funds. The Bond, Intermediate Bond, and
Short-Term Income Funds will only purchase commercial paper rated at the time of
purchase within the highest ratings categories assigned by an NRSRO (e.g., A-1
by S&P, Prime-1 by Moody's or F-1 by Fitch Investors Service) or, if not rated,
found by the Investment Adviser under guidelines established by the Funds' Board
of Trustees to be of comparable quality. See "Appendix" to the Statement of
Additional Information for an explanation of these ratings. During temporary
defensive periods as determined by the Investment Adviser, the Bond Fund, the
Intermediate Bond Fund, or the Short-Term Income Fund may hold up to 100% of its
total assets in cash equivalents.
The Intermediate Bond Fund intends that, under normal market conditions, its
portfolio will maintain an average dollar-weighted maturity of approximately
three to ten years. The Bond Fund intends that, under normal market conditions,
its portfolio will maintain an average dollarweighted maturity of seven years or
more. The Short-Term Income Fund intends that, under normal market conditions,
its
prospectus
10
<PAGE> 45
portfolio will maintain an average dollar-weighted maturity of three years or
less. However, for temporary defensive purposes the Intermediate Bond Fund, the
Bond Fund, and the Short-Term Income Fund may shorten the average
dollar-weighted maturity of its portfolio depending upon anticipated changes in
interest rates or other relevant market factors.
The Bond Fund will attempt to maximize total return by allocating portfolio
assets among various fixed income markets, securities, and maturities.
Securities and maturities selected will be those that offer the greatest
potential for maximizing total return without assuming undue risk. The
Investment Adviser will monitor the Fund's portfolio performance on an ongoing
basis and reallocate assets in response to actual and anticipated market and
economic changes. This approach may result in significant variations in the Bond
Fund's average weighted maturity.
FOREIGN SECURITIES
The Bond, Intermediate Bond, and Short-Term Income Funds may invest in Canadian,
Supra-national, and World Bank Bonds, Eurodollars, and similar instruments.
Investment in foreign securities is subject to special risks, such as future
adverse political and economic developments, possible seizure, nationalization,
or expropriation of foreign investments, less stringent disclosure requirements,
the possible establishment of exchange controls or taxation at the source, or
the adoption of other foreign governmental restrictions.
ASSET-BACKED SECURITIES
The Bond, Intermediate Bond, and Short-Term Income Funds may invest in
securities backed by automobile receivables and credit-card receivables and
other securities backed by other types of receivables or other assets. Credit
support for asset-backed securities may be based on the underlying assets and/or
provided through credit enhancements by a third party. Credit enhancement
techniques include letters of credit, insurance bonds, limited guarantees (which
are generally provided by the issuer), senior-subordinated structures and
overcollateralization. The Bond, Intermediate Bond, and Short-Term Income Funds
will only purchase an asset-backed security if it is rated within the three
highest ratings categories assigned by an NRSRO (e.g., at least "A" by S&P or
Moody's). Asset-backed securities are generally considered to be illiquid.
MORTGAGE-RELATED SECURITIES
The Bond, Intermediate Bond, and Short-Term Income Funds may purchase
mortgage-related securities representing pools of mortgage loans assembled for
sale to investors by various governmental agencies such as the Government
National Mortgage Association and government-related organizations such as the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation, as well as by private issuers such as commercial banks, savings and
loan institutions, mortgage bankers and private mortgage insurance companies.
Although certain mortgage-related securities are guaranteed by a third party or
otherwise similarly secured, the market value of the security, which may
fluctuate, is not so secured. If the Bond Fund, the Intermediate Bond Fund, or
the Short-Term Income Fund purchases a mortgage-related security at a premium,
that portion may be lost if there is a decline in the market value of the
security whether resulting from changes in interest rates or prepayments in the
underlying mortgage collateral. As with other interest-bearing securities,
prospectus
11
<PAGE> 46
the prices of such securities are inversely affected by changes in interest
rates. However, though the value of a mortgage-related security may decline when
interest rates rise, the converse is not necessarily true since in periods of
declining interest rates, the mortgages underlying the securities are prone to
prepayment. For this and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to the Bond Investment Fund holding the security. In addition, regular payments
received in respect of mortgage-related securities include both interest and
principal. No assurance can be given as to the return the Bond Investment Fund
holding a mortgage related security will receive when these amounts are
reinvested. The Bond, the Intermediate Bond, and the Short-Term Income Funds
also may invest in collateralized mortgage obligations structured on pools of
mortgage pass-through certificates or mortgage loans. Collateralized mortgage
obligations will be purchased only if rated in one of the three highest rating
categories by an NRSRO. For further discussion concerning the investment
considerations involved, see "INVESTMENT OBJECTIVE AND POLICIES -- Additional
Information on Fund Instruments -- Mortgage-Related Securities" in the Statement
of Additional Information.
ZERO COUPON OBLIGATIONS
The Bond, the Intermediate Bond, and the Short-Term Income Funds may hold
zero-coupon obligations issued by the U.S. Treasury and U.S. agencies. Such
zero-coupon obligations pay no current interest and are typically sold at prices
greatly discounted from par value, with par value to be paid to the holder at
maturity. The return on a zero-coupon obligation, when held to maturity, equals
the difference between the par value and the original purchase price.
Zero-coupon obligations have greater price volatility than coupon obligations
and such obligations will be purchased only if, at the time of purchase, the
yield spread, considered in light of the obligation's duration, is considered
advantageous.
INTERMEDIATE TAX-FREE BOND FUND
Under normal market conditions at least 80% of the net assets of the
Intermediate Tax-Free Bond Fund will be invested in a diversified portfolio of
obligations (such as bonds, notes, and debentures) issued by or on behalf of
states, territories and possessions of the United States, the District of
Columbia and other political subdivisions, agencies, instrumentalities and
authorities, the interest on which is both exempt from federal income taxes and
not treated as a preference item for individuals for purposes of the federal
alternative minimum tax ("Municipal Securities"). This is a fundamental policy
and may only be changed by the vote of a majority of the outstanding Shares of
the Intermediate Tax-Free Bond Fund (as defined in "GENERAL
INFORMATION -- Miscellaneous"). The Intermediate Tax-Free Bond Fund will
maintain a dollar-weighted average portfolio maturity between three and ten
years. Under normal market conditions, at least 65% of the Intermediate Tax-Free
Bond Fund's total assets will be invested in Municipal Securities which are
bonds and debentures.
The two principal classifications of Municipal Securities which may be held by
the Intermediate Tax-Free Bond Fund are "general obligation" securities and
"revenue" securities. General obligation securities are secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of principal
and interest. Revenue securities are payable only from the revenues derived from
a particular facility or class of facilities or, in some cases, from proceeds of
a special excise tax or other specific
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<PAGE> 47
revenue source such as the user of the facility being financed. Private activity
bonds held by the Intermediate Tax-Free Bond Fund are in most cases revenue
securities and are not payable from the unrestricted revenues of the issuer.
Consequently, the credit quality of private activity bonds is usually directly
related to the credit standing of the corporate user of the facility involved.
The Intermediate Tax-Free Bond Fund may also invest in "moral obligation"
securities, which are normally issued by special purpose public authorities. If
the issuer of moral obligation securities is unable to meet its debt service
obligations from current revenues, it may draw on a reserve fund, the
restoration of which is a moral commitment, but not a legal obligation of the
state or municipality which created the issuer.
The Intermediate Tax-Free Bond Fund invests in Municipal Securities which are
rated at the time of purchase within the three highest rating groups assigned by
an NRSRO, in the case of bonds (e.g. at least A by Moody's or S&P); rated within
the highest ratings category assigned by an NRSRO, in the case of notes (e.g.,
"SP-1" by S&P or "MIG-1" by Moody's); rated in the highest ratings category
assigned by an NRSRO, in the case of tax-exempt commercial paper (e.g., "A-1" or
higher by S&P or "Prime-1" by Moody's); or rated in the highest ratings category
assigned by an NRSRO, in the case of variable rate demand obligations, (e.g.,
"VMIG1" by Moody's). The Intermediate Tax-Free Bond Fund may also purchase
Municipal Securities which are unrated at the time of purchase but are
determined to be of comparable quality by the Investment Adviser pursuant to
guidelines approved by the Funds' Board of Trustees. The applicable Municipal
Securities ratings are described in the Appendix to the Statement of Additional
Information.
Interest income from certain types of municipal securities may constitute a
preference item for individuals for purposes of the federal alternative minimum
tax. The Intermediate Tax-Free Bond Fund will not treat these securities as
"Municipal Securities" for purposes of measuring compliance with the 80% test
described above. To the extent the Intermediate Tax-Free Bond Fund invests in
these securities, individual shareholders, depending on their own tax status,
may be subject to alternative minimum tax on that part of the Intermediate
Tax-Free Bond Fund's distributions derived from these securities. More
generally, corporate Shareholders may be subject to the federal alternative
minimum tax on distributions derived by the Intermediate Tax-Free Bond Fund from
Municipal Securities. See "FEDERAL INCOME TAXES" for more information on the
impact of the federal alternative minimum tax on investors in the Intermediate
Tax-Free Bond Fund.
Opinions relating to the validity of Municipal Securities and to the exemption
of interest thereon from federal income tax are rendered by bond counsel to the
respective issuers at the time of issuance. Neither the Intermediate Tax-Free
Bond Fund nor its Investment Adviser will review the proceedings relating to the
issuance of Municipal Securities or the basis for such opinions.
Although the Intermediate Tax-Free Bond Fund may invest more than 25% of its net
assets in (i) Municipal Securities whose issuers are in the same state (ii)
Municipal Securities the interest on which is paid solely from revenues of
similar projects, and (iii) private activity bonds, it does not presently intend
to do so on a regular basis. To the extent the Intermediate Tax-Free Bond Fund's
assets are concentrated in Municipal Securities that are payable from the
revenues of similar projects or are issued by issuers located in the same state,
or are concentrated in private activity bonds, the
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<PAGE> 48
Intermediate Tax-Free Bond Fund will be subject to the peculiar risks presented
by the laws and economic conditions relating to such states, projects and bonds
to a greater extent than it would be if its assets were not so concentrated.
The Intermediate Tax-Free Bond Fund may invest in short-term Municipal
Securities up to 100% of its assets during temporary defensive periods.
TAXABLE OBLIGATIONS
Under normal market conditions, at least 80% of the net assets of the
Intermediate Tax-Free Bond Fund will be invested in Municipal Securities.
However, investments of the Intermediate Tax-Free Bond Fund may be made in
taxable obligations if, for example, suitable tax-exempt obligations are
unavailable or if acquisition of U.S. government or other taxable securities is
deemed appropriate for temporary defensive purposes. Such taxable obligations,
which are further described in the Statement of Additional Information may
include obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities (some of which may be subject to repurchase agreements),
certificates of deposit and bankers' acceptances of selected banks and
commercial paper meeting the Intermediate Tax-Free Bond Fund's quality standards
(as described above) for tax-exempt commercial paper. Under such circumstances
and during the period of such investment, the Intermediate Tax-Free Bond Fund
may not achieve its stated investment objective.
VARIABLE AND FLOATING RATE NOTES
Municipal Securities purchased by the Intermediate Tax-Free Bond Fund may
include rated and unrated variable and floating rate tax-exempt notes. There may
be no active secondary market with respect to a particular variable or floating
rate note. Nevertheless, the periodic readjustments of their interest rates tend
to assure that their value to the Intermediate Tax-Free Bond Fund will
approximate their par value. Variable and floating rate notes for which no
readily available market exists will be purchased in an amount which, together
with other securities described in Investment Restriction Number 5 below (see
"INVESTMENT RESTRICTIONS"), exceeds 10% of the Intermediate Tax-Free Bond Fund's
net assets only if such notes are subject to a demand feature that will permit
the Intermediate Tax-Free Bond Fund to receive payment of the principal within
seven days after demand by the Intermediate Tax-Free Bond Fund.
THE BOND INVESTMENT FUNDS
Bonds, notes, and debentures in which the Bond Investment Funds may invest may
differ in interest rates, maturities and times of issuance. The market value of
the Bond Investment Funds' debt securities will change in response to interest
rate changes and other factors. During periods of falling interest rates, the
value of outstanding debt securities generally rise. Conversely, during periods
of rising interest rates, the value of such securities generally decline.
Moreover, while securities with longer maturities tend to produce higher yields,
the price of longer maturity securities is also subject to greater fluctuations
as a result of changes in interest rates. Conversely, securities with shorter
maturities generally have less price movement than securities of comparable
quality with longer maturities. Changes by recognized agencies in the rating of
any debt security and in the ability of an issuer to make payments of interest
and principal also affect the value of these investments. Except
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<PAGE> 49
under conditions of default, changes in the value of a Bond Investment Fund's
portfolio securities will not affect cash income derived from these securities
but will affect a Bond Investment Fund's net asset value.
OTHER INVESTMENT TECHNIQUES OF THE BOND INVESTMENT FUNDS
INVESTMENT COMPANY SECURITIES
Each Bond Investment Fund may invest in shares of other investment companies,
including other American Performance Funds. However, none of the Bond Investment
Funds may invest more than 5% of its total assets in the securities of any one
investment company, nor may any Bond Investment Fund own more than 3% of the
securities of any investment company or invest more than 10% of its total assets
in the securities of other investment companies. These investment companies
typically pay an investment advisory fee out of their assets. Therefore,
investments may be subject to duplicate management, advisory and distribution
fees. The Investment Adviser will consider this fee in its investment analysis
when determining whether to purchase shares of these companies for a Bond
Investment Fund. This fee is in addition to the fees received by a Bond
Investment Fund's Investment Adviser and Administrator. In order to avoid the
imposition of additional fees as a result of investments by a Bond Investment
Fund in shares of other American Performance Funds, the Investment Adviser and
Administrator have agreed to promptly forward to the Bond Investment Fund any
portion of their usual asset-based service fees from an American Performance
Fund which is attributable to investment by the Bond Investment Fund in Shares
of such other American Performance Fund.
OPTIONS AND FUTURES CONTRACTS
Each Bond Investment Fund may acquire put or call options and futures contracts
and may write covered call options. See the Statement of Additional Information
for more information on these investment activities.
Futures transactions involve brokerage costs and require a Bond Investment Fund
to segregate assets to cover contracts that would require it to purchase
securities. A Bond Investment Fund may lose the expected benefit of futures
transactions if interest rates or securities prices move in an unanticipated
manner. Such unanticipated changes may also result in poorer overall performance
than if the Bond Investment Fund had not entered into any futures transactions.
In addition, the value of a Bond Investment Fund's futures positions may not
prove to be perfectly or even highly correlated with the value of its portfolio
securities, limiting the Bond Investment Fund's ability to hedge effectively
against interest rate and/or market risk and giving rise to additional risks.
There is no assurance of liquidity in the secondary market for purposes of
closing out futures positions.
WHEN-ISSUED SECURITIES
Each Bond Investment Fund may purchase securities on a whenissued basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield and thereby involve a risk that the
yield obtained in the transaction will be less than those available in the
market when delivery takes place. A Bond Investment Fund will generally not pay
for such securities or start earning interest on them until they are received.
When a Bond Investment Fund agrees to purchase such securities, its Custodian
will set aside cash or liquid high grade securities equal to the
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<PAGE> 50
amount of the commitment in a separate account with the Custodian or a
Sub-Custodian of the Bond Investment Fund. Securities purchased on a when-issued
basis are recorded as an asset and are subject to changes in value based upon
changes in the general level of interest rates. Each Bond Investment Fund
expects that commitments to purchase when-issued securities will not exceed 25%
of the value of its total assets absent unusual market conditions. In the event
that its commitments to purchase when-issued securities ever exceeded 25% of the
value of its assets, a Bond Investment Fund's liquidity and the ability of the
Investment Adviser to manage it might be severely affected. No Bond Investment
Fund intends to purchase when-issued securities for speculative purposes but
only in furtherance of its investment objective.
SECURITIES LENDING
In order to generate additional income, each Bond Investment Fund may, from time
to time, lend its portfolio securities to broker-dealers, banks, or
institutional borrowers of securities. The Funds will enter into loan agreements
with broker-dealers, banks, or other institutions that BOK has determined are
creditworthy under guidelines established by the Funds' Board of Trustees. See
the Statement of Additional Information for more information regarding these
investment activities.
REPURCHASE AGREEMENTS
Securities held by a Bond Investment Fund may be subject to repurchase
agreements. Under the terms of a repurchase agreement, a Bond Investment Fund
would acquire securities from financial institutions, such as member banks of
the Federal Deposit Insurance Corporation or registered broker-dealers which the
Investment Adviser deems creditworthy under guidelines approved by the Funds'
Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed upon date and price. The repurchase price would
generally equal the price paid by the Bond Investment Fund plus interest
negotiated on the basis of current short-term rates, which may be more or less
than the rate on the underlying portfolio securities. The seller under a
repurchase agreement will be required to maintain the value of collateral held
pursuant to the agreement at not less than the repurchase price (including
accrued interest) and the Investment Adviser will monitor the collateral's value
to ensure that it equals or exceeds the repurchase price. In addition,
securities subject to repurchase agreements will be held in a segregated
account. Repurchase agreements are considered to be loans by an investment
company under the Investment Company Act of 1940 (the "1940 Act"). See the
Statement of Additional Information for more information regarding this
investment practice.
REVERSE REPURCHASE AGREEMENTS
Each Bond Investment Fund may borrow funds for temporary purposes by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. Pursuant to such agreements, a Bond Investment
Fund would sell portfolio securities to financial institutions such as banks and
broker-dealers and agree to repurchase them at a mutually agreed upon date and
price. At the time a Bond Investment Fund enters into a reverse repurchase
agreement, it will place in a segregated custodial account assets, such as
liquid high quality debt securities, consistent with the Bond Investment Fund's
investment objective having a value not less than 100% of the repurchase price
(including accrued interest), and will subsequently monitor the account to
ensure that such required value is maintained. Reverse repurchase agreements
involve the risk that the market value of
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<PAGE> 51
the securities sold by a Bond Investment Fund may decline below the price at
which such Fund is obligated to repurchase the securities. Reverse repurchase
agreements are considered to be borrowings by an investment company under the
1940 Act.
PRIVATE PLACEMENT INVESTMENTS
Each Bond Investment Fund may invest in commercial paper issued in reliance on
the so-called "private placement" exemption from registration afforded by
Section 4(2) of the Securities Act of 1933, and resold to qualified
institutional buyers under Securities Act Rule 144A ("Section 4(2) paper").
Section 4(2) paper is restricted as to disposition under the federal securities
laws, and generally is sold to institutional investors such as the Funds who
agree that they are purchasing the paper for investment and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction and may be accomplished in accordance with Rule 144A. Section 4(2)
paper normally is resold to other institutional investors like the Funds through
or with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. None of the Bond Investment
Funds will invest more than 10% of its net assets in Section 4(2) paper and
illiquid securities unless the Investment Adviser determines, by continuous
reference to the appropriate trading markets and pursuant to guidelines approved
by the Board of Trustees, that any Section 4(2) paper held by the Bond
Investment Fund in excess of this level is at all times liquid.
Because it is not possible to predict with assurance exactly how this market for
Section 4(2) paper sold and offered under Rule 144A will develop, the Board of
Trustees and the Investment Adviser, pursuant to the guidelines approved by the
Board of Trustees, will carefully monitor the Bond Investment Funds' investments
in these securities, focusing on such important factors, among others, as
valuation, liquidity, and availability of information. Investments in Section
4(2) paper could have the effect of reducing a Bond Investment Fund's liquidity
to the extent that qualified institutional buyers become for a time not
interested in purchasing these restricted securities.
INVESTMENT RESTRICTIONS
Each Bond Investment Fund is subject to a number of investment restrictions that
may be changed only by a vote of a majority of the outstanding Shares of the
Bond Investment Fund (as defined in "GENERAL INFORMATION -- Miscellaneous").
Pursuant to these investment restrictions:
1. Each of the Bond Investment Funds will not purchase a security if, as
a result, with respect to 75% of its portfolio (i) more than 5% of the
value of its total assets would be invested in any one issuer, or (ii) it
would hold more than 10% of any class of securities of such issuer. There
is no limit on the percentage of assets that may be invested in U.S.
Treasury bills, notes, or other obligations issued or guaranteed by the
U.S. government or its agencies and instrumentalities. For purposes of this
and the immediately following limitation, a security is considered to be
issued by the government entity (or entities) whose assets and revenues
back the security, or, with respect to a private activity bond that is
backed only by the assets and revenues of a nongovernmental user, such
non-governmental user.
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<PAGE> 52
2. Each of the Bond Investment Funds will not purchase a security if, as
a result, more than 25% of the value of its total assets would be invested
in securities of one or more issuers conducting their principal business
activities in the same industry, provided that (a) this limitation shall
not apply to obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities; (b) wholly owned finance companies will be
considered to be in the industries of their parents if their activities are
primarily related to financing the activities of their parents; (c)
utilities will be divided according to their services (for example, gas,
gas transmission, electric and gas, electric, and telephone will each be
considered a separate industry); and (d) this limitation shall not apply to
Municipal Securities or governmental guarantees of Municipal Securities;
and further, that for the purpose of this limitation only, private activity
bonds that are backed only by the assets and revenues of a non-governmental
user shall not be deemed to be Municipal Securities.
3. The Bond Investment Funds may not borrow money or issue senior
securities, except that each Bond Investment Fund may borrow from banks or
enter into reverse repurchase agreements for temporary purposes in amounts
up to 10% of the value of its total assets at the time of such borrowing;
or mortgage, pledge, or hypothecate any assets, except in connection with
any such borrowing and in amounts not in excess of the lesser of the dollar
amounts borrowed or 10% of the value of each Bond Investment Fund's total
assets at the time of its borrowing. No Bond Investment Fund will purchase
securities while its borrowings (including reverse repurchase agreements)
exceed 5% of its total assets.
4. No Bond Investment Fund may make loans, except that each Bond
Investment Fund may, in accordance with its investment objectives and
policies, purchase or hold debt instruments, lend portfolio securities, and
enter into repurchase agreements.
5. No Bond Investment Fund will enter into a repurchase agreement with a
maturity in excess of seven days if such investment, together with other
instruments in the Fund which are not readily marketable, exceeds 10% of
such Fund's net assets.
In addition, the Intermediate Tax-Free Bond Fund is subject to the following
additional investment restrictions pursuant to which it will not:
1. Acquire a put, if, immediately after such acquisition, over 5% of the
total value of the Intermediate Tax-Free Bond Fund's assets would be
subject to puts from such issuer (except that the 5% limitation is
inapplicable to puts that, by their terms, would be readily exercisable in
the event of a default in payment of principal or interest on the
underlying securities). For the purpose of this investment restriction and
Investment Restriction Number 2 below, a put will be considered to be from
the party to whom the Intermediate Tax-Free Bond Fund will look for payment
of the exercise price.
2. Acquire a put that, by its terms, would be readily exercisable in the
event of a default in payment of principal and interest on the underlying
security or securities if immediately after that acquisition the value of
the security or securities underlying that put, when aggregated with the
value of any other securities issued or guaranteed by the issuer of the
put, would exceed 10% of the total value of the Intermediate Tax-Free Bond
Fund's assets.
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<PAGE> 53
VALUATION OF SHARES
The net asset value of the Funds are determined and their Shares are priced as
of the close of regular trading of the New York Stock Exchange ("NYSE")
(generally 4:00 p.m. Eastern time) on each Business Day ("Valuation Time"). As
used herein, a "Business Day" constitutes any day on which the NYSE is open for
trading, and the Federal Reserve Bank of Kansas City is open, except days on
which there are not sufficient changes in the value of a Fund's portfolio
securities that the Fund's net asset value might be materially affected, or days
during which no Shares are tendered for redemption and no orders to purchase
Shares are received. Currently, the NYSE or the Federal Reserve Bank of Kansas
City is closed on the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veteran's Day, Thanksgiving Day and Christmas Day. Net asset
value per share for purposes of pricing sales and redemptions is calculated by
dividing the value of all securities and other assets belonging to each Bond
Investment Fund, less the liabilities charged to each Bond Investment Fund, by
the number of its outstanding Shares.
The securities in each Bond Investment Fund will be valued at market value. If
market quotations are not readily available, the securities will be valued by a
method which the Funds' Board of Trustees believes accurately reflects fair
value. Debt securities with remaining maturities of 60 days or less will be
valued in accordance with the amortized cost method where the Funds' Trustees
determine that amortized cost is fair value. For further information about
valuation of investments, see the Statement of Additional Information.
HOW TO PURCHASE SHARES
Shares of the Bond Investment Funds are sold on a continuous basis and may be
purchased directly from the Funds' Distributor, BISYS, either by mail, by
telephone, or by electronic transfer. Shares may also be purchased through a
bank or broker-dealer who has established a dealer agreement with the
Distributor. Except as described under "Auto Invest Plan" below, the minimum
initial purchase is $1,000, and the minimum for subsequent purchases is only
$100. These minimums may be waived if purchases are made in connection with
Individual Retirement Accounts ("IRAs"), Keoghs, qualified pension plans,
similar plans, or other employer plans. For information on IRAs, Keoghs or
similar plans, contact BOK at (918) 588-6586.
BY MAIL
Investors may purchase Shares of any Bond Investment Fund by completing and
signing an Account Registration form and mailing it, along with a check (or
other negotiable bank instrument or money order) for at least $1,000, payable to
the appropriate Fund, in care of the Funds' Custodian at Bank of Oklahoma, N.A.,
Attention: American Performance Funds, Department 12, Tulsa, Oklahoma 74182.
Subsequent purchases of Shares may be made at any time by mailing a check (or
other negotiable bank draft or money order) for at least $100, to the above
address.
Account Registration forms can be obtained by calling the Funds at (800)
762-7085.
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<PAGE> 54
BY TELEPHONE OR ELECTRONIC TRANSFER
If an investor's Account Registration form has been previously received by the
Distributor, investors may also purchase Shares of any of the Bond Investment
Funds by telephone or by electronic transfer to the Funds' Custodian. To place
an order by telephone, call the Funds toll-free at (800) 762-7085. Payment for
Shares ordered by telephone may be made by check and must be received by the
Funds' Custodian within the settlement requirements defined under the Securities
Exchange Act of 1934. Shares of the Bond Investment Funds ordered by telephone
will be purchased for the Shareholder's account when the order has been
received. Any questions regarding current settlement requirements or electronic
payment instructions should be directed to the Funds at (800) 762-7085.
If payment for the Shares is not received within the prescribed time periods, or
if a check timely received does not clear, the purchase will be canceled and the
investor could be liable for any losses or fees incurred.
AUTO INVEST PLAN
The Funds offer an Auto Invest Plan which enables Shareholders of the Bond
Investment Funds to make regular monthly or quarterly purchases of Shares
through automatic deductions from their bank accounts. With Shareholder
authorization, the Transfer Agent deducts the amount specified from the
Shareholder's bank account which is then automatically invested in Shares at net
asset value. The required minimum initial investment when opening an account
using the Auto Invest Plan is $100; the minimum amount for subsequent
investments in a Bond Investment Fund is $50. To participate in the Auto Invest
Plan, Shareholders should complete the appropriate section of the Account
Registration form which can be acquired by calling (800) 762-7085. To change the
Auto Invest instructions, a Shareholder must submit a written request to the
Funds. A Shareholder may discontinue the feature by submitting a written request
to or by calling the Funds.
FUND DIRECT INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS")
A Fund Direct IRA enables individuals, even if they participate in an
employer-sponsored retirement plan, to establish their own retirement program.
IRA contributions may be tax deductible and earnings are tax-deferred. Under the
Tax Reform Act of 1986, the tax deductibility of IRA contributions is restricted
or eliminated for individuals who participate in certain employer pension plans
and whose annual income exceeds certain limits. Existing IRAs and future
contributions up to the IRA maximums, whether deductible or not, still earn
income on a tax-deferred basis.
All IRA distribution requests must be made in writing to the Funds. Any
additional deposits to an IRA must distinguish the type and year of the
contribution. For more information on an IRA call the Funds at (800) 762-7085.
Investment in Shares of the Intermediate Tax-Free Bond Fund would not be
appropriate for any IRA. Shareholders are advised to consult a tax adviser on
IRA contribution and withdrawal requirements and restrictions.
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<PAGE> 55
OTHER INFORMATION REGARDING PURCHASES
Shares may also be purchased through procedures established by the Distributor
in connection with the requirements of qualified accounts maintained by or on
behalf of certain persons ("Customers") by Participating Organizations under the
Funds' Distribution Plan (See "DISTRIBUTION"). Shares of any Bond Investment
Fund sold to a Participating Organization on behalf of Customers will normally
be held of record by the Participating Organization and it is the responsibility
of the Participating Organization to transmit purchase or redemption orders to
the Distributor and to deliver funds for the purchase thereof on a timely basis.
Depending upon the terms of a particular Customer account, a Participating
Organization may charge a Customer account fees for services provided in
connection with investment in any Bond Investment Fund. Information concerning
these services and any charges can be obtained from the Participating
Organization or one of its affiliates. This Prospectus should be read in
conjunction with any such information so received.
Shares of each Bond Investment Fund are purchased at the net asset value per
share (see "VALUATION OF SHARES") next determined after receipt by the
Distributor of an order to purchase Shares in good form, plus any applicable
sales charge as described below. Purchases of Shares in a Bond Investment Fund
will be effected only on a Business Day (as defined in "Valuation of Shares") of
that Bond Investment Fund. An order received prior to the Valuation Time on any
Business Day will be executed at the net asset value determined as of the
Valuation Time on the day of receipt. An order received after the Valuation Time
on any Business Day will be executed at the net asset value determined as of the
Valuation Time on the next Business Day.
In the case of orders for the purchase of Shares placed through a broker-dealer,
the applicable public offering price will be the net asset value as so
determined, but only if the broker-dealer receives the order prior to the
Valuation Time for that day and transmits it to the Distributor prior to the
Valuation Time for that day. The broker-dealer is responsible for transmitting
such orders promptly. If the broker-dealer fails to do so, the investor's right
to that day's closing price must be settled between the investor and the
broker-dealer. If the brokerdealer receives the order after the Valuation Time
for that day, the price will be based on the net asset value determined as of
the Valuation Time for the next day.
Each Bond Investment Fund reserves the right to reject any order for the
purchase of its Shares in whole or in part, including purchases made with
foreign and third party checks.
Every Shareholder will receive a confirmation of each new transaction in the
Shareholder's account, which will show the total number of Shares of such Fund
owned by the Shareholder and the number of Shares being held in safekeeping by
the Transfer Agent for the account of the Shareholder. Confirmation of purchases
and redemptions of Shares of the Bond Investment Funds by a Participating
Organization on behalf of a Customer will be sent by the Participating
Organization. Shareholders may rely on these statements in lieu of certificates.
No certificates representing Shares of any Bond Investment Fund will be issued.
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SALES CHARGES
The public offering price of a Share of each of the Bond Investment Funds equals
its net asset value plus a sales charge. BISYS receives this sales charge as
Distributor and reallows a portion of it as dealer discounts and brokerage
commissions. However, the Distributor, at its sole discretion, may pay certain
dealers all or part of the portion of the sales charge it receives. A broker or
dealer who receives a reallowance in excess of 90% of the sales charge may be
deemed to be an "underwriter" for purposes of the Securities Act of 1933.
The following table sets forth information pertaining to the sales charges for
the Bond Fund.
<TABLE>
<CAPTION>
DEALER DISCOUNTS
AND BROKERAGE
SALES CHARGE AS SALES CHARGE AS COMMISSIONS AS
A PERCENTAGE OF A PERCENTAGE OF PERCENTAGE OF
NET AMOUNT NET OFFERING PUBLIC OFFERING
AMOUNT OF PURCHASE INVESTED PRICE PRICE
- ----------------------------------------- --------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000........................ 4.17% 4.00% 3.50%
$50,000 but less than $250,000........... 3.63% 3.50% 3.00%
$250,000 but less than $500,000.......... 3.09% 3.00% 2.50%
$500,000 but less than $1,000,000........ 2.56% 2.50% 2.25%
$1,000,000 or more....................... 2.04% 2.00% 2.00%
</TABLE>
The following table sets forth information pertaining to sales charges for the
Intermediate Bond Fund and the Intermediate Tax-Free Bond Fund.
<TABLE>
<CAPTION>
DEALER DISCOUNTS
AND BROKERAGE
SALES CHARGE AS SALES CHARGE AS COMMISSIONS AS
A PERCENT AGE A PERCENT AGE PERCENTAGE OF
OF NET AMOUNT OF NET OFFERING PUBLIC OFFERING
AMOUNT OF PURCHASE INVESTED PRICE PRICE
- ----------------------------------------- --------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000........................ 3.09% 3.00% 2.50%
$50,000 but less than $250,000........... 2.56% 2.50% 2.00%
$250,000 but less than $500,000.......... 2.04% 2.00% 1.50%
$500,000 but less than $1,000,000........ 1.52% 1.50% 1.25%
$1,000,000 or more....................... 1.01% 1.00% 1.00%
</TABLE>
prospectus
22
<PAGE> 57
The following table sets forth information pertaining to sales charges for the
Short-Term Income Fund.
<TABLE>
<CAPTION>
DEALER DISCOUNTS
AND BROKERAGE
SALES CHARGE AS SALES CHARGE AS COMMISSIONS AS
A PERCENTAGE OF A PERCENTAGE OF PERCENTAGE OF
NET AMOUNT NET OFFERING PUBLIC OFFERING
AMOUNT OF PURCHASE INVESTED PRICE PRICE
- ----------------------------------------- --------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000........................ 2.04% 2.00% 1.80%
$50,000 but less than $250,000........... 1.52% 1.50% 1.35%
$250,000 but less than $500,000.......... 1.01% 1.00% 0.90%
$500,000 but less than $1,000,000........ 0.50% 0.50% 0.45%
$1,000,000 or more....................... 0.00% 0.00% 0.00%
</TABLE>
From time to time dealers who receive dealer discounts and brokerage commissions
from the Distributor may reallow all or a portion of such dealer discounts and
brokerage commissions to other dealers or brokers.
The Distributor, at its expense, will also provide additional compensation to
dealers in connection with sales of Shares of any of the Funds. Such
compensation will include financial assistance to dealers in connection with
conferences, sales or training programs for their employees, seminars for the
public, advertising campaigns regarding one or more Funds of the Funds, and/or
other dealer-sponsored special events. In some instances, this compensation will
be made available only to certain dealers whose representatives have sold a
significant amount of such Shares. Compensation will include payment for travel
expenses, including lodging, incurred in connection with trips taken by invited
registered representatives and members of their families to locations within or
outside of the United States for meetings or seminars of a business nature.
Compensation will also include the following types of non-cash compensation
offered through sales contests: (1) vacation trips, including the provision of
travel arrangements and lodging at luxury resorts at exotic locations, (2)
tickets for entertainment events (such as concerts, cruises and sporting events)
and (3) merchandise (such as clothing, trophies, clocks and pens). Dealers may
not use sales of a Fund's Shares to qualify for this compensation to the extent
such may be prohibited by the laws of any state or any self-regulatory agency,
such as the National Association of Securities Dealers, Inc. None of the
aforementioned compensation is paid for by any Fund or its Shareholders.
SALES CHARGE WAIVERS
The Distributor may periodically waive the sales charges for all customers with
respect to any of the Bond Investment Funds. In addition, the Distributor may
waive the sales charge for the purchase of a Fund's shares with the proceeds
from the recent redemption of shares of another non-money market mutual fund
that imposes a sales charge.
The sales charges may also be waived for (1) investors who purchase through
accounts with the Investment Adviser and through their existing trust
relationship with the Investment Adviser; (2) employees of the Investment
Adviser or its affiliates; (3) each Trustee of the Funds and any employee of a
company that constitutes the principal business activity of a Trustee; (4)
employees of the Distributor
prospectus
23
<PAGE> 58
and its affiliates; (5) orders placed on behalf of other investment companies
distributed by The BISYS Group, Inc. or its affiliated companies; (6) existing
Shareholders who own Shares in any of the Bond Investment Funds within their
trust accounts and purchase additional Shares outside of these trust
relationships; and (7) investors within wrap accounts.
Each investor described in paragraphs (2), (3), (4), and (6) above must identify
himself or herself at the time of purchase. When an investor who has previously
redeemed Shares of any American Performance Fund re-enters the American
Performance Funds, the sales charge on the newly purchased shares will be waived
on a one-time basis in an amount up to the total of any sales charge paid on the
shares previously redeemed. If the Shareholder exercising this re-entry
privilege paid a sales charge on the redeemed shares and held them for less than
91 days, such Shareholder must reduce his or her cost basis of the redeemed
shares for purposes of determining any capital gain or loss on the redemption by
the lesser of (1) the sales charge paid for those shares, or (2) the sales
charge waived in connection with the purchase of the new shares. The Funds
reserve the right to alter the terms of their sales charge waiver practices upon
sixty days' notice to Shareholders.
CONCURRENT PURCHASES AND RIGHT OF ACCUMULATION
For purposes of qualifying for a reduced sales charge, investors have the
privilege of combining concurrent purchases of, and holdings in, shares of any
Funds of the Funds sold with a sales charge ("Eligible Shares"). Investors are
permitted to purchase Eligible Shares at the public offering price applicable to
the total of (a) the dollar amount of the Eligible Shares then being purchased
plus (b) an amount equal to the then-current net asset value of the purchaser's
combined holdings of Eligible Shares.
To receive the applicable public offering price pursuant to concurrent purchases
and the right of accumulation, Shareholders must, at the time of purchase, give
the Distributor sufficient information to permit confirmation of qualification.
Investors may combine purchases of Eligible Shares that are made in their
individual capacity with (1) purchases that are made by members of their
immediate household and (2) purchases made by businesses that they own as sole
proprietorships, for purposes of obtaining reduced sales charges pursuant to
concurrent purchases and the right of accumulation. In order to accomplish this,
however, investors must designate on the Account Registration form the accounts
that are to be combined for this purpose. Investors can only designate accounts
that are open at the time of the concurrent purchases and when the right of
accumulation is exercised.
LETTER OF INTENT
You may obtain a reduced sales charge by means of a written Letter of Intent
which expresses your intention to invest, within a period of 13 months, a
certain amount in Shares of any of the American Performance Funds which charge a
sales load. Each purchase of Shares under a Letter of Intent will be made at the
public offering price plus the sales charge applicable at the time of such
purchase to a single transaction of the total dollar amount indicated in the
Letter of Intent. A Letter of Intent may include purchases of Shares made not
more than 90 days prior to the date the investor signs a Letter of Intent;
however, the 13-month period during which the Letter of Intent is in effect will
begin on the date of the earliest purchase to be included.
prospectus
24
<PAGE> 59
A Letter of Intent is not a binding obligation upon the investor to purchase the
full amount indicated. The minimum initial investment under a Letter of Intent
is 5% of such amount. Shares purchased with the first 5% of such amount will be
held in escrow (while remaining registered in the name of the investor) to
secure payment of the higher sales charge applicable to the Shares actually
purchased if the full amount indicated is not purchased. Such escrowed Shares
will be involuntarily redeemed to pay the additional sales charge, if necessary.
Dividends on escrowed Shares, whether paid in cash or reinvested in additional
Shares are not subject to escrow. The escrowed Shares will not be available for
disposal by the investor until all purchases pursuant to the Letter of Intent
have been made or the higher sales charge has been paid. When the full amount
indicated has been purchased, the escrow will be released.
Additionally, if the total purchases within the 13-month period exceed the
amount specified, an adjustment will be made to reflect further reduced sales
charges applicable to such purchases. Adjustments for these purchases and
purchases made during the 90-day period prior to submission of the Letter of
Intent will be made at the conclusion of the 13-month period and in the form of
additional shares credited to the shareholder's account at the then current
Public Offering Price applicable to a single purchase of the total amount of the
total purchase.
For further information, interested investors should contact the Distributor.
Letter of Intent privileges may be amended or terminated without notice at any
time by the Distributor.
EXCHANGE PRIVILEGE
Shares of any Bond Investment Fund may be exchanged without payment of a sales
charge for Shares of any other American Performance Fund having a sales charge
equal to or less than that of the Bond Investment Fund Shares sought to be
exchanged. If the Shareholder exercising the exchange privilege paid a sales
charge on the exchanged Shares that is less than the sales charge applicable to
the Shares sought to be acquired through the exchange, such Shareholder must pay
a sales charge on the exchange equal to the difference between the sales charge
paid for the exchanged Shares and the sales charge applicable to the Shares
sought to be acquired through the exchange. The exchange will be made on the
basis of the relative net asset values of the Shares exchanged. An exchange is
considered a sale of Shares and may result in a capital gain or loss for federal
income tax purposes. If the Shareholder exercising the exchange privilege paid a
sales charge on the exchanged Shares and held them for less than 91 days, for
purposes of determining the amount of the capital gain or loss, such Shareholder
must reduce his or her cost basis of the exchanged Shares by the lesser of (1)
the sales charge paid for those Shares, or (2) the sales charge waived on the
exchange. The sales charge is treated as incurred in connection with the
acquisition of the newly exchanged-for Shares. The exchange privilege may only
be exercised in states where the exchange may legally be made. The Funds reserve
the right to eliminate or to alter the terms of this exchange offer upon sixty
days' notice to Shareholders.
A Shareholder wishing to exchange his or her Shares may do so by contacting the
Funds at (800) 762-7085 or by providing written instructions to the Distributor.
Any Shareholder who wishes to make an exchange must have received a current
Prospectus of the Fund in which he or she wishes to invest before the exchange
will be effected.
prospectus
25
<PAGE> 60
HOW TO REDEEM SHARES
Shares may ordinarily be redeemed by mail or by telephone. Shareholders may
redeem their Shares without charge on any day that net asset value is calculated
(see "VALUATION OF SHARES"). However, all or part of a Customer's Shares may be
redeemed in accordance with instructions and limitations pertaining to his or
her account held at a Participating Organization.
BY MAIL
Shares may be redeemed by mail by sending a written request to the Distributor
in care of the Funds' Custodian at Bank of Oklahoma, N.A., Attention: American
Performance Funds, Department 12, Tulsa, Oklahoma 74182. The Distributor may
require a signature guarantee by an eligible guarantor institution. For purposes
of this policy, the term "eligible guarantor institution" shall include banks,
brokers, dealers, credit unions, securities exchanges and associations, clearing
agencies and savings associations as those terms are defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. The Distributor reserves the right to
reject any signature guarantee if (i) it has reason to believe that the
signature is not genuine, (ii) it has reason to believe that the transaction
would otherwise be improper, or (iii) the guarantor institution is a broker or
dealer that is neither a member of a clearing corporation nor maintains net
capital of at least $100,000. The signature guarantee requirements will be
waived if all of the following conditions apply: (1) the redemption check is
payable to the Shareholder(s) of record, and (2) the redemption check is mailed
to the Shareholder(s) at the address of record. The Shareholder may also have
the proceeds mailed or sent electronically to a commercial bank account
previously designated on the Account Registration form or by written instruction
to the Distributor. There is no charge for having redemption requests mailed to
a designated bank account.
BY TELEPHONE
Shares may be redeemed by telephone if the Account Registration form reflects
that the Shareholder has that capability. The Shareholder may have the proceeds
mailed to his or her address or mailed or sent electronically to a commercial
bank account previously designated on the Account Registration. Under most
circumstances, payments will be transmitted on the next Business Day following
receipt of a valid request for redemption. Electronic payment requests may be
made by the Shareholder by calling the Funds at (800) 762-7085. The Transfer
Agent may reduce the amount of a wire redemption payment by the Custodian's
then-current wire redemption charge (presently $15.00). Neither the Distributor,
the Transfer Agent, the Investment Adviser, nor the Funds will be liable for any
losses, damages, expenses or costs arising out of any telephone transaction
(including exchanges and redemptions) effected in accordance with the Funds'
telephone transaction procedures, upon instructions reasonably believed to be
genuine. The Funds will employ procedures designed to provide reasonable
assurance that the instructions communicated by telephone are genuine; if these
procedures are not followed, the Funds may be liable for any losses due to
unauthorized or fraudulent instructions. These procedures include recording all
phone conversations, sending confirmations to shareholders within 72 hours of
the telephone transaction, verifying the account name and a shareholder's
account number or tax identification number and sending redemption proceeds only
to the address of record or to a previously authorized account. If, due to
temporary adverse conditions, investors are unable to effect telephone
transactions, Shareholders may also mail the redemption
prospectus
26
<PAGE> 61
request to the Distributor at the address listed above under "HOW TO REDEEM
SHARES -- By Mail." The telephone redemption option will be suspended for a
period of 10 days following a telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan enables Shareholders of the Funds to make regular
monthly or quarterly redemptions of Shares if their account has at least
$10,000. With Shareholder authorization, the Transfer Agent will automatically
redeem Shares at the net asset value on the dates of the withdrawal and have a
check in the amount specified mailed to the Shareholder. The required minimum
withdrawal is $100. To participate in the Systematic Withdrawal Plan,
Shareholders should call (800) 762-7085 for more information. Purchases of
additional Shares concurrent with withdrawals may be disadvantageous to certain
Shareholders because of tax liabilities. To change the Systematic Withdrawal
instructions, a Shareholder must submit a written request to the Distributor. A
Shareholder may discontinue the feature by submitting a written request to or by
calling the Funds.
OTHER INFORMATION REGARDING REDEMPTIONS
All redemption orders are effected at the net asset value per Share next
determined after receipt of a valid request for redemption, as described above.
Payment to Shareholders for Shares redeemed will be made within the settlement
requirements defined in the Securities Exchange Act of 1934, after receipt by
the Distributor of the request for redemption. However, to the greatest extent
possible, the Trust will attempt to honor requests from Shareholders for next
Business Day payments upon redemption of Shares if the request for redemption is
received by the Transfer Agent before the last Valuation Time on a Business Day
or, if the request for redemption is received after the last Valuation Time, to
honor requests for payment within two Business Days, unless it would be
disadvantageous to the Trust or the Shareholders of the particular Fund to sell
or liquidate portfolio securities in an amount sufficient to satisfy requests
for payments in that manner.
At various times, a Bond Investment Fund may be requested to redeem Shares for
which it has not yet received good payment. In such circumstances, the
forwarding of proceeds may be delayed for up to 15 days until payment has been
collected for the purchase of such Shares. The Bond Investment Funds intend to
pay cash for all Shares redeemed, but under abnormal conditions which make
payment in cash unwise, payment may be made wholly or partly in readily
marketable portfolio securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs in converting such
securities to cash.
Due to the relatively high cost of handling small investments, each Bond
Investment Fund reserves the right to redeem, at net asset value, the Shares of
any Shareholder if, because of redemptions of Shares by or on behalf of the
Shareholder, the account of such Shareholder in any Bond Investment Fund has a
value of less than $500. Accordingly, an investor purchasing Shares of any Bond
Investment Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems some of his or her
Shares. Before any Bond Investment Fund exercises its right to redeem such
Shares and to send the proceeds to the Shareholder, the Shareholder will be
given notice that the value of the Shares in his or her account is less than the
minimum amount and will be allowed
prospectus
27
<PAGE> 62
60 days to make an additional investment in such Fund in an amount which will
increase the value of the account to at least $500.
See the Funds' Statement of Additional Information -- "ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION" -- for examples of when the right of redemption may be
suspended.
DIVIDENDS
Net investment income of each Bond Investment Fund is declared daily as a
dividend and paid monthly to persons who are Shareholders at the close of
business on the day of declaration. Net capital gain income is distributed at
least once a year. A Shareholder will automatically receive all income dividends
and capital gains distributions in additional full and fractional Shares at net
asset value as of the ex-dividend date, unless the Shareholder elects to receive
dividends or distributions in cash. Reinvested dividends receive the same tax
treatment as dividends paid in cash. Such election, or any revocation thereof,
must be made in writing to the Distributor at: BISYS Fund Services, 3435 Stelzer
Road, Columbus, Ohio 43219 and will become effective with respect to dividends
and distributions having record dates after its receipt by the Distributor.
Shareholders may elect to have all income, dividends, and capital gains
distributions paid by check or reinvested in the Fund. If you elect to receive
distributions paid by check and the check (1) is returned and marked as
"undeliverable" or (2) remains uncashed for six months, your payment election
will be changed automatically and your future dividend and capital gains
distribution will be reinvested in the Fund at the per share net asset value
determined as of the date of payment of the distribution. In addition, any
undeliverable check that remains uncashed for six months will be canceled and
reinvested in the Fund at the per share net asset value determined as of the
date of cancellation.
FEDERAL INCOME TAXES
Each of the Funds is treated as a separate entity for federal income tax
purposes. Each Fund intends to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"), and intends to
distribute all of its net investment income and capital gains so that it is not
required to pay federal income taxes on amounts so distributed to Shareholders.
Shareholders will be advised at least annually as to the federal income tax
consequences of distributions made during the year.
A Shareholder's receipt of a distribution of ordinary income and/or an excess of
net short-term capital gain over net long-term capital loss is treated as a
receipt of ordinary income, whether such distribution is paid in cash or in
additional shares. It is not expected that the dividends-received deduction for
corporations will apply to these distributions.
Distributions designated by each Bond Investment Fund as deriving from net gains
on securities held for more than one year but not more than 18 months or from
net gains on securities held for more than 18 months are generally taxable to
Shareholders as such in the year in which they are received, regardless of how
long the Shareholder has held Shares in the Bond Investment Fund. Such
distributions are not eligible for the dividends-received deduction.
prospectus
28
<PAGE> 63
A Shareholder will generally recognize capital gain or loss on the sale or
exchange of Shares in a Bond Investment Fund. If a Shareholder disposes of
Shares in the Bond Investment Fund at a loss before holding such Shares for
longer than 6 months, such loss will be treated as a long-term capital loss to
the extent the Shareholder has received a capital gain dividend on the Shares.
Prior to purchasing Shares, the impact of dividends or capital gains
distributions which are expected to be declared or have been declared, but have
not been paid, should be carefully considered. Dividends or capital gains
distributions paid after a purchase of Shares are subject to federal income
taxes, although in some circumstances the dividends or distributions may be, as
an economic matter, a return of capital.
Dividends designated as exempt-interest dividends by the Intermediate Tax-Free
Bond Fund may be treated by such Fund's Shareholders as items of interest
excludable from their gross income for federal income tax purposes. However,
such dividends may be taxable to Shareholders under state or local law as
ordinary income even though all or a portion of the amounts may be derived from
interest on tax-exempt obligations which, if realized directly, would be exempt
from such taxes. In determining net exempt-interest income, expenses of the
Intermediate Tax-Free Bond Fund are allocated to gross tax-exempt interest
income in the proportion that the gross amount of such interest income bears to
the Intermediate Tax-Free Bond Fund's total gross income, excluding net capital
gains. Shareholders are advised to consult a tax adviser with respect to whether
exempt-interest dividends retain the exclusion if such Shareholder would be
treated as a "substantial user" of a facility financed through certain private
activity bonds or a "related person" to such user as defined in the Code.
Interest on indebtedness incurred by a Shareholder to purchase or carry shares
is not deductible for federal income tax purposes to the extent the Intermediate
Tax-Free Bond Fund distributes exempt-interest dividends during the
Shareholder's taxable year.
To the extent the Intermediate Tax-Free Bond Fund invests in securities the
interest on which is subject to the federal alternative minimum tax,
Shareholders, depending on their tax status, may be subject to the federal
alternative minimum tax on that part of the Fund's distributions derived from
those securities. Under normal market conditions, not more than 20% of the
Intermediate Tax-Free Bond Fund's total assets will be invested in securities,
the interest on which is treated as a preference item for purposes of the
federal alternative minimum tax for individuals. Interest income on all
Municipal Securities is included in "adjusted current earnings" for purposes of
computing the alternative minimum tax applicable to corporate shareholders of
the Intermediate Tax-Free Bond Fund.
Under the Code, if a Shareholder receives an exempt-interest dividend with
respect to any Share and such Share is held for six months or less, any loss on
the sale or exchange of such Share will be disallowed to the extent of the
amount of such exempt-interest dividend.
The Intermediate Tax-Free Bond Fund may at times purchase Municipal Securities
at a discount from the price at which they were originally issued. For federal
income tax purposes, some or all of this market discount will be included in the
Intermediate Tax-Free Bond Fund's ordinary income and will be taxable to
shareholders as such when it is distributed to them.
To the extent dividends paid to Shareholders of the Intermediate Tax-Free Bond
Fund are derived from taxable income (for example, from interest on certificates
of deposit, market discount or repurchase
prospectus
29
<PAGE> 64
agreements), or from long-term or short-term capital gains, such dividends will
be subject to federal income tax, whether such dividends are paid in the form of
cash or additional shares.
Additional information regarding federal income taxes is contained in the
Statement of Additional Information under "INVESTMENT OBJECTIVE AND
POLICIES -- Additional Tax Information Concerning All the Funds" and "Additional
Tax Information Concerning the Intermediate Tax-Free Bond Fund." However, the
foregoing and the material in the Statement of Additional Information are only
brief summaries of some of the important tax considerations generally affecting
the Bond Investment Funds and their Shareholders. In addition, the foregoing
discussion and the federal tax information in the Statement of Additional
Information are based on tax laws and regulations which are in effect as of the
date of this Prospectus; these laws and regulations may subsequently change.
Prospective investors in a Bond Investment Fund are advised to consult their tax
adviser with special reference to their own tax situations, including the
potential application of state and local taxes.
DISTRIBUTION
Shares of the Bond Investment Funds are sold on a continuous basis by the
distributor for the Funds, BISYS Fund Services (the "Distributor"). Under the
Funds' Distribution and Shareholder Services Plan (the "Distribution Plan"), the
Bond Investment Funds will pay a monthly distribution fee (also referred to as a
12b-1 Fee) to the Distributor as compensation for its services in connection
with the Distribution Plan at an annual rate equal to the lesser of(1) such fee
as may from time to time be agreed upon in writing by the Funds and the
Distributor, or (2) twenty-five one-hundredths of one percent (0.25%) of the
average daily net assets of each of the Bond Investment Funds. The Distributor
may use the distribution fee to provide distribution assistance with respect to
the Bond Investment Funds' Shares or to provide Shareholder services to the
holders of the Bond Investment Funds' Shares ("Customers") purchased through
financial institutions and intermediaries, broker-dealers, or similar entities,
including affiliates or subsidiaries of the Distributor ("Participating
Organizations") pursuant to contractual arrangements with the Distributor under
the Distribution Plan.
The distribution fee will be payable without regard to whether the amount of the
fee is more or less than the actual expenses incurred in a particular year by
the Distributor in connection with distribution assistance or Shareholder
services rendered by the Distributor itself or incurred by the Distributor
pursuant to the contractual agreement entered into under the Distribution Plan.
The Glass-Steagall Act and other applicable laws generally prohibit banks from
engaging in the business of underwriting securities, but in general do not
prohibit banks from purchasing securities as agent for and upon the order of
customers. Accordingly, banks acting as Participating Organizations may provide
only those services which, in the banks' opinion, are consistent with the then
current legal requirements. It is possible, however, that future legislative,
judicial or administrative action affecting the securities activities of banks
will cause the Funds to alter or discontinue their arrangements with banks that
act as Participating Organizations, or change their method of operations. It is
not anticipated, however, that any change in the Funds' method of operations
would affect their net asset value per share or result in financial loss to any
customer. See the Statement of Additional Information for further information
regarding the Distribution Plan and "MANAGEMENT OF THE BOND
prospectus
30
<PAGE> 65
INVESTMENT FUNDS -- Banking Laws" for information concerning the applicability
of the Glass-Steagall Act to the Investment Adviser's investment advisory
services to the Funds.
MANAGEMENT OF THE BOND INVESTMENT FUNDS
TRUSTEES OF THE FUNDS
Overall responsibility for management of the Bond Investment Funds rests with
the Board of Trustees of the Funds, who are elected by the Shareholders of the
Funds. The Funds will be managed by the Trustees in accordance with the laws of
the Commonwealth of Massachusetts governing business trusts. There are currently
four Trustees, of whom three are not "interested persons" of the Funds within
the meaning of that term under the 1940 Act. The Trustees, in turn, elect the
officers of the Funds to supervise actively the Funds' day-to-day operations.
The Trustees of the Funds, their addresses, and their principal occupations
during the past five years are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE FUNDS DURING PAST FIVE YEARS
- ---------------------------- ---------------------- -------------------------------------------------------
<S> <C> <C>
Walter B. Grimm* Chairman and Trustee From June, 1992 to present, employee of BISYS Fund
3435 Stelzer Road Services; from 1987 to June, 1992, President of Leigh
Columbus, Ohio 43219 Consulting/ Investments (investment firm).
Michael J. Hall Trustee From December, 1995 to present, Vice President and
7130 South Lewis, Suite 850 Chief Financial Officer, Worldwide Sports &
Tulsa, Oklahoma 74136 Recreation, Inc.; from January, 1994 to present, Vice
President and Chief Financial Officer, Pexco
Holdings, Inc.; from 1991 to December, 1993, Senior
Vice President, Finance and Administration, Chief
Financial Officer, Treasurer, and Director of
Operations, Europe/Africa/Middle East Region of T.D.
Williamson, Inc. (a heavy equipment manufacturer).
Perry A. Wimpey Trustee From January, 1992 to present, Local Financial and
4843 S. 69th East Avenue Regulatory Consultant; from June, 1985 to January,
Tulsa, Oklahoma 74145 1992, Senior Vice President and Chief Financial
Officer, ONEOK Inc. (an energy company).
I. Edgar Hendrix Trustee From June, 1983 to present, Vice President and
8 East 3rd Street Treasurer, Parker Drilling Co.
Tulsa, Oklahoma 74103
</TABLE>
- ------------
*Indicates an "interested person" of the Funds as defined in the 1940 Act.
The Trustees receive fees and are reimbursed for their expenses in connection
with each meeting of the Board of Trustees they attend. However, no officer or
employee of an Investment Adviser, Sub-Adviser, or the Administrator of the
Funds receives any compensation from the Funds for acting as a Trustee. The
officers of the Funds receive no compensation directly from the Funds for
performing the duties of their offices. BISYS receives fees from each Fund of
the Funds for acting as Administrator and may receive additional income under
the Distribution Plan for the Funds.
INVESTMENT ADVISER
Bank of Oklahoma, N.A. serves as investment adviser to the Bond Investment
Funds. BOK, the largest trust company in the State of Oklahoma, is a subsidiary
of BOK Financial Corporation ("BOK Finan-
prospectus
31
<PAGE> 66
cial"). BOK Financial is controlled by its principal shareholder, George B.
Kaiser. Through its subsidiaries, BOK Financial provides a full array of trust,
commercial banking and retail banking services. Its non-bank subsidiaries engage
in various bank-related services, including mortgage banking and providing
credit life, accident, and health insurance on certain loans originated by its
subsidiaries.
BOK maintains offices in Tulsa and Oklahoma City and offers a variety of
services for both corporate and individual customers. Individual financial trust
services include personal trust management, administration of estates, and
management of individual investments and custodial accounts. For corporate
clients, the array of services includes management, administration and
recordkeeping of pension plans, thrift plans, 401(k) plans and master trust
plans. BOK has experience in providing investment advisory services to the Funds
and experience in managing collective investment funds with investment
portfolios and objectives comparable to those of the Funds. BOK also serves as
transfer agent and registrar for corporate securities, paying agent for
dividends and interest, and indenture trustee of bond issues. At December 31,
1996 BOK was responsible for approximately $8.1 billion in assets including
approximately $4.2 billion in assets under management and possessed average
equity capital of $322 million.
Subject to the general supervision of the Funds' Board of Trustees and in
accordance with the investment objective and restrictions of each Bond
Investment Fund, BOK manages the Bond Investment Funds, makes decisions with
respect to and places orders for all purchases and sales of their portfolio
securities, and maintains each Bond Investment Fund's records relating to such
purchases. The persons primarily responsible for the day-to-day management of
each Bond Investment Fund, as well as their previous business experience, are as
follows:
<TABLE>
<CAPTION>
PORTFOLIO MANAGER BUSINESS EXPERIENCE
- ------------------- ----------------------------------------------------------------
<S> <C>
William Bequette Manager of the Intermediate Tax-Free Bond Fund since its
inception. Since 1963, Mr. Bequette has been a portfolio manager
for BOK.
J. Brian Henderson Manager of the Bond Fund and the Intermediate Bond Fund since
January, 1993 and the Short-Term Income Fund since its
inception. In 1993, Mr. Henderson became a Portfolio Manager. In
1991, Mr. Henderson joined BOK as a Government Securities Trader
and was named Investment Officer of the Capital Market Division
in 1992. Prior to joining BOK, Mr. Henderson was a Financial
Consultant and Equity Analyst with Southwest Securities in
Dallas, Texas.
</TABLE>
For the services provided and expenses assumed pursuant to its investment
advisory agreement with the Funds, BOK receives a fee from each Bond Investment
Fund, computed daily and paid monthly equaling the lesser of (1) such fee as may
from time to time be agreed upon by the Funds and BOK, or (2) fifty-five
one-hundredths of one percent (0.55%) of each of the Bond, Intermediate Bond,
Intermediate Tax-Free Bond and Short-Term Income Fund's average daily net
assets. BOK also receives fee income from the Funds from several other sources.
(See "SALES CHARGES," "DISTRIBUTION," and "GENERAL INFORMATION -- Custodian and
Transfer Agent.") BOK may periodically waive all or a portion of its advisory
fee with respect to any Fund to increase the net income of such Bond
prospectus
32
<PAGE> 67
Investment Fund available for distribution as dividends. In order to reduce
operating expenses, BOK has currently established the investment advisory fees
at thirty-five one-hundredths of one percent (0.35%) of the Intermediate Bond,
Bond and Intermediate Tax-Free Bond Funds' average daily net assets. BOK
currently waives the investment advisory fees with respect to the Short-Term
Income Fund.
For investment advisory services for the fiscal year ended August 31, 1997, the
Bond Fund, the Intermediate Bond Fund and the Intermediate Tax-Free Bond Fund,
each paid BOK, after voluntary fee reductions, 0.35% of their average net
assets. For investment advisory services for the fiscal year ended August 31,
1997, the Short-Term Income Fund, after voluntary fee reductions, did not pay
any investment advisory fees to BOK.
ADMINISTRATOR AND DISTRIBUTOR
BISYS is the Administrator for the Funds, and also acts as the Funds' principal
underwriter and Distributor (the "Administrator" or the "Distributor," as the
context indicates). BISYS is a subsidiary of The BISYS Group, Inc., 150 Clove
Road, Little Falls, New Jersey 07424, a publicly owned company engaged in
information processing, loan servicing and 401(k) administration and
recordkeeping services to and through banking and other financial organizations.
The Administrator generally assists in all aspects of each Fund's administration
and operation.
For expenses assumed and services provided as Administrator pursuant to its
management and administration agreement with the Funds, BISYS receives a fee
from each Bond Investment Fund, computed daily and paid periodically, at the
lesser of (1) such fee as may from time to time be agreed upon in writing by the
Funds and the Administrator, and (2) an annual rate of twenty one-hundredths of
one percent (0.20%) of each Bond Investment Fund's average daily net assets. The
Administrator may periodically waive all or a portion of its administrative fee
with respect to a Fund to increase the net income of the Fund available for
distribution as dividends.
For administration services for the fiscal year ended August 31, 1997, the Funds
paid BISYS 0.20% of the average net assets of each of the Bond Investment Funds.
SUB-ADMINISTRATOR
BOK serves as the Sub-Administrator to the Funds pursuant to an agreement
between the Administrator and BOK. Pursuant to this agreement, BOK assumed many
of the Administrator's duties, for which BOK receives a fee, paid by the
Administrator, calculated at an annual rate of five one-hundredths of one
percent (0.05%) of each Fund's average net assets.
EXPENSES
The Investment Adviser and the Administrator each bear all expenses in
connection with the performance of their services as investment adviser and
general manager and administrator, respectively, other than the cost of
securities (including brokerage commissions) purchased for the Funds. Each Bond
Investment Fund bears the following expenses relating to its respective
operations: taxes, interest, brokerage fees and commissions, fees and travel
expenses of the Trustees of the Funds, Securities and Exchange Commission fees,
state securities qualification fees, costs of preparing and
prospectus
33
<PAGE> 68
printing prospectuses for regulatory purposes and for distribution to current
Shareholders, outside auditing and legal expenses, advisory and administration
fees, fees and reasonable out-of-pocket expenses of the custodian and transfer
agent, expenses incurred for pricing securities owned by the particular Fund,
certain insurance premiums, costs of maintenance of the Funds' existence, costs
of Shareholders' and Trustees' reports and meetings, and any extraordinary
expenses incurred in each Fund's operation.
BANKING LAWS
The Investment Adviser believes that it may perform the investment advisory
services for the Bond Investment Funds contemplated by its agreements with the
Funds and by this Prospectus without violating the Glass-Steagall Act. Future
changes in federal or state statutes and regulations relating to permissible
activities of banks or bank holding companies and their subsidiaries and
affiliates as well as further judicial or administrative decisions or
interpretations of present and future statutes and regulations could change the
manner in which the Investment Adviser could continue to perform such services
for the Funds. See the Statement of Additional Information under the heading
"MANAGEMENT OF THE FUNDS -- Glass-Steagall Act" for further discussion of
applicable banking laws and regulations.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
GENERAL INFORMATION
DESCRIPTION OF THE FUNDS AND THEIR SHARES
The Bond Fund, Intermediate Bond Fund, Intermediate Tax-Free Bond Fund, and
Short-Term Income Fund represent four separate series of units of beneficial
interest ("Shares") of The American Performance Funds, a Massachusetts business
trust which was organized in October of 1987 and began active operations in
August of 1990. The organizational expenses of the Short-Term Income Fund will
be capitalized and amortized during the Fund's first two years of operations.
Such amortization will reduce amounts available for distribution as dividends to
Shareholders. Each Share represents an equal proportionate interest in a Fund
with other Shares of the same series, and is entitled to such dividends and
distributions out of the income earned on the assets belonging to that Fund as
are declared at the discretion of the Trustees.
As of November 18, 1997, Bank of Oklahoma, N.A. (Bank of Oklahoma Tower, One
Williams Center, Tulsa, Oklahoma 74103) and its bank affiliates were the
Shareholders of record of 97.60% of the Bond Fund's Shares, 96.88% of the
Intermediate Bond Fund's Shares, 81.64% of the Intermediate Tax-Free Bond Fund's
Shares and 99.19% of the Short-Term Income Fund's Shares. As of November 25,
1997, Bank of Oklahoma, N.A. and its bank affiliates possessed on behalf of its
underlying accounts, voting and investment power with respect to 84.53% of the
Bond Fund's Shares, 85.73% of the Intermediate Bond Fund's Shares, 86.36% of the
Intermediate Tax-Free Bond Fund's Shares, and 97.97% of the Short-Term Income
Fund Shares and, as a consequence, Bank of Oklahoma, N.A. and its bank
affiliates may be deemed a controlling person of each of these Funds under the
1940 Act.
prospectus
34
<PAGE> 69
Shareholders are entitled to one vote for each Share, and a proportionate
fractional vote for any fraction of a Share, and will vote in the aggregate and
not by series except as otherwise expressly required by law.
Although the Funds are not required to hold annual meetings of Shareholders,
Shareholders have the right (1) to call a meeting to elect or remove one or more
of the Trustees of the Funds and (2) to be assisted by the Trustees in
communicating with other Shareholders of the Funds. Shareholder inquiries should
be directed to the Secretary of the Funds, at 3435 Stelzer Road, Columbus, Ohio
43219.
Overall responsibility for the management of the Funds is vested in the Board of
Trustees. See "MANAGEMENT OF THE BOND INVESTMENT FUNDS -- Trustees of the
Funds." Individual Trustees are elected by the Shareholders and may be removed
by the Board of Trustees or Shareholders in accordance with the provisions of
the Declaration of Trust and Bylaws of the Funds and Massachusetts law. See
"ADDITIONAL INFORMATION -- Miscellaneous" in the Statement of Additional
Information for further information.
CUSTODIAN AND TRANSFER AGENT
Bank of Oklahoma, N.A. serves as custodian for the Funds ("Custodian"). BISYS
Fund Services Ohio, Inc., an affiliate of BISYS, serves as the transfer agent
for the Funds ("Transfer Agent') and performs fund accounting.
PERFORMANCE INFORMATION
From time to time performance information for the Bond Investment Funds showing
their average annual total return and aggregate total return may be presented in
advertisements, sales literature and shareholder reports. Such performance
figures are based on historical earnings and are not intended to indicate future
performance. Total return will be calculated for the period since the
establishment of the Bond Investment Funds and will, unless otherwise noted,
reflect the imposition of the maximum sales charge. For the information of
Shareholders not subject to a sales charge, the Bond Investment Funds may also
publish total return figures which include no sales charge. Average annual total
return is measured by comparing the value of an investment in a Bond Investment
Fund at the beginning of the relevant period to the redemption value of the
investment at the end of the period (assuming immediate reinvestment of any
dividends or capital gains distributions) and annualizing the result. Aggregate
total return is measured similarly to average annual total return, however the
resulting difference is not annualized. The yield of a Bond Investment Fund is
determined by annualizing the Fund's net investment income per share during a
recent specified thirty-day period ending on the last day of the most recent
calendar quarter, and dividing that amount by the Fund's per share net asset
value on the last day of the period.
In addition, from time to time the Funds may present their respective
distribution rates in supplemental sales literature which is accompanied or
preceded by a prospectus and in Shareholder reports. Distribution rates will be
computed by dividing the distribution per share made by a Fund over a
twelve-month period by the maximum offering price per share. The calculation of
income in the distribution rate includes both income and capital gain dividends
and does not reflect unrealized gains
prospectus
35
<PAGE> 70
or losses, although a Fund may also present a distribution rate excluding the
effect of capital gains. The distribution rate differs from the yield, because
it includes capital items which are often non-recurring in nature, whereas yield
does not include such items. Distribution rates may also be presented excluding
the effect of a sales charge, if any.
The Intermediate Tax-Free Bond Fund may also present its tax equivalent yield
which reflects the amount of income subject to federal income taxation that a
taxpayer would have to earn in order to obtain the same after-tax income as that
derived from the yield of the Intermediate Tax-Free Bond Fund. The tax
equivalent yield will be significantly higher than the yield of the Intermediate
Tax-Free Bond Fund.
Investors may also judge the performance of any Bond Investment Fund by
comparing it to the performance of other mutual funds or mutual fund portfolios
with comparable investment objectives and policies through various mutual fund
or market indices such as those prepared by Dow Jones & Co., Inc., Standard &
Poor's Corporation, The Russell 2000 Index, and Morningstar, Inc. and to data
prepared by Lipper Analytical Services, Inc. Comparisons may also be made to
indices or data published in Money Magazine, Forbes, Barron's, The Wall Street
Journal, The New York Times, Business Week, Pensions and Investments, Fortune,
Ibbotson Associates, Inc., U.S.A. Today, CDA/Wiesenberger, American Banker,
Institutional Investor and local newspapers. In addition to performance
information, general information about these Funds that appears in a publication
such as those mentioned above may be included in advertisements and in reports
to Shareholders.
Total return and yield are functions of the type and quality of instruments held
in the portfolio, operating expenses, and market conditions. Consequently, total
return and yield will fluctuate and are not necessarily representative of future
results. Any fees charged by a Participating Organization with respect to
Customer accounts for investing in shares of Bond Investment Funds will not be
included in performance calculations; such fees, if charged, will reduce the
actual performance from that quoted. Further information regarding Performance
Comparisons may be found in the Statement of Additional Information under
"Performance Comparisons.
Additional information about the performance of each Bond Investment Fund is
contained in the Funds' annual report to Shareholders, which is available free
of charge by calling the telephone number on the front page of this Prospectus.
MISCELLANEOUS
Shareholders will receive unaudited semi-annual reports and annual reports
audited by independent public accountants.
As used in this Prospectus and in the Statement of Additional Information,
"assets belonging to" a Fund means the consideration received by the Funds upon
the issuance or sale of Shares in that Fund, together with all income, earnings,
profits, and proceeds derived from the investment thereof including any proceeds
from the sale, exchange, or liquidation of such investments, and any funds or
payments derived from any reinvestment of such proceeds, and any general assets
of the Funds not readily identified as belonging to a particular Fund that are
allocated to that Fund by the Funds' Board of Trustees. The Board of Trustees
may allocate such general assets in any manner it deems fair and
prospectus
36
<PAGE> 71
equitable. It is anticipated that the factor that will be used by the Board of
Trustees in making allocations of general assets to particular Funds will be the
relative net asset values of the respective Funds at the time of allocation.
Assets belonging to a particular Fund are charged with the direct liabilities
and expenses with respect to that Fund, and with a share of the general
liabilities and expenses of the Funds not readily identified as belonging to a
particular Fund that are allocated to that Fund in proportion to the relative
net asset values of the respective Funds at the time of allocation. The timing
of allocations of general assets and general liabilities and expenses of the
Fund to particular Funds will be determined by the Board of Trustees of the
Funds and will be in accordance with generally accepted accounting principles.
Determinations by the Board of Trustees of the Funds as to the timing of the
allocation of general liabilities and expenses and as to the timing and
allocable portion of any general assets with respect to a particular Fund are
conclusive.
As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding Shares" of the Funds or a particular Fund
means the affirmative vote, at a meeting of Shareholders duly called, of the
lesser of (a) 67% or more of the outstanding Shares of the Funds or such Fund
present at a meeting at which the holders of more than 50% of the outstanding
Shares of the Funds or such Fund are represented in person or by proxy, or (b)
the holders of more than 50% of the outstanding Shares of the Funds or such
Fund.
Inquiries regarding each Bond Investment Fund may be directed in writing to the
Funds at 3435 Stelzer Road, Columbus, Ohio, 43219, or by calling toll free (800)
762-7085.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE BOND
INVESTMENT FUNDS OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING BY THE BOND INVESTMENT FUNDS OR BY THE DISTRIBUTOR IN ANY JURISDICTION
IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
prospectus
37
<PAGE> 72
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 73
AMERICAN PERFORMANCE FUNDS
BOND INVESTMENT FUNDS
BOND FUND
INTERMEDIATE BOND FUND
INTERMEDIATE TAX-FREE BOND FUND
SHORT-TERM INCOME FUND
INVESTMENT ADVISER
Bank of Oklahoma, N.A.
Bank Oklahoma Tower
Tulsa, Oklahoma 74103
ADMINISTRATOR AND
DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-3055
LEGAL COUNSEL
Ropes & Gray
One Franklin Square
1301 K Street N.W.
Suite 800 East
Washington, DC 20005
AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
[AMERICAN PERFORMANCE FUNDS LOGO]
AMERICAN PERFORMANCE FUNDS
The Right Fit For Your Investment Goals
BOND FUND
INTERMEDIATE BOND FUND
INTERMEDIATE TAX-FREE BOND FUND
SHORT-TERM INCOME FUND
Prospectus
December 17, 1997
<PAGE> 74
CROSS REFERENCE SHEET
PROSPECTUS FOR AMERICAN PERFORMANCE EQUITY INVESTMENT FUNDS
<TABLE>
<CAPTION>
Form N-1A Part A Item Prospectus Caption
- --------------------- ------------------
<S> <C>
1. Cover Page Cover Page
2. Synopsis Fee Table
3. Condensed Financial Information Financial Highlights;
General Information - Performance
Information
4. General Description Cover Page;
of Registrant Investment Objectives; Investment
Policies and Special
Considerations; Investment
Restrictions; General Information -
Description of the Funds and their
Shares
5. Management of the Fund Management of the Equity
Investment Funds
5A. Management's Discussion of Fund Performance See the Registrant's Current
Annual Report
6. Capital Stock and How to Purchase
Other Securities Shares; How to Redeem Shares;
Sales Charges; Dividends; Federal
Income Taxes; General Information -
Description of the Funds and their
Shares; General Information
-Miscellaneous
7. Purchase of Securities Valuation of Shares; How
Being Offered to Purchase Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Inapplicable
</TABLE>
<PAGE> 75
<TABLE>
<S> <C>
American For performance, purchase,
Performance and
EQUITY INVESTMENT redemption information, call
Funds (800) 762-7085
Four Variable Net Asset Value 3435 Stelzer Road
Investment Portfolios of Columbus, Ohio 43219
American Performance Funds
</TABLE>
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
The American Performance Equity Investment Funds (the "Equity Investment
Funds") are four variable net asset value portfolios of the AMERICAN PERFORMANCE
FUNDS (the "Funds"), a diversified, open-end management investment company which
currently consists of ten separately managed portfolios. Each of the Equity
Investment Funds has a different investment objective, and the net asset value
per unit of beneficial interest ("Share") of each Equity Investment Fund may be
expected to fluctuate in accordance with the value of each Fund's portfolio
investments.
AMERICAN PERFORMANCE EQUITY FUND (the "Equity Fund") seeks growth of
capital and, secondarily, income by investing primarily in a diversified
portfolio of common stocks and securities convertible into common stocks.
AMERICAN PERFORMANCE AGGRESSIVE GROWTH FUND (the "Aggressive Growth Fund")
seeks long-term capital appreciation and, secondarily, income by investing
primarily in a diversified portfolio of common stocks and securities convertible
into common stocks of small to medium-size companies.
AMERICAN PERFORMANCE BALANCED FUND (the "Balanced Fund") seeks current
income and, secondarily, long-term capital growth by investing primarily in a
broadly diversified portfolio of securities, including common stocks, preferred
stocks and bonds.
(Continued on following page)
- --------------------------------------------------------------------------------
THE FUNDS' SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY, BANK OF OKLAHOMA, N.A. OR ANY OF ITS AFFILIATES. THE FUNDS' SHARES ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR BY ANY OTHER AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is December 17, 1997.
prospectus
<PAGE> 76
(Continued from previous page)
AMERICAN PERFORMANCE GROWTH EQUITY FUND (the "Growth Equity Fund") seeks
long-term capital appreciation and growth of income by investing primarily in a
diversified portfolio of common stocks and securities convertible into common
stocks.
Bank of Oklahoma, N.A., Tulsa, Oklahoma ("BOK") serves as the investment
adviser ("Investment Adviser") to each Equity Investment Fund. BISYS Fund
Services, Columbus, Ohio, ("BISYS") acts as the Equity Investment Funds'
Administrator and Distributor.
This Prospectus relates only to the Equity Investment Funds. The Funds also
include two money market portfolios to which BOK serves as Investment Adviser:
the American Performance Cash Management Fund (for which AMR Investment
Services, Inc. ("AMR") serves as Investment Sub-Adviser) and the American
Performance U.S. Treasury Fund, each of which seeks current income with
liquidity and stability of principal (collectively, the "American Performance
Money Market Funds"). The Funds also include four bond portfolios to which BOK
serves as Investment Adviser: the American Performance Bond Fund, the American
Performance Intermediate Bond Fund, and the American Performance Short-Term
Income Fund, each of which seeks current income, and the American Performance
Intermediate Tax-Free Bond Fund, which seeks current income exempt from Federal
taxation, through investing in diversified portfolios of bonds and other
fixed-income securities (collectively, the "American Performance Bond Investment
Funds"). Persons who wish to obtain a copy of the Prospectus for the American
Performance Money Market Funds or the American Performance Bond Investment Funds
may contact the Funds at the telephone number shown above.
A STATEMENT OF ADDITIONAL INFORMATION BEARING THE SAME DATE AS THIS
PROSPECTUS, HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. THE STATEMENT OF ADDITIONAL INFORMATION CAN BE
OBTAINED WITHOUT CHARGE BY WRITING OR CALLING THE FUNDS AT THE ADDRESS OR
TELEPHONE NUMBER SHOWN ABOVE.
This Prospectus sets forth the information about the Equity Investment
Funds that a prospective investor ought to know before investing. Investors
should read this Prospectus and retain it for future reference.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fee Table................................................................... 3
Financial Highlights........................................................ 5
Investment Objectives....................................................... 7
Investment Policies and Special Considerations.............................. 9
Investment Restrictions..................................................... 14
Valuation of Shares......................................................... 15
How to Purchase Shares...................................................... 16
Sales Charges............................................................... 18
Sales Charge Waivers........................................................ 19
Concurrent Purchases and Right of Accumulation.............................. 20
Letter of Intent............................................................ 20
Exchange Privilege.......................................................... 21
How to Redeem Shares........................................................ 21
Dividends................................................................... 23
Federal Income Taxes........................................................ 24
Distribution................................................................ 25
Management of the Equity Investment Funds................................... 26
General Information......................................................... 29
</TABLE>
prospectus
2
<PAGE> 77
FEE TABLE
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH
EQUITY GROWTH BALANCED EQUITY
FUND FUND FUND FUND
------ ---------- -------- ------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
- ------------------------------------------------------------------------------------------------------
Maximum Sales Load Imposed on Purchases(2) (as a percentage of
offering price)................................................ 5.00% 5.00% 5.00% 5.00%
Maximum Sales Load Imposed on Reinvested Dividends (as a
percentage of offering price).................................. 0 % 0% 0% 0 %
Deferred Sales Load (as a percentage of original purchase price
or redemption proceeds, if applicable)......................... 0 % 0% 0% 0 %
Redemption Fees(3) (as a percentage of amount redeemed, if
applicable).................................................... 0 % 0% 0% 0 %
Exchange Fees.................................................... $ 0 $ 0 $ 0 $ 0
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------------
Management Fees(4) (after voluntary fee reductions)............ 0.50% 0.50% 0.17% 0.50%
12b-1 Fees (after voluntary fee reductions with respect to the
Balanced Fund)............................................... 0.25% 0.25% 0.00%(5) 0.25%
Other Expenses................................................. 0.31% 0.33% 0.39%(6) 0.35% (7)
----- ----- ----- -----
Total Fund Operating Expenses(8) (after voluntary fee
reductions).................................................... 1.06% 1.08% 0.56% 1.10%
===== ===== ===== =====
EXAMPLE:
- ------------------------------------------------------------------------------------------------------
You would pay the following expenses on a $1,000 investment in
each of the Funds, assuming (1) 5% annual return and (2)
redemption at the end of each time period:
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH
EQUITY GROWTH BALANCED EQUITY
FUND FUND FUND FUND
------ ---------- -------- ------
<S> <C> <C> <C> <C>
1 Year........................................................... $ 60 $ 60 $ 55 $ 61
3 Years.......................................................... $ 82 $ 83 $ 67 $ 83
5 Years.......................................................... $106 $107 $ 80 $108
10 Years......................................................... $173 $175 $117 $177
</TABLE>
The purpose of the above table is to assist a potential purchaser of Shares
of any of the Equity Investment Funds in understanding the various costs and
expenses that an investor in each Fund will bear directly or indirectly. The
examples reflect voluntary reductions of investment advisory and/or 12b-1 Fees,
as applicable. Although the Investment Adviser and the Distributor currently
have agreed to these voluntary reductions, they may cease to provide these
reductions, which would have the effect of increasing the projected expenses set
forth above in the examples. Such expenses do not include any fees charged by
BOK or any of its affiliates to its customers' accounts which may have invested
in shares of a Fund. See "MANAGEMENT OF THE EQUITY INVESTMENT FUNDS," "SALES
CHARGES," and "DISTRIBUTION" for a more complete discussion of the transaction
expenses and annual operating expenses of each Fund. NASD rules generally limit
the amount that an Equity Investment Fund may pay under a Distribution Plan. An
Equity Investment Fund would stop accruing payments under the Distribution Plan
if, to the extent, and for as long as, such limit would otherwise be exceeded.
Long-term shareholders may pay more than the equivalent of the maximum front-end
sales charges otherwise permitted by the Rules of the National Association of
Securities Dealers, Inc.
THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
prospectus
3
<PAGE> 78
- ------------
(1) Participating Organizations (as defined in "DISTRIBUTION") may charge a
Customer's (as defined in "DISTRIBUTION") account fees for automatic
investment and other investment and trust services provided in connection
with investment in the Funds. (See "HOW TO PURCHASE SHARES.")
(2) There may be no sales load imposed upon purchases of shares of the Funds by
(1) investors who purchase through the Investment Adviser and who have an
existing trust relationship with the Investment Adviser; (2) employees of
the Investment Adviser, or its affiliates; (3) each Trustee of the Funds and
any employee of a company that constitutes the principal business activity
of a Trustee; (4) employees of the Distributor and its affiliates; (5)
orders placed on behalf of other investment companies distributed by The
BISYS Group, Inc. or its affiliated companies; (6) existing Shareholders who
own Shares in any of the Equity Investment Funds within their trust accounts
and purchase additional Shares outside of their trust relationship; and (7)
investors within wrap accounts.
(3) A wire redemption charge may be deducted from the amount of a wire
redemption payment made at the request of a holder of Shares. The current
charge, which is subject to change upon notice to Shareholders, is $15.00.
(See "HOW TO REDEEM SHARES--By Telephone.")
(4) In order to reduce operating expenses, the Investment Adviser has
voluntarily agreed to reduce the investment advisory fees. Absent a
voluntary fee reduction, the investment advisory fees would be 0.69% of the
average daily net assets of the Equity Fund, the Aggressive Growth Fund and
the Growth Equity Fund, and 0.74% of the average daily net assets of the
Balanced Fund. With respect to the Balanced Fund, the Management Fee has
been restated to reflect the current fee reduction in effect.
(5) In order to reduce operating expenses, the Distributor has voluntarily
agreed to reduce the 12b-1 Fees. Absent a voluntary fee reduction, the 12b-1
Fee would be 0.25% of the average daily net assets of the Balanced Fund.
(6) Other Expenses have been restated to reflect the current fees.
(7) Other Expenses is based on estimated amounts for the current fiscal year.
(8) Absent voluntary fee reductions, the Total Fund Operating Expenses would be
1.25%, 1.27%, 1.38% and 1.29%, respectively, of the average daily net asset
of the Equity Fund, Aggressive Growth Fund, Balanced Fund and the Growth
Equity Fund.
prospectus
4
<PAGE> 79
FINANCIAL HIGHLIGHTS
The American Performance Funds (the "Funds") were organized as a Massachusetts
business trust and began active operations in August of 1990. The Funds
currently consist of ten series of units of beneficial interests ("Shares").
Four such series represent interests in the Equity Fund, the Aggressive Growth
Fund, the Balanced Fund and the Growth Equity Fund.
The Tables below set forth certain financial highlights for the Equity Fund, the
Aggressive Growth Fund and the Balanced Fund for the periods indicated. The most
recent five years of each Table are part of the Funds' financial statements
which are included in the Funds' Annual Report and are incorporated by reference
into the Statement of Additional Information, which a Shareholder may obtain by
calling the Funds. The financial statements have been audited by KPMG Peat
Marwick LLP, independent public accountants for the Funds, whose report thereon,
is included in the Funds' Annual Report. The Growth Equity Fund had not
commenced operations as of August 31, 1997.
<TABLE>
<CAPTION>
EQUITY FUND
--------------------------------------------------------------------------
SEPTEMBER 28,
YEAR ENDED AUGUST 31, 1990 TO
---------------------------------------------------------- AUGUST 31,
1997 1996 1995 1994 1993 1992 1991(a)
-------- ------- ------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 13.73 $ 12.33 $ 11.85 $ 12.78 $ 11.31 $ 12.13 $ 10.00
-------- ------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income............ 0.13 0.18 0.20 0.14 0.14 0.17 0.30
Net realized and unrealized gains
(losses) on investments........ 5.03 2.04 1.77 0.40 1.56 (0.63) 2.13
-------- ------- ------- ------- ------- ------- -------
Total from Investment
Activities................... 5.16 2.22 1.97 0.54 1.70 (0.46) 2.43
-------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income............ (0.13) (0.18) (0.19) (0.14) (0.14) (0.17) (0.30)
Net realized gains............... (1.42) (0.64) (0.39) (1.33) (0.09) (0.19) --
In excess of net investment
income......................... (0.01) -- -- -- -- -- --
In excess of net realized
gains.......................... -- -- (0.91) -- -- -- --
-------- ------- ------- ------- ------- ------- -------
Total Distributions............ (1.56) (0.82) (1.49) (1.47) (0.23) (0.36) (0.30)
-------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD....... $ 17.33 $ 13.73 $ 12.33 $ 11.85 $ 12.78 $ 11.31 $ 12.13
======== ======= ======= ======= ======= ======= =======
Total Return (excludes sales
charge)............................ 40.23% 18.53% 19.74% 4.66% 15.12% (3.98)% 24.57%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of period
(000).......................... $170,887 $86,352 $76,398 $84,618 $58,015 $90,890 $73,362
Ratio of expenses to average net
assets......................... 1.06% 1.08% 1.14% 1.12% 1.16% 1.16% 1.17%(b)
Ratio of net investment income to
average net assets............. 0.88% 1.35% 1.73% 1.32% 1.09% 1.46% 3.01%(b)
Ratio of expenses to average net
assets*........................ 1.25% 1.27% 1.33% 1.31% 1.36% 1.39% 1.42%(b)
Ratio of net investment income to
average net assets*............ 0.69% 1.16% 1.54% 1.13% 0.88% 1.23% 2.76%(b)
Portfolio turnover............... 93.82% 67.46% 100.44% 159.30% 66.54% 51.26% 69.94%
Average commission rate(d)....... $ 0.0502 $0.0504 -- -- -- -- --
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by the total number of shares purchased and sold by the
Fund for which commissions were charged. Disclosure is not required for
periods ending prior to September 1, 1995.
prospectus
5
<PAGE> 80
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
----------------------------------------------------------------------
FEBRUARY 3,
YEAR ENDED AUGUST 31, 1992 TO
------------------------------------------------------- AUGUST 31,
1997 1996 1995 1994 1993 1992(a)
------- ------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 16.29 $ 16.31 $ 11.99 $ 11.96 $ 8.37 $ 10.00
------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income (loss)........ (0.06) (0.04) (0.06) (0.04) (0.03) 0.03
Net realized and unrealized gains
(losses) on investments........... 2.65 0.30 4.38 0.07 3.62 (1.63)
------- ------- ------- ------- ------- -------
Total from Investment
Activities...................... 2.59 0.26 4.32 0.03 3.59 (1.60)
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income (loss)........ -- -- -- -- -- (0.03)
Net realized gains.................. -- (0.28) -- -- -- --
------- ------- ------- ------- ------- -------
Total Distributions............... -- (0.28) -- -- -- (0.03)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD.......... $ 18.88 $ 16.29 $ 16.31 $ 11.99 $ 11.96 $ 8.37
======= ======= ======= ======= ======= =======
Total Return (excludes sales charge).... 15.90% 1.77% 36.03% 0.25% 42.89% (16.02)%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of period (000)... $58,982 $43,278 $38,008 $24,775 $11,012 $ 11,716
Ratio of expenses to average net
assets............................ 1.08% 1.11% 1.27% 1.35% 0.62% 0.28%(b)
Ratio of net investment income
(loss) to average net assets...... (0.56)% (0.35)% (0.62)% (0.69)% (0.24)% 0.58%(b)
Ratio of expenses to average net
assets*........................... 1.27% 1.30% 1.45% 1.55% 1.64% 1.47%(b)
Ratio of net investment income
(loss) to average net assets*..... (0.75)% (0.54)% (0.81)% (0.89)% (1.26)% (0.61)%(b)
Portfolio turnover.................. 76.47% 32.89% 27.16% 18.76% 59.47% 14.53%
Average commission rate(d).......... $0.0601 $0.0665 -- -- -- --
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operation.
(b) Annualized.
(c) Unannualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by the total number of shares purchased and sold by the
Fund for which commissions were charged. Disclosure is not required for
periods ending prior to September 1, 1995.
prospectus
6
<PAGE> 81
<TABLE>
<CAPTION>
BALANCED FUND
-----------------------------------
YEAR ENDED AUGUST
31, JUNE 1, 1995
------------------ TO AUGUST 31,
1997 1996 1995(a)
------- ------- -------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 11.28 $ 10.62 $ 10.00
------- ------- -------
INVESTMENT ACTIVITIES
Net investment income............................................. 0.41 0.35 0.08
Net realized and unrealized gains (losses) on investments......... 2.46 0.79 0.62
------- ------- -------
Total from Investment Activities................................ 2.87 1.14 0.70
------- ------- -------
DISTRIBUTIONS
Net investment income............................................. (0.41) (0.35) (0.08)
Net realized gains................................................ (0.36) (0.13) --
------- ------- -------
Total Distributions............................................. (0.77) (0.48) (0.08)
------- ------- -------
NET ASSET VALUE, END OF PERIOD........................................ $ 13.38 $ 11.28 $ 10.62
======= ======= =======
Total Return (excludes sales charge).................................. 26.33% 10.87% 6.98%(c)
RATIOS/SUPPLEMENT DATA:
Net Assets at end of period (000)................................. $30,249 $22,592 $12,842
Ratio of expenses to average net assets........................... 0.36% 0.38% 0.90%(b)
Ratio of net investment income to average net assets.............. 3.34% 3.27% 3.17%(b)
Ratio of expenses to average net assets*.......................... 1.38% 1.40% 1.92%(b)
Ratio of net investment income to average net assets*............. 2.32% 2.25% 2.15%(b)
Portfolio turnover................................................ 66.12% 71.89% 18.68%(b)
Average commission rate (d)....................................... $0.0531 $0.0792 --
</TABLE>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operation.
(b) Annualized.
(c) Unannualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by the total number of shares purchased and sold by the
Fund for which commissions were charged. Disclosure is not required for
periods ending prior to September 1, 1995.
INVESTMENT OBJECTIVES
EQUITY FUND
The investment objective of the Equity Fund is to seek growth of capital and,
secondarily, income by investing primarily in a diversified portfolio of common
stocks and securities convertible into common stocks. The Equity Fund is managed
using a "quantitative" investment approach. Individual stocks in a universe are
ranked according to their return characteristics. The approach seeks to measure
some or all of the following quantitative factors which the Investment Adviser
may supplement or modify from time to time: relative strength, earning revision
and acceleration, forecast earnings to price, and normal earnings to price. An
additional factor in stock selection is an attempt to structure the Equity
Fund's portfolio so as to be relatively neutral to the stocks comprising
Standard and Poor's Corporation's ("S&P") 500 Index regarding both industry
exposure and factor exposure (e.g., company size, yield, trading activity, labor
intensity, foreign-derived income, financial leverage, earnings variability,
book to price, earnings to price, growth, variability in markets and recent
success). The Equity Fund will not,
prospectus
7
<PAGE> 82
however, seek to match or track the performance of the S&P 500, nor limit
investments to stocks in that index.
Equity securities such as those in which the Equity Fund may invest are more
volatile and carry more risk than some other forms of investment, including
investments in short-term high-grade fixed income funds. The Equity Fund
portfolio of securities will be composed of securities believed by its
Investment Adviser to be generally less volatile and carry less risk than those
generally held by an aggressive growth fund. Depending upon the performance of
the Equity Fund's investments, the net asset value per share of such fund may
decrease instead of increase.
AGGRESSIVE GROWTH FUND
The investment objective of the Aggressive Growth Fund is to seek long-term
capital appreciation and, secondarily, income by investing primarily in a
diversified portfolio of common stocks and securities convertible into common
stocks of small to medium-size companies. The inherent risks of small to
medium-size companies are two-fold: business risk and market risk. Business risk
refers to the possibility that a company may do poorly due to competitive or
financial factors. Market risk refers mainly to the relatively small number of
shares publicly owned as compared to larger companies.
The Aggressive Growth Fund will tend to utilize a "bottom-up" approach to
securities selection. In this analysis, emphasis is placed upon the prospects of
each individual company rather than on its sector prospects. Particular
attention will be focused upon the prospects of above market earnings growth.
Other characteristics will include return on equity, product profile, condition
of the balance sheet and company management. Because the Aggressive Growth Fund
primarily seeks long-term return from capital appreciation, the Fund will be
managed in a manner that seeks to provide roughly the same level of income as an
aggressive growth fund, but less than an income fund. Also, the Aggressive
Growth Fund will attempt to achieve growth over a period of years that is
greater than that of an income fund. Depending upon the performance of the
Aggressive Growth Fund's investments, the net asset value per share of such fund
may decrease instead of increase.
BALANCED FUND
The investment objective of the Balanced Fund is to seek current income and,
secondarily, long-term capital growth by investing primarily in a broadly
diversified portfolio of securities, including common stocks, preferred stocks
and bonds. The portion of the Balanced Fund's assets invested in equity and debt
securities will vary in accordance with economic conditions, the general level
of common stock prices, interest rates and other relevant considerations,
including the risks associated with each investment medium. Although the
Balanced Fund seeks to reduce the risks associated with any one investment
medium by utilizing a variety of investments, performance will depend upon
additional factors such as timing and mix and the ability of its Investment
Adviser to judge and react to changing market conditions. Because the Balanced
Fund will invest in both debt and equity securities, the Balanced Fund is
expected to produce a higher level of current income than the Equity Fund and
the Aggressive Growth Fund.
prospectus
8
<PAGE> 83
GROWTH EQUITY FUND
The investment objective of the Growth Equity Fund is to seek long-term capital
appreciation by investing primarily in a diversified portfolio of common stocks
and securities convertible into common stocks. To achieve its objective, the
Fund under normal market conditions will invest substantially all, but not less
than 70%, of the value of its total assets in equity securities consisting of
common stocks or securities convertible into common stocks. The Fund will seek
to invest in companies with growth characteristics from a universe of equities
above a given market capitalization, currently $500 million. Growth companies
will generally be above average in such characteristics as past earnings per
share growth, future estimated earnings per share growth, sales per share
growth, and return on equity. The Fund may exhibit slightly more volatility than
the S&P 500 Index.
ALL EQUITY INVESTMENT FUNDS
The investment objectives with respect to the Equity Fund, the Aggressive Growth
Fund, the Balanced Fund or the Growth Equity Fund may not be changed without a
vote of the holders of a majority of the outstanding Shares of that Equity
Investment Fund (as defined in the Statement of Additional Information). There
can be no assurance that the investment objectives of the Equity Fund, the
Aggressive Growth Fund, the Balanced Fund or the Growth Equity Fund will be
achieved.
Additionally, the Equity Fund, the Aggressive Growth Fund, the Balanced Fund and
the Growth Equity Fund may engage in certain investment techniques which may
subject the Funds to certain risks (see "INVESTMENT POLICIES AND SPECIAL
CONSIDERATIONS").
INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS
Under normal market conditions, the Equity Fund, the Aggressive Growth Fund and
the Growth Equity Fund will invest at least 70% of the value of their respective
total assets in common stocks and securities convertible into common stocks of
companies believed by the Investment Adviser to be characterized by sound
management and the ability to finance expected growth. The Equity Fund, the
Aggressive Growth Fund and the Growth Equity Fund may also invest up to 30% of
their respective total assets in preferred stocks, corporate bonds, notes,
warrants, and cash equivalents. Corporate bonds will be rated at the time of
purchase within the three highest ratings categories assigned by a nationally
recognized statistical ratings organization (an "NRSRO") (e.g., at least "A" by
Moody's Investors Services ("Moody's") or S&P) or, if not rated, found by the
Investment Adviser under guidelines established by the Funds' Board of Trustees
to be of comparable quality.
"Cash equivalents" are deposits or high quality, interest-bearing instruments
with a remaining maturity of one year or less. The purpose of cash equivalents
is to provide liquidity and income at money market rates while minimizing the
risk of decline in value to the maximum extent possible. The instruments may
include, but are not limited to, commercial paper, domestic and Eurodollar
certificates of deposit, repurchase agreements, bankers' acceptances, U.S.
Treasury bills, master demand notes, agency discount notes, bank money market
deposit accounts and money market mutual funds. Each Equity Investment Fund will
only purchase commercial paper rated at the time of purchase within the three
highest ratings categories assigned by an NRSRO (e.g., A-1 by S&P, Prime-1 by
Moody's or F-1 by Fitch Investors Service) or, if not rated, found by the
Investment Adviser under guidelines established
prospectus
9
<PAGE> 84
by the Funds' Board of Trustees to be of comparable quality. See "Appendix" to
the Statement of Additional Information for an explanation of these ratings.
During temporary defensive periods as determined by the Investment Adviser, an
Equity Investment Fund may hold up to 100% of its total assets in cash
equivalents.
Under normal market conditions, the Balanced Fund will invest in equity
securities consisting of common stocks but may also invest in other equity-type
securities such as warrants, convertible preferred stocks and convertible debt
instruments. The Balanced Fund's equity investments will be in companies
believed by its Investment Adviser to be undervalued. The Balanced Fund's debt
securities will consist of securities such as bonds, notes, debentures and money
market instruments. The average dollar-weighted portfolio maturity of debt
securities held by the Balanced Fund will vary according to market conditions
and interest rate cycles and will range between 1 year and 30 years under normal
market conditions. While securities with longer maturities tend to produce
higher yields, the price of longer maturity securities is also subject to
greater market fluctuations as a result of changes in interest rates. The
Balanced Fund's debt securities will consist of high grade securities, which are
those securities rated within the three highest ratings categories assigned by
an NRSRO at the time of purchase (e.g., at least "A" from Moody's or S&P
(including all sub-classifications indicated by modifiers of such "A" ratings))
or, if not rated, found by the Investment Adviser under guidelines established
by the Funds' Board of Trustees to be of comparable quality.
It is a fundamental policy of the Balanced Fund that it will invest at least 25%
of its total assets in fixed-income securities. For this purpose, fixed-income
securities include debt securities, mortgage-related securities, nonconvertible
preferred stock and that portion of the value of securities convertible into
common stock, including convertible preferred stock and convertible debt, which
is attributable to the fixed-income characteristics of those securities.
Certain debt securities such as, but not limited to, mortgage backed securities
and CMOs, as well as securities subject to prepayment of principal prior to the
stated maturity date, are expected to be repaid prior to their stated maturity
dates. The Adviser determines the "effective maturity" of the securities based
on the expected payment date (which is earlier than the stated maturity dates of
the securities). For purposes of calculating the Balanced Fund's weighted
average portfolio maturity, the effective maturity of such securities, as
determined by the Adviser, will be used.
INVESTMENT COMPANY SECURITIES
Each of the Equity Investment Funds may invest in shares of other investment
companies, including other American Performance Funds. However, none of the
Equity Investment Funds may invest more than 5% of its total assets in the
securities of any one investment company, nor may any Equity Investment Fund own
more than 3% of the outstanding securities of any investment company or invest
more than 10% of its total assets in the securities of other investment
companies. These investment companies typically pay an investment advisory fee
out of their assets. Therefore, investments may be subject to duplicate
management, advisory and distribution fees. The Investment Adviser will consider
this fee in its investment analysis when determining whether to purchase shares
of these companies for an Equity Investment Fund. This fee is in addition to the
fees received by an Equity Investment Fund's Investment Adviser and
Administrator. In order to avoid the imposition of additional fees as a result
of
prospectus
10
<PAGE> 85
investments by an Equity Investment Fund in shares of other American Performance
Funds, the Investment Adviser and Administrator have agreed to promptly forward
to the Equity Investment Fund any portion of their usual asset-based service
fees from an American Performance Fund which is attributable to investment by
the Equity Investment Fund in shares of such other American Performance Fund.
OPTIONS AND FUTURES CONTRACTS
Each Equity Investment Fund may acquire put or call options and futures
contracts and may write covered call options. See the Statement of Additional
Information for more information on these investment activities.
Futures transactions involve brokerage costs and require an Equity Investment
Fund to segregate assets to cover contracts that would require it to purchase
securities. An Equity Investment Fund may lose the expected benefit of futures
transactions if interest rates or securities prices move in an unanticipated
manner. Such unanticipated changes may also result in poorer overall performance
than if the Equity Investment Fund had not entered into any futures
transactions. In addition, the value of an Equity Investment Fund's futures
positions may not prove to be perfectly or even highly correlated with the value
of its portfolio securities, limiting the Equity Investment Fund's ability to
hedge effectively against interest rate and/or market risk and giving rise to
additional risks. There is no assurance of liquidity in the secondary market for
purposes of closing out futures positions.
FOREIGN SECURITIES
Each Equity Investment Fund may invest in foreign securities through the
purchase of sponsored and unsponsored American Depository Receipts and may also
invest in securities issued by foreign branches of U.S. banks and foreign banks,
in Canadian commercial paper, and in Europaper (U.S. dollar-denominated
commercial paper of a foreign issuer). Investment in foreign securities is
subject to special risks, such as future adverse political and economic
developments, possible seizure, nationalization, or expropriation of foreign
investments, less stringent disclosure requirements, the possible establishment
of exchange controls or taxation at the source, or the adoption of other foreign
governmental restrictions.
SECURITIES LENDING
In order to generate additional income, an Equity Investment Fund may, from time
to time, lend its portfolio securities to broker-dealers, banks, or
institutional borrowers of securities. The Funds will enter into loan agreements
only with broker-dealers, banks, or other institutions that BOK has determined
are creditworthy under guidelines established by the Funds' Board of Trustees.
See the Statement of Additional Information for more information on these
investment activities.
REPURCHASE AGREEMENTS
Securities held by an Equity Investment Fund may be subject to repurchase
agreements. Under the terms of a repurchase agreement, an Equity Investment Fund
would acquire securities from financial institutions such as member banks of the
Federal Deposit Insurance Corporation or registered broker-dealers which the
Investment Adviser deems creditworthy under guidelines approved by the Funds'
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11
<PAGE> 86
Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed upon date and price. The repurchase price would
generally equal the price paid by the Equity Investment Fund plus interest
negotiated on the basis of current short-term rates, which may be more or less
than the rate on the underlying portfolio securities. The seller under a
repurchase agreement will be required to maintain the value of collateral held
pursuant to the agreement at not less than the repurchase price (including
accrued interest) and the Investment Adviser will monitor the collateral's value
to ensure that it equals or exceeds the repurchase price. Repurchase agreements
are considered to be loans by an investment company under the Investment Company
Act of 1940, as amended (the "1940 Act"). See the Statement of Additional
Information for more information regarding this investment practice.
REVERSE REPURCHASE AGREEMENTS
Each Equity Investment Fund may borrow funds for temporary purposes by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. Pursuant to such agreements, an Equity Investment
Fund would sell portfolio securities to financial institutions such as banks and
brokerdealers and agree to repurchase them at a mutually agreed upon date and
price. At the time an Equity Investment Fund enters into a reverse repurchase
agreement, it will place in a segregated custodial account assets, such as
liquid high quality securities, consistent with the Equity Investment Fund's
investment objective having a value not less than 100% of the repurchase price
(including accrued interest), and the Investment Adviser will subsequently
monitor the account to ensure that such required value is maintained. Reverse
repurchase agreements involve the risk that the market value of the securities
sold by an Equity Investment Fund may decline below the price at which such Fund
is obligated to repurchase the securities. Reverse repurchase agreements are
considered to be borrowings by an investment company under the 1940 Act.
WHEN-ISSUED SECURITIES
Each Equity Investment Fund may purchase securities on a when-issued basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield and thereby involve a risk that the
yield obtained in the transaction will be less than those available in the
market when delivery takes place. An Equity Investment Fund will generally not
pay for such securities or start earning interest on them until they are
received. When an Equity Investment Fund agrees to purchase such securities, its
Custodian will set aside cash or liquid high grade securities equal to the
amount of the commitment in a separate account with the Custodian or a
Sub-Custodian of the Equity Investment Fund. Securities purchased on a
when-issued basis are recorded as an asset and are subject to changes in value
based upon changes in the general level of interest rates. Each Equity
Investment Fund expects that commitments to purchase when-issued securities will
not exceed 25% of the value of its total assets absent unusual market
conditions. In the event that its commitments to purchase when-issued securities
ever exceeded 25% of the value of its assets, an Equity Investment Fund's
liquidity and the ability of the Investment Adviser to manage it might be
severely affected. No Equity Investment Fund intends to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
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<PAGE> 87
PRIVATE PLACEMENT INVESTMENTS
The Equity Investment Funds may invest in commercial paper issued in reliance on
the socalled "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933, and resold to qualified institutional buyers
under Securities Act Rule 144A ("Section 4(2) paper"). Section 4(2) paper is
restricted as to disposition under the federal securities laws, and generally is
sold to institutional investors such as the Funds who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction and may be
accomplished in accordance with Rule 144A. Section 4(2) paper normally is resold
to other institutional investors like the Funds through or with the assistance
of the issuer or investment dealers who make a market in the Section 4(2) paper,
thus providing liquidity. No Equity Investment Fund will invest more than 10% of
its net assets in Section 4(2) paper and illiquid securities unless the
Investment Adviser determines, by continuous reference to the appropriate
trading markets and pursuant to guidelines approved by the Board of Trustees,
that any Section 4(2) paper held by the Equity Investment Fund in excess of this
level is at all times liquid.
Because it is not possible to predict with assurance exactly how this market for
Section 4(2) paper sold and offered under Rule 144A will develop, the Board of
Trustees and the Investment Adviser, pursuant to the guidelines approved by the
Board of Trustees, will carefully monitor the Equity Investment Funds'
investments in these securities, focusing on such important factors, among
others, as valuation, liquidity, and availability of information. Investments in
Section 4(2) paper could have the effect of reducing the Equity Investment
Funds' liquidity to the extent that qualified institutional buyers become for a
time not interested in purchasing these restricted securities.
MORTGAGE RELATED SECURITIES
The Balanced Fund may purchase mortgage-related securities representing pools of
mortgage loans assembled for sale to investors by various governmental agencies
such as the Government National Mortgage Association and government-related
organizations such as the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation, as well as by private issuers such as commercial
banks, savings and loan institutions, mortgage bankers and private mortgage
insurance companies. Although certain mortgage-related securities are guaranteed
by a third party or otherwise similarly secured, the market value of the
security, which may fluctuate, is not so secured. If the Balanced Fund purchases
a mortgage-related security at a premium, that portion may be lost if there is a
decline in the market value of the security whether resulting from changes in
interest rates or prepayments in the underlying mortgage collateral. As with
other interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise, the converse is
not necessarily true since in periods of declining interest rates, the mortgages
underlying the securities are prone to prepayment. Prepayments occur when the
borrower under an individual mortgage prepays the remaining principal before the
mortgage's scheduled maturity date. As a result of the pass-through of
prepayments of principal on the underlying securities, mortgage-backed
pass-through securities are often subject to more rapid prepayments of principal
than their stated maturity would indicate. Because the prepayment
characteristics of the underlying mortgages vary, it is not possible to predict
accurately the realized yield or average life of a particular issue of
pass-through certificates. Prepayments are
prospectus
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<PAGE> 88
important because of their effect on the yield and price of the securities.
During periods of declining interest rates, such prepayments can be expected to
accelerate, and the Funds would be required to reinvest the proceeds at the
lower interest rates then available. In addition, prepayments of mortgages which
underlie securities purchased at a premium may not have been fully amortized at
the time the obligation is repaid. As a result of these principal prepayment
features, mortgage-backed pass-through securities are generally more volatile
investments than other U.S. government securities. For these and other reasons,
a mortgage-related security's stated maturity may be shortened by unscheduled
prepayments on the underlying mortgages and, therefore, it is not possible to
predict accurately the security's return to the Balanced Fund. In addition,
regular payments received in respect of mortgage-related securities include both
interest and principal. No assurance can be given as to the return the Balanced
Fund will receive when these amounts are reinvested. The Balanced Fund also may
invest in collateralized mortgage obligations structured on pools of mortgage
pass-through certificates or mortgage loans. Collateralized mortgage obligations
will be purchased only if rated at the time of purchase in one of the three
highest rating categories by an NRSRO or, if not rated, found by the Investment
Adviser under guidelines established by the Funds' Board of Trustees to be of
comparable quality. For further discussion concerning the investment
considerations involved, see "INVESTMENT OBJECTIVE AND POLICIES--Additional
Information on Fund Instruments--Mortgage-Related Securities" in the Statement
of Additional Information.
INVESTMENT RESTRICTIONS
Each Equity Investment Fund is subject to a number of investment restrictions
that may be changed only by a vote of a majority of the outstanding Shares of
the Equity Investment Fund (as defined in "GENERAL INFORMATION--Miscellaneous").
Pursuant to these investment restrictions:
1. Each of the Equity Investment Funds will not purchase a security if, as a
result, with respect to 75% of its portfolio (i) more than 5% of the value of
its total assets would be invested in any one issuer, or (ii) it would hold
more than 10% of any class of securities of such issuer or more than 10% of
the outstanding voting securities of the issuer. There is no limit on the
percentage of assets that may be invested in U.S. Treasury bills, notes, or
other obligations issued or guaranteed by the U.S. government or its agencies
and instrumentalities. For purposes of this and the immediately following
limitation, a security is considered to be issued by the government entity
(or entities) whose assets and revenues back the security, or, with respect
to a private activity bond that is backed only by the assets and revenues of
a non-governmental user, such non-governmental user.
2. Each of the Equity Investment Funds will not purchase a security if, as a
result, more than 25% of the value of its total assets would be invested in
securities of one or more issuers conducting their principal business
activities in the same industry, provided that (a) this limitation shall not
apply to obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities; (b) wholly owned finance companies will be
considered to be in the industries of their parents if their activities are
primarily related to financing the activities of their parents; and (c)
utilities will be divided according to their services. For example, gas, gas
transmission, electric and gas, electric, and telephone will each be
considered a separate industry.
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3. The Equity Investment Funds may not borrow money or issue senior securities,
except that each Equity Investment Fund may borrow from banks or enter into
reverse repurchase agreements for temporary purposes in amounts up to 10% of
the value of its total assets at the time of such borrowing; or mortgage,
pledge, or hypothecate any assets, except in connection with any such
borrowing and in amounts not in excess of the lesser of the dollar amounts
borrowed or 10% of the value of each Equity Investment Fund's total assets at
the time of its borrowing. No Equity Investment Fund will purchase securities
while its borrowings (including reverse repurchase agreements) exceed 5% of
its total assets.
4. No Equity Investment Fund may make loans, except that each Equity Investment
Fund may, in accordance with its investment objectives and policies, purchase
or hold debt instruments, lend portfolio securities, and enter into
repurchase agreements.
5. No Equity Investment Fund will enter into a repurchase agreement with a
maturity in excess of seven days if such investment, together with other
instruments in the Fund which are not readily marketable, exceeds 10% of such
Fund's net assets.
Additionally, although not a matter controlled by their fundamental investment
policies or restrictions (and therefore subject to change without shareholder
approval), the Equity Fund, the Aggressive Growth Fund and the Balanced Fund
will not, so long as its shares are registered under the securities laws of the
State of Texas and such restrictions are required as a consequence of such
registration, (1) invest more than 5% of its net assets in warrants valued at
the lower of cost or market; provided that, of this 5%, no more than 2% will be
in warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange, or (2) invest in illiquid investments, including securities
which are subject to legal or contractual restrictions on resale, or for which
there is no readily available market if more than 15% of a Fund's average net
assets would be invested in such securities. For purposes of restriction (1) in
the preceding sentence, warrants acquired by a Fund in units or attached to
other securities may be deemed to be without value.
VALUATION OF SHARES
The net asset value of the Funds are determined and their Shares are priced as
of the close of regular trading of the New York Stock Exchange ("NYSE")
(generally 4:00 p.m. Eastern time) on each Business Day ("Valuation Time"). As
used herein, a "Business Day" constitutes any day on which the NYSE is open for
trading, and the Federal Reserve Bank of Kansas City is open, except days on
which there are not sufficient changes in the value of a Fund's portfolio
securities that the Fund's net asset value might be materially affected, or days
during which no Shares are tendered for redemption and no orders to purchase
Shares are received. Currently, the NYSE or the Federal Reserve Bank of Kansas
City is closed on the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veteran's Day, Thanksgiving Day and Christmas Day. Net asset
value per Share for purposes of pricing sales and redemptions is calculated by
dividing the value of all securities and other assets belonging to each Equity
Investment Fund, less the liabilities charged to each Equity Investment Fund, by
the number of its outstanding Shares.
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The securities in each Equity Investment Fund will be valued at market value. If
market quotations are not readily available, the securities will be valued by a
method which the Funds' Board of Trustees believes accurately reflects fair
value. Debt securities with remaining maturities of 60 days or less will be
valued in accordance with the amortized cost method where the Funds' Trustees
determine that amortized cost is fair value. For further information about
valuation of investments, see the Statement of Additional Information.
HOW TO PURCHASE SHARES
Shares of the Equity Investment Funds are sold on a continuous basis and may be
purchased directly from the Funds' Distributor, BISYS, either by mail, by
telephone, or by electronic transfer. Shares may also be purchased through a
bank or broker-dealer who has established a dealer agreement with the
Distributor. Except as described in "Auto Invest Plan" below, the minimum
initial purchase is $1,000, and the minimum for subsequent purchases is only
$100. These minimums may be waived if purchases are made in connection with
Individual Retirement Accounts ("IRAs"), Keoghs, qualified pension plans,
similar plans, or other employer plans. For information on IRAs, Keoghs or
similar plans, contact BOK at (918) 588-6586.
BY MAIL
Investors may purchase Shares of any Equity Investment Fund by completing and
signing an Account Registration form and mailing it, along with a check (or
other negotiable bank instrument or money order) for at least $1,000, payable to
the appropriate Fund, in care of the Funds' Custodian at Bank of Oklahoma, N.A.,
Attention: American Performance Funds, Department 12, Tulsa, Oklahoma 74182.
Subsequent purchases of Shares may be made at any time by mailing a check (or
other negotiable bank draft or money order) for at least $100, payable to the
appropriate Fund, to the above address.
Account Registration forms can be obtained by calling the Funds at (800)
762-7085.
BY TELEPHONE OR ELECTRONIC TRANSFER
If an investor's Account Registration form has been previously received by the
Distributor, investors may also purchase Shares of the Equity Investment Funds
by telephone or by electronic transfer to the Funds' Custodian. To place an
order by telephone, call the Funds toll-free at (800) 762-7085. Payment for
Shares ordered by telephone may be made by check and must be received by the
Funds' Custodian within the settlement requirements defined under the Securities
Exchange Act of 1934. Shares of the Equity Investment Funds ordered by telephone
will be purchased for the Shareholder's account when the order has been
received. Any questions regarding current settlement requirements or electronic
payment instructions should be directed to the Funds at (800) 762-7085.
If payment for the Shares is not received within the prescribed time periods, or
if a check timely received does not clear, the purchase will be canceled and the
investor could be liable for any losses or fees incurred.
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<PAGE> 91
AUTO INVEST PLAN
The Funds offer an Auto Invest Plan which enables Shareholders of the Equity
Investment Funds to make regular monthly or quarterly purchases of Shares
through automatic deductions from their bank accounts. With Shareholder
authorization, the Transfer Agent deducts the amount specified from the
Shareholder's bank account which is then automatically invested in Shares at net
asset value. The required minimum initial investment when opening an account
using the Auto Invest Plan is $100; the minimum amount for subsequent
investments in an Equity Investment Fund is $50. To participate in the Auto
Invest Plan, Shareholders should complete the appropriate section of the Account
Registration form which can be acquired by calling (800) 762-7085. To change the
Auto Invest instructions, a Shareholder must submit a written request to the
Funds. A Shareholder may discontinue the feature by submitting a written request
to or by calling the Funds.
FUND DIRECT INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS")
A Fund Direct IRA enables individuals, even if they participate in an
employer-sponsored retirement plan, to establish their own retirement program.
IRA contributions may be tax-deductible and earnings are tax-deferred. Under the
Tax Reform Act of 1986, the tax deductibility of IRA contributions is restricted
or eliminated for individuals who participate in certain employer pension plans
and whose annual income exceeds certain limits. Existing IRAs and future
contributions up to the IRA maximums, whether deductible or not, still earn
income on a tax-deferred basis.
All IRA distribution requests must be made in writing to the Funds. Any
additional deposits to an IRA must distinguish the type and year of the
contribution. For more information on an IRA call the Funds at (800) 762-7085.
Shareholders are advised to consult a tax adviser on IRA contribution and
withdrawal requirements and restrictions.
OTHER INFORMATION REGARDING PURCHASES
Shares may also be purchased through procedures established by the Distributor
in connection with the requirements of qualified accounts maintained by or on
behalf of certain persons ("Customers") by Participating Organizations under the
Funds' Distribution Plan (See "DISTRIBUTION"). Shares of any Equity Investment
Fund sold to a Participating Organization on behalf of Customers will normally
be held of record by the Participating Organization and it is the responsibility
of the Participating Organization to transmit purchase or redemption orders to
the Distributor and to deliver funds for the purchase thereof on a timely basis.
Depending upon the terms of a particular Customer account, a Participating
Organization may charge a Customer account fees for services provided in
connection with investment in an Equity Investment Fund. Information concerning
these services and any charges can be obtained from the Participating
Organization or one of its affiliates. This Prospectus should be read in
conjunction with any such information so received.
Shares of each Equity Investment Fund are purchased at the net asset value per
share (see "VALUATION OF SHARES") next determined after receipt by the
Distributor of an order to purchase Shares in good form, plus any applicable
sales charge as described below. Purchases of Shares in an Equity Investment
Fund will be effected only on a Business Day (as defined in "VALUATION OF
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<PAGE> 92
SHARES") of that Equity Investment Fund. An order received prior to the
Valuation Time on any Business Day will be executed at the net asset value
determined as of the Valuation Time on the day of receipt. An order received
after the Valuation Time on any Business Day will be executed at the net asset
value determined as of the Valuation Time on the next Business Day.
In the case of orders for the purchase of Shares placed through a broker-dealer,
the applicable public offering price will be the net asset value as so
determined, but only if the broker-dealer receives the order prior to the
Valuation Time for that day and transmits it to the Distributor prior to the
Valuation Time for that day. The brokerdealer is responsible for transmitting
such orders promptly. If the broker-dealer fails to do so, the investor's right
to that day's closing price must be settled between the investor and the
broker-dealer. If the broker-dealer receives the order after the Valuation Time
for that day, the price will be based on the net asset value determined as of
the Valuation Time for the next day.
Each Equity Investment Fund reserves the right to reject any order for the
purchase of its Shares in whole or in part, including purchases made with
foreign and third party checks.
Every Shareholder will receive a confirmation of each new transaction in the
Shareholder's account, which will show the total number of Shares of such Fund
owned by the Shareholder and the number of Shares being held in safekeeping by
the Transfer Agent for the account of the Shareholder. Confirmation of purchases
and redemptions of Shares of the Equity Investment Funds by a Participating
Organization on behalf of a Customer will be sent by the Participating
Organization. Shareholders may rely on these statements in lieu of certificates.
No certificates representing Shares of any Equity Investment Fund will be
issued.
SALES CHARGES
The public offering price of a Share of each of the Equity Investment Funds
equals its net asset value plus a sales charge. BISYS receives this sales charge
as Distributor and reallows a portion of it as dealer discounts and brokerage
commissions. However, the Distributor, at its sole discretion, may pay certain
dealers all or part of the portion of the sales charge it receives. A broker or
dealer who receives a reallowance in excess of 90% of the sales charge may be
deemed to be an "underwriter" for purposes of the Securities Act of 1933.
The following table sets forth information pertaining to the Sales Charges for
each of the Equity Investment Funds.
<TABLE>
<CAPTION>
DEALER DISCOUNTS
SALES AND BROKERAGE
CHARGE AS A SALES CHARGE COMMISSIONS AS
PERCENTAGE OF AS A PERCENTAGE A PERCENTAGE OF
NET AMOUNT OF NET PUBLIC OFFERING
AMOUNT OF PURCHASE INVESTED OFFERING PRICE PRICE
- ---------------------------------------------------- ------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000................................... 5.26% 5.00% 4.50%
$50,000 but less than $100,000...................... 3.90% 3.75% 3.25%
$100,000 but less than $250,000..................... 2.83% 2.75% 2.50%
$250,000 but less than $500,000..................... 2.04% 2.00% 1.75%
$500,000 but less than $1,000,000................... 1.78% 1.75% 1.60%
$1,000,000 or more.................................. 0.00% 0.00% 0.00%
</TABLE>
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<PAGE> 93
From time to time dealers who receive dealer discounts and brokerage commissions
from the Distributor may reallow all or a portion of such dealer discounts and
brokerage commissions to other dealers or brokers.
The Distributor, at its expense, will also provide additional compensation to
dealers in connection with sales of Shares of any of the Funds. Such
compensation will include financial assistance to dealers in connection with
conferences, sales or training programs for their employees, seminars for the
public, advertising campaigns regarding one or more Funds of the Funds, and/or
other dealer-sponsored special events. In some instances, this compensation will
be made available only to certain dealers whose representatives have sold a
significant amount of such Shares. Compensation will include payment for travel
expenses, including lodging, incurred in connection with trips taken by invited
registered representatives and members of their families to locations within or
outside of the United States for meetings or seminars of a business nature.
Compensation will also include the following types of non-cash compensation
offered through sales contests: (1) vacation trips, including the provision of
travel arrangements and lodging at luxury resorts at exotic locations, (2)
tickets for entertainment events (such as concerts, cruises and sporting events)
and (3) merchandise (such as clothing, trophies, clocks and pens). Dealers may
not use sales of a Fund's Shares to qualify for this compensation to the extent
such may be prohibited by the laws of any state or any self-regulatory agency,
such as the National Association of Securities Dealers, Inc. None of the
aforementioned compensation is paid for by any Fund or its Shareholders.
SALES CHARGE WAIVERS
The Distributor may periodically waive the sales charges for all customers with
respect to any of the Equity Investment Funds. In addition, the Distributor may
waive the sales charge for the purchase of a Fund's shares with the proceeds
from the recent redemption of shares of another non-money market mutual fund
that imposes a sales charge.
The sales charges may also be waived for (1) investors who purchase through
accounts with the Investment Adviser and through their existing trust
relationship with the Investment Adviser; (2) employees of the Investment
Adviser or its affiliates; (3) each Trustee of the Funds and any employee of a
company that constitutes the principal business activity of a Trustee; (4)
employees of the Distributor and its affiliates; (5) orders placed on behalf of
other investment companies distributed by The BISYS Group, Inc. or its
affiliated companies; (6) existing Shareholders who own Shares in any of the
Equity Investment Funds within their trust accounts and purchase additional
Shares outside of these trust relationships; and (7) investors within wrap
accounts.
Each investor described in paragraphs (2), (3), (4), and (6) above must identify
himself or herself at the time of purchase. When an investor who has previously
redeemed Shares of any American Performance Fund re-enters the American
Performance Funds, the sales charge on the newly purchased shares will be waived
on a one-time basis in an amount up to the total of any sales charge paid on the
Shares previously redeemed. If the Shareholder exercising this re-entry
privilege paid a sales charge on the redeemed shares and held them for less than
91 days, such Shareholder must reduce his or her cost basis of the redeemed
shares for purposes of determining any capital gain or loss on the redemption by
the lesser of (1) the sales charge paid for those shares, or (2) the sales
charge waived
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<PAGE> 94
in connection with the purchase of the new shares. The Funds reserve the right
to alter the terms of their sales charge waiver practices upon sixty days'
notice to Shareholders.
CONCURRENT PURCHASES AND RIGHT OF ACCUMULATION
For purposes of qualifying for a reduced sales charge, investors have the
privilege of combining concurrent purchases of, and holdings in, shares of any
Funds of the Funds sold with a sales charge ("Eligible Shares"). Investors are
permitted to purchase Eligible Shares at the public offering price applicable to
the total of (a) the dollar amount of the Eligible Shares then being purchased
plus (b) an amount equal to the then-current net asset value of the purchaser's
combined holdings of Eligible Shares.
To receive the applicable public offering price pursuant to concurrent purchases
and the right of accumulation, Shareholders must, at the time of purchase, give
the Distributor sufficient information to permit confirmation of qualification.
Investors may combine purchases of Eligible Shares that are made in their
individual capacity with (1) purchases that are made by members of their
immediate household and (2) purchases made by businesses that they own as sole
proprietorships, for purposes of obtaining reduced sales charges pursuant to
concurrent purchases and the right of accumulation. In order to accomplish this,
however, investors must designate on the Account Registration form the accounts
that are to be combined for this purpose. Investors can only designate accounts
that are open at the time of the concurrent purchases and when the right of
accumulation is exercised.
LETTER OF INTENT
You may obtain a reduced sales charge by means of a written Letter of Intent
which expresses your intention to invest, within a period of 13 months, a
certain amount in Shares of any of the American Performance Funds which charge a
sales load. Each purchase of Shares under a Letter of Intent will be made at the
public offering price plus the sales charge applicable at the time of such
purchase to a single transaction of the total dollar amount indicated in the
Letter of Intent. A Letter of Intent may include purchases of Shares made not
more than 90 days prior to the date the investor signs a Letter of Intent;
however, the 13-month period during which the Letter of Intent is in effect will
begin on the date of the earliest purchase to be included.
A Letter of Intent is not a binding obligation upon the investor to purchase the
full amount indicated. The minimum initial investment under a Letter of Intent
is 5% of such amount. Shares purchased with the first 5% of such amount will be
held in escrow (while remaining registered in the name of the investor) to
secure payment of the higher sales charge applicable to the Shares actually
purchased if the full amount indicated is not purchased. Such escrowed Shares
will be involuntarily redeemed to pay the additional sales charge, if necessary.
Dividends on escrowed Shares, whether paid in cash or reinvested in additional
Shares are not subject to escrow. The escrowed Shares will not be available for
disposal by the investor until all purchases pursuant to the Letter of Intent
have been made or the higher sales charge has been paid. When the full amount
indicated has been purchased, the escrow will be released.
Additionally, if the total purchases within the 13-month period exceed the
amount specified, an adjustment will be made to reflect further reduced sales
charges applicable to such purchases.
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Adjustments for these purchases and purchases made during the 90-day period
prior to submission of the Letter of Intent will be made at the conclusion of
the 13-month period and in the form of additional shares credited to the
shareholder's account at the then current Public Offering Price applicable to a
single purchase of the total amount of the total purchase.
For further information, interested investors should contact the Distributor.
Letter of Intent privileges may be amended or terminated without notice at any
time by the Distributor.
EXCHANGE PRIVILEGE
Shares of any Equity Investment Fund may be exchanged without payment of a sales
charge for Shares of any American Performance Fund having a sales charge equal
to or less than that of the Equity Investment Fund Shares sought to be
exchanged. If the Shareholder exercising the exchange privilege paid a sales
charge on the exchanged Shares that is less than the sales charge applicable to
the Shares sought to be acquired through the exchange, such Shareholder must pay
a sales charge on the exchange equal to the difference between the sales charge
paid for the exchanged Shares and the sales charge applicable to the Shares
sought to be acquired through the exchange. The exchange will be made on the
basis of the relative net asset values of the Shares exchanged. An exchange is
considered a sale of Shares and may result in a capital gain or loss for federal
income tax purposes. If the Shareholder exercising the exchange privilege paid a
sales charge on the exchanged Shares and held them for less than 91 days, for
purposes of determining the amount of the capital gain or loss, such Shareholder
must reduce his or her cost basis of the exchanged Shares by the lesser of (1)
the sales charge paid for those Shares, or (2) the sales charge waived on the
exchange. The sales charge is treated as incurred in connection with the
acquisition of the newly exchanged-for Shares. The exchange privilege may only
be exercised in states where the exchange may legally be made. The Funds reserve
the right to eliminate or to alter the terms of this exchange offer upon sixty
days' notice to Shareholders.
A Shareholder wishing to exchange his or her Shares may do so by contacting the
Funds at (800) 762-7085 or by providing written instructions to the Distributor.
Any Shareholder who wishes to make an exchange must have received a current
Prospectus of the Fund in which he or she wishes to invest before the exchange
will be effected.
HOW TO REDEEM SHARES
Shares may ordinarily be redeemed by mail or by telephone. Shareholders may
redeem their Shares without charge on any day that the net asset value is
calculated (see "VALUATION OF SHARES"). However, all or part of a Customer's
Shares may be redeemed in accordance with instructions and limitations
pertaining to his or her account held at a Participating Organization.
BY MAIL
Shares may be redeemed by mail by sending a written request to the Distributor
in care of the Funds' Custodian at Bank of Oklahoma, N.A., Attention: American
Performance Funds, Department 12, Tulsa, Oklahoma 74182. The Distributor may
require a signature guarantee by an eligible guarantor institution. For purposes
of this policy, the term "eligible guarantor institution" shall include banks,
brokers, dealers, credit unions, securities exchanges and associations, clearing
agencies and savings associa-
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<PAGE> 96
tions as those terms are defined in Rule 17Ad-15 under the Securities Exchange
Act of 1934. The Distributor reserves the right to reject any signature
guarantee if (i) it has reason to believe that the signature is not genuine,
(ii) it has reason to believe that the transaction would otherwise be improper,
or (iii) the guarantor institution is a broker or dealer that is neither a
member of a clearing corporation nor maintains net capital of at least $100,000.
The signature guarantee requirements will be waived if all of the following
conditions apply: (1) the redemption check is payable to the Shareholder(s) of
record, and (2) the redemption check is mailed to the Shareholder(s) at the
address of record. The Shareholder may also have the proceeds mailed or sent
electronically to a commercial bank account previously designated on the Account
Registration form or by written instruction to the Distributor. There is no
charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE
Shares may be redeemed by telephone if the Account Registration form reflects
that the Shareholder has that capability. The Shareholder may have the proceeds
mailed to his or her address or mailed or sent electronically to a commercial
bank account previously designated on the Account Registration form. Under most
circumstances, payments will be transmitted on the next Business Day following
receipt of a valid request for redemption. Electronic payment requests may be
made by the Shareholder by calling the Funds at (800) 762-7085. The Transfer
Agent may reduce the amount of a wire redemption payment by the Custodian's
then-current wire redemption charge (presently $15.00). Neither the Distributor,
the Transfer Agent, the Investment Adviser, nor the Funds will be liable for any
losses, damages, expenses or costs arising out of any telephone transaction
(including exchanges and redemptions) effected in accordance with the Funds'
telephone transaction procedures, upon instructions reasonably believed to be
genuine. The Funds will employ procedures designed to provide reasonable
assurance that the instructions communicated by telephone are genuine; if these
procedures are not followed, the Funds may be liable for any losses due to
unauthorized or fraudulent instructions. These procedures include recording all
phone conversations, sending confirmations to Shareholders within 72 hours of
the telephone transaction, verifying the account name and a Shareholder's
account number or tax identification number and sending redemption proceeds only
to the address of record or to a previously authorized account. If, due to
temporary adverse conditions, investors are unable to effect telephone
transactions, Shareholders may also mail the redemption request to the
Distributor at the address listed above under "HOW TO REDEEM SHARES--By Mail."
The telephone redemption option will be suspended for a period of 10 days
following a telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan enables Shareholders of the Funds to make regular
monthly or quarterly redemptions of Shares if their account has at least
$10,000. With Shareholder authorization, the Transfer Agent will automatically
redeem Shares at the net asset value on the dates of the withdrawal and have a
check in the amount specified mailed to the Shareholder. The required minimum
withdrawal is $100. To participate in the Systematic Withdrawal Plan,
Shareholders should call (800) 762-7085 for more information. Purchases of
additional Shares concurrent with withdrawals may be disadvantageous to certain
Shareholders because of tax liabilities. To change the Systematic Withdrawal
instructions, a Shareholder must submit a written request to the Distributor. A
Shareholder may discontinue the feature by submitting a written request to or by
calling the Funds.
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<PAGE> 97
OTHER INFORMATION REGARDING REDEMPTIONS
All redemption orders are effected at the net asset value per Share next
determined after receipt of a valid request for redemption, as described above.
Payment to Shareholders for Shares redeemed will be made within the settlement
requirements defined in the Securities Exchange Act of 1934, after receipt by
the Distributor of the request for redemption. However, to the greatest extent
possible, the Trust will attempt to honor requests from Shareholders for next
Business Day payments upon redemption of Shares if the request for redemption is
received by the Transfer Agent before the last Valuation Time on a Business Day
or, if the request for redemption is received after the last Valuation Time, to
honor requests for payment within two Business Days, unless it would be
disadvantageous to the Trust or the Shareholders of the particular Fund to sell
or liquidate portfolio securities in an amount sufficient to satisfy requests
for payments in that manner.
At various times, an Equity Investment Fund may be requested to redeem Shares
for which it has not yet received good payment. In such circumstances, the
forwarding of proceeds may be delayed for up to 15 days until payment has been
collected for the purchase of such Shares. The Equity Investment Funds intend to
pay cash for all Shares redeemed, but under abnormal conditions which make
payment in cash unwise, payment may be made wholly or partly in readily
marketable portfolio securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs in converting such
securities to cash.
Due to the relatively high cost of handling small investments, each Equity
Investment Fund reserves the right to redeem, at net asset value, the Shares of
any Shareholder if, because of redemptions of Shares by or on behalf of the
Shareholder, the account of such Shareholder in any Equity Investment Fund has a
value of less than $500. Accordingly, an investor purchasing Shares of any
Equity Investment Fund in only the minimum investment amount may be subject to
such involuntary redemption if he or she thereafter redeems some of his or her
Shares. Before any Equity Investment Fund exercises its right to redeem such
Shares and to send the proceeds to the Shareholder, the Shareholder will be
given notice that the value of the Shares in his or her account is less than the
minimum amount and will be allowed 60 days to make an additional investment in
such Fund in an amount which will increase the value of the account to at least
$500.
See the Funds' Statement of Additional Information--"ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION"--for examples of when the right of redemption may be
suspended.
DIVIDENDS
Net investment income of the Equity Fund, the Aggressive Growth Fund, the
Balanced Fund and the Growth Equity Fund is declared and paid quarterly as a
dividend to persons who are Shareholders at the close of business on the day of
declaration. Net capital gain income is distributed at least once a year. A
Shareholder will automatically receive all income dividends and capital gains
distributions in additional full and fractional Shares at net asset value as of
the ex-dividend date, unless the Shareholder elects to receive dividends or
distributions in cash. Reinvested dividends receive the same tax treatment as
dividends paid in cash. Such election, or any revocation thereof, must be made
in writing to the Distributor at: BISYS Fund Services, 3435 Stelzer Road,
Columbus, Ohio 43219 and will become
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<PAGE> 98
effective with respect to dividends and distributions having record dates after
its receipt by the Distributor.
Shareholders may elect to have all income, dividends, and capital gains
distributions paid by check or reinvested in the Fund. If you elect to receive
distributions paid by check and the check (1) is returned and marked as
"undeliverable" or (2) remains uncashed for six months, your payment election
will be changed automatically and your future dividend and capital gains
distribution will be reinvested in the Fund at the per share net asset value
determined as of the date of payment of the distribution. In addition, any
undeliverable check that remains uncashed for six months will be canceled and
reinvested in the Fund at the per share net asset value determined as of the
date of cancellation.
FEDERAL INCOME TAXES
Each Equity Investment Fund is treated as a separate entity for federal income
tax purposes. Each Fund intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"), and intends to
distribute all of its net investment income and capital gains so that it is not
required to pay federal income taxes on amounts so distributed to Shareholders.
Shareholders will be advised at least annually as to the federal income tax
consequences of distributions made during the year.
Receipt by a Shareholder of a distribution of ordinary income and/or an excess
of net short-term capital gain over net long-term loss is treated as a receipt
of ordinary income, whether such distribution is paid in cash or additional
shares. The "70 percent dividends received deduction" for corporations generally
will apply to these distributions to corporate shareholders that meet the
holding period requirement in the Code to the extent the distribution represents
amounts that would qualify for the dividends-received deduction if the Equity
Investment Fund making the distribution were a regular corporation, and to the
extent designated by such Equity Investment Fund as so qualifying.
Distributions designated by each Equity Investment Fund as deriving from net
gains on securities held for more than one year but not more than 18 months or
from net gains on securities held for more than 18 months are generally taxable
to Shareholders as such in the year in which they are received, regardless of
how long the Shareholder has held Shares in the Equity Investment Fund. Such
distributions are not eligible for the dividends-received deduction.
A Shareholder will generally recognize capital gain or loss on the sale or
exchange of Shares in an Equity Investment Fund. If a Shareholder disposes of
Shares in the Equity Investment Fund at a loss before holding such Shares for
longer than six months, such loss will be treated as a long-term capital loss to
the extent the Shareholder has received a capital gain dividend on the Shares.
Fund investments in foreign securities may be subject to withholding taxes at
the source on dividend or interest payments. In that case, the Fund's yield on
those securities would be decreased.
Prior to purchasing Shares, the impact of dividends or capital gains
distributions which are expected to be declared or have been declared, but have
not been paid, should be carefully considered. Dividends or capital gains
distributions paid after a purchase of Shares are subject to federal income
taxes, although
prospectus
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<PAGE> 99
in some circumstances the dividends or distributions may be, as an economic
matter, a return of capital.
Additional information regarding federal income taxes is contained in the
Statement of Additional Information under "INVESTMENT OBJECTIVE AND
POLICIES--Additional Tax Information Concerning All the Funds." However, the
foregoing and the material in the Statement of Additional Information are only
brief summaries of some of the important tax considerations generally affecting
the Equity Investment Funds and their Shareholders. In addition, the foregoing
discussion and the federal tax information in the Statement of Additional
Information are based on tax laws and regulations which are in effect as of the
date of this Prospectus; these laws and regulations may subsequently change.
Prospective investors in an Equity Investment Fund are advised to consult their
tax adviser with special reference to their own tax situations, including the
potential application of state and local taxes.
DISTRIBUTION
Shares of the Equity Investment Funds are sold on a continuous basis by the
Distributor for the Funds, BISYS Fund Services (the "Distributor"). Under the
Funds' Distribution and Shareholder Services Plan (the "Distribution Plan"), the
Equity Investment Funds will pay a monthly distribution fee (also referred to as
a 12b-1 Fee) to the Distributor as compensation for its services in connection
with the Distribution Plan at an annual rate equal to the lesser of (1) such fee
as may from time to time be agreed upon in writing by the Funds and the
Distributor, or (2) twenty-five one-hundredths of one percent (0.25%) of the
average daily net assets of each of the Equity Investment Funds. The Distributor
may use the distribution fee to provide distribution assistance with respect to
the Equity Investment Funds' Shares or to provide Shareholder services to the
holders of the Equity Investment Funds' Shares ("Customers") purchased through
financial institutions and intermediaries, broker-dealers, or similar entities,
including affiliates or subsidiaries of the Distributor ("Participating
Organizations") pursuant to contractual arrangements with the Distributor under
the Distribution Plan.
The distribution fee will be payable without regard to whether the amount of the
fee is more or less than the actual expenses incurred in a particular year by
the Distributor in connection with distribution assistance or Shareholder
services rendered by the Distributor itself or incurred by the Distributor
pursuant to contractual agreement entered into under the Distribution Plan.
The Glass-Steagall Act and other applicable laws generally prohibit banks from
engaging in the business of underwriting securities, but in general do not
prohibit banks from purchasing securities as agent for and upon the order of
customers. Accordingly, banks acting as Participating Organizations may provide
only those services which, in the banks' opinion, are consistent with the then
current legal requirements. It is possible, however, that future legislative,
judicial or administrative action affecting the securities activities of banks
will cause the Funds to alter or discontinue their arrangements with banks that
act as Participating Organizations, or change their method of operations. It is
not anticipated, however, that any change in the Funds' method of operations
would affect their net asset value per share or result in financial loss to any
customer. See the Statement of Additional Information for further information
regarding the Distribution Plan and "MANAGEMENT OF THE EQUITY INVESTMENT
FUNDS--Banking Laws" for information concerning the applicability of the
Glass-Steagall Act to the Investment Adviser's investment advisory services to
the Funds.
prospectus
25
<PAGE> 100
MANAGEMENT OF THE EQUITY INVESTMENT FUNDS
TRUSTEES OF THE FUNDS
Overall responsibility for management of the Equity Investment Funds rests with
the Board of Trustees of the Funds, who are elected by the Shareholders of the
Funds. The Funds will be managed by the Trustees in accordance with the laws of
the Commonwealth of Massachusetts governing business trusts. There are currently
four Trustees, of whom three are not "interested persons" of the Funds within
the meaning of that term under the 1940 Act. The Trustees, in turn, elect the
officers of the Funds to supervise actively the Funds' day-to-day operations.
The Trustees of the Funds, their addresses, and their principal occupations
during the past five years, are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE FUNDS DURING PAST FIVE YEARS
- ------------------------- ---------------------- ---------------------------------------------------------
<S> <C> <C>
Walter B. Grimm* Chairman and Trustee From June, 1992 to present, employee of BISYS Fund
3435 Stelzer Road Services; from 1987 to June 1992, President of Leigh
Columbus, Ohio 43219 Consulting/Investments (investment firm).
Michael J. Hall Trustee From December, 1995 to present, Vice President and Chief
7130 South Lewis Suite Financial Officer, Worldwide Sports & Recreation, Inc.;
850 from January, 1994 to present, Vice President and Chief
Tulsa, Oklahoma 74136 Financial Officer, Pexco Holdings, Inc.; from 1991 to
December, 1993, Senior Vice President, Finance
Administration, Chief Financial Officer, Treasurer and
Director of Operations, Europe/Africa/ Middle East
Region of T.D. Williamson, Inc. (a heavy equipment
manufacturer).
Perry A. Wimpey Trustee From January, 1992 to present, Local Financial and
4843 S. 69th East Avenue Regulatory Consultant; from June, 1985 to January,
Tulsa, Oklahoma 74145 1992, Senior Vice President and Chief Financial
Officer, ONEOK Inc. (an energy company).
I. Edgar Hendrix Trustee From June, 1983 to present, Vice President and Treasurer,
8 East 3rd Street Parker Drilling Co.
Tulsa, Oklahoma 74103
</TABLE>
- ------------
*Indicates an "interested person" of the Funds as defined in the 1940 Act.
The Trustees receive fees and are reimbursed for their expenses in connection
with each meeting of the Board of Trustees they attend. However, no officer or
employee of an Investment Adviser, Sub-Adviser, or the Administrator of the
Funds receives any compensation from the Funds for acting as a Trustee. The
officers of the Funds receive no compensation directly from the Funds for
performing the duties of their offices. BISYS receives fees from each Fund of
the Funds for acting as Administrator and may receive additional income under
the Distribution Plan of the Funds.
INVESTMENT ADVISER
Bank of Oklahoma, N.A. serves as investment adviser to the Equity Investment
Funds. BOK, the largest trust company in the State of Oklahoma, is a subsidiary
of BOK Financial Corporation ("BOK Financial"). BOK Financial is controlled by
its principal shareholder, George B. Kaiser. Through its subsidiaries, BOK
Financial provides a full array of trust, commercial banking and retail banking
prospectus
26
<PAGE> 101
services. Its non-bank subsidiaries engage in various bank-related services,
including mortgage banking and providing credit life, accident, and health
insurance on certain loans originated by its subsidiaries.
BOK maintains offices in Tulsa and Oklahoma City and offers a variety of
services for both corporate and individual customers. Individual financial trust
services include personal trust management, administration of estates, and
management of individual investments and custodial accounts. For corporate
clients, the array of services includes management, administration and
recordkeeping of pension plans, thrift plans, 401(k) plans and master trust
plans. BOK has experience in providing investment advisory services to the
Funds, and experience in managing collective investment funds with investment
portfolios and objectives comparable to those of the Funds. BOK also serves as
transfer agent and registrar for corporate securities, paying agent for
dividends and interest, and indenture trustee of bond issues. At December 31,
1997 BOK was responsible for approximately $8.1 billion in assets including
approximately $4.2 billion in assets under management and possessed average
equity capital of $322 million.
Subject to the general supervision of the Funds' Board of Trustees and in
accordance with the investment objective and restrictions of each Equity
Investment Fund, BOK manages the Equity Investment Funds, makes decisions with
respect to and places orders for all purchases and sales of their portfolio
securities, and maintains each Equity Investment Fund's records relating to such
purchases.
The persons primarily responsible for the day-to-day management of each Equity
Investment Fund, as well as their previous business experience, are as follows:
<TABLE>
<CAPTION>
PORTFOLIO MANAGER BUSINESS EXPERIENCE
------------------------------------------------------------------------------
<S> <C>
Joe P. Sing, Jr. Manager of the Aggressive Growth Fund since its
inception. Since 1984, Mr. Sing has been a portfolio
manager for BOK.
Grafton M. Potter Manager of the Equity Fund and Growth Equity Fund
since their inception. Since 1988, Mr. Potter has
served as Director of Equity Research for BOK.
Andy H. Hood Manager of the Balanced Fund since its inception.
Since 1993, Mr. Hood has been a portfolio manager for
BOK. From 1987 to 1993 Mr. Hood was a portfolio
manager for Sun Trust Bank in Florida.
</TABLE>
For the services provided and expenses assumed pursuant to its investment
advisory agreement with the Funds, BOK receives a fee from the Equity Fund, the
Aggressive Growth Fund and the Growth Equity Fund, computed daily and paid
monthly equaling the lesser of (1) such fee as may from time to time be agreed
upon by the Funds and BOK, or (2) sixtynine one-hundredths of one percent
(0.69%) of each Fund's average daily net assets. BOK receives a fee from the
Balanced Fund computed daily and paid monthly equaling the lesser of (1) such
fee as may from time to time be agreed upon by the Fund and BOK, or (2)
seventy-four one-hundredths of one percent (0.74%) of the Balanced Fund's
average daily net assets. BOK receives fee income from the Funds from several
other sources. (See "SALES CHARGES," "DISTRIBUTION," and "GENERAL
INFORMATION--Custodian and Transfer Agent.") BOK may periodically waive all or a
portion of its advisory fee with respect to any Equity Investment Fund to
increase the net income of such Equity Investment Fund available for
distribution as dividends. In order
prospectus
27
<PAGE> 102
to reduce operating expenses, BOK has currently established the investment
advisory fees pertaining to the Equity Fund, the Aggressive Growth Fund, the
Balanced Fund and the Growth Equity Fund at 0.50%, 0.50%, 0.17% and 0.50% of
each respective Fund's average daily net assets.
For investment advisory services for the fiscal year ended August 31, 1997, the
Equity Fund and the Aggressive Growth Fund each paid BOK, after voluntary fee
reductions, 0.50% of their average net assets. The Balanced Fund did not pay any
investment advisory fees, after voluntary fee reductions. The Growth Equity Fund
had not commenced operations as of August 31, 1997.
ADMINISTRATOR AND DISTRIBUTOR
BISYS is the Administrator for the Funds, and also acts as the Funds' principal
underwriter and Distributor (the "Administrator" or the "Distributor," as the
context indicates). BISYS is a subsidiary of The BISYS Group, Inc., 150 Clove
Road, Little Falls, New Jersey 07424, a publicly owned company engaged in
information processing, loan servicing and 401(k) administration and
recordkeeping services to and through banking and other financial organizations.
The Administrator generally assists in all aspects of each Fund's administration
and operation.
For expenses assumed and services provided as Administrator pursuant to its
management and administration agreement with the Funds, BISYS receives a fee
from each Equity Investment Fund, computed daily and paid periodically, at the
lesser of (1) such fee as may from time to time be agreed upon in writing by the
Funds and the Administrator, or (2) twenty one-hundredths of one percent (0.20%)
of each Equity Investment Fund's average daily net assets. The Administrator may
periodically waive all or a portion of its administrative fee with respect to an
Equity Investment Fund to increase the net income of the Equity Investment Fund
available for distribution as dividends.
For administration services for the Equity Fund, the Aggressive Growth Fund and
the Balanced Fund, for the fiscal year ended August 31, 1997, each Fund paid the
Administrator 0.20% of its average net assets. The Growth Equity Fund had not
commenced operations as of August 31, 1997.
SUB-ADMINISTRATOR
BOK serves as the Sub-Administrator to the Funds pursuant to an agreement
between the Administrator and BOK. Pursuant to this agreement, BOK has assumed
many of the Administrator's duties, for which BOK receives a fee, paid by the
Administrator, calculated at an annual rate of five one-hundredths of one
percent (0.05%) of each Fund's average net assets.
EXPENSES
The Investment Adviser and the Administrator each bear all expenses in
connection with the performance of their services as investment adviser and
general manager and administrator, respectively, other than the cost of
securities (including brokerage commissions) purchased for the Funds. Each
Equity Investment Fund bears the following expenses relating to its respective
operations: taxes, interest, brokerage fees and commissions, fees and travel
expenses of the Trustees of the Funds, Securities and Exchange Commission fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to current
Shareholders, outside auditing and legal expenses, advisory and administration
fees, fees and reasonable out-of-pocket
prospectus
28
<PAGE> 103
expenses of the custodian and transfer agent, expenses incurred for pricing
securities owned by the particular Fund, certain insurance premiums, costs of
maintenance of the Funds' existence, costs of Shareholders' and Trustees'
reports and meetings, and any extraordinary expenses incurred in each Fund's
operation.
BANKING LAWS
The Investment Adviser believes that it may perform the investment advisory
services for the Equity Investment Funds contemplated by its agreements with the
Funds and by this Prospectus without violating the Glass-Steagall Act. Future
changes in federal or state statutes and regulations relating to permissible
activities of banks or bank holding companies and their subsidiaries and
affiliates as well as further judicial or administrative decisions or
interpretations of present and future statutes and regulations could change the
manner in which the Investment Adviser could continue to perform such services
for the Funds. See the Statement of Additional Information under the heading
"MANAGEMENT OF THE FUNDS--Glass-Steagall Act" for further discussion of
applicable banking laws and regulations.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
GENERAL INFORMATION
DESCRIPTION OF THE FUNDS AND THEIR SHARES
The Equity Fund, the Aggressive Growth Fund, the Balanced Fund and the Growth
Equity Fund represent four separate series of units of beneficial interest
("Shares") of American Performance Funds, a Massachusetts business trust which
was organized in October of 1987 and began active operations in August of 1990.
The organizational expenses for the Growth Equity Fund were capitalized and will
be amortized during the Fund's first five years of operations. Such amortization
will reduce the amount available for distributions as dividends to Shareholders.
Each Share represents an equal proportionate interest in a Fund with other
Shares of the same series, and is entitled to such dividends and distributions
out of the income earned on the assets belonging to that Fund as are declared at
the discretion of the Trustees.
As of November 18, 1997, Bank of Oklahoma, N.A. (Bank of Oklahoma Tower, One
Williams Center, Tulsa, Oklahoma 74103) and its bank affiliates were the
Shareholders of record of 99.59% of the Equity Fund's Shares, 96.10% of the
Aggressive Growth Fund's Shares, 99.35% of the Balanced Fund's Shares and 99.69%
of the Growth Equity Fund's Shares. As of November 25, 1997, Bank of Oklahoma,
N.A. and its bank affiliates possessed, on behalf of its underlying accounts
voting and investment power with respect to 81.41% of the Equity Fund's Shares,
74.52% of the Aggressive Growth Fund's Shares, 62.23% of the Balanced Fund's
Shares and 99.83% of the Growth Equity Fund's Shares, and, as a consequence,
Bank of Oklahoma, N.A. and its bank affiliates may be deemed to be a controlling
person of each of these Equity Investment Funds under the 1940 Act.
prospectus
29
<PAGE> 104
Shareholders are entitled to one vote for each Share, and a proportionate
fractional vote for any fraction of a Share, and will vote in the aggregate and
not by series except as otherwise expressly required by law.
Although the Funds are not required to hold annual meetings of Shareholders,
Shareholders have the right (1) to call a meeting to elect or remove one or more
of the Trustees of the Funds and (2) to be assisted by the Trustees in
communicating with other Shareholders of the Funds. Shareholder inquiries should
be directed to the Secretary of the Funds, at 3435 Stelzer Road, Columbus, Ohio
43219.
Overall responsibility for the management of the Funds is vested in the Board of
Trustees. See "MANAGEMENT OF THE EQUITY INVESTMENT FUNDS--Trustees of the
Funds." Individual Trustees are elected by the Shareholders and may be removed
by the Board of Trustees or Shareholders in accordance with the provisions of
the Declaration of Trust and By-laws of the Funds and Massachusetts law. See
"ADDITIONAL INFORMATION--Miscellaneous" in the Statement of Additional
Information for further information.
CUSTODIAN AND TRANSFER AGENT
Bank of Oklahoma, N.A. serves as custodian for the Funds ("Custodian"). BISYS
Fund Services Ohio, Inc., an affiliate of BISYS, serves as the transfer agent
for the Funds ("Transfer Agent") and performs fund accounting.
PERFORMANCE INFORMATION
From time to time performance information for the Equity Investment Funds
showing their average annual total return and aggregate total return may be
presented in advertisements, sales literature and shareholder reports. Such
performance figures are based on historical earnings and are not intended to
indicate future performance. Total return will be calculated for the period
since the establishment of the Equity Investment Funds and will, unless
otherwise noted, reflect the imposition of the maximum sales charge. For the
information of Shareholders not subject to a sales charge, the Equity Investment
Funds may also publish total return figures which include no sales charge.
Average annual total return is measured by comparing the value of an investment
in an Equity Investment Fund at the beginning of the relevant period to the
redemption value of the investment at the end of the period (assuming immediate
reinvestment of any dividends or capital gains distributions) and annualizing
the result. Aggregate total return is measured similarly to average annual total
return, however the resulting difference is not annualized. The yield of an
Equity Investment Fund is determined by annualizing the Fund's net investment
income per share during a recent specified thirty-day period ending on the last
day of the most recent calendar quarter, and dividing that amount by the Fund's
per share net asset value on the last day of the period.
In addition, from time to time the Funds may present their respective
distribution rates in supplemental sales literature which is accompanied or
preceded by a prospectus and in Shareholder reports. Distribution rates will be
computed by dividing the distribution per share made by a Fund over a twelve-
month period by the maximum offering price per share. The calculation of income
in the distribution rate includes both income and capital gain dividends and
does not reflect unrealized gains or losses, although a Fund may also present a
distribution rate excluding the effect of capital gains. The distribution
prospectus
30
<PAGE> 105
rate differs from the yield, because it includes capital items which are often
non-recurring in nature, whereas yield does not include such items. Distribution
rates may also be presented excluding the effect of a sales charge, if any.
Investors may also judge the performance of an Equity Investment Fund by
comparing it to the performance of other mutual funds or mutual fund portfolios
with comparable investment objectives and policies through various mutual fund
or market indices such as those prepared by Dow Jones & Co., Inc., Standard &
Poor's Corporation, The Russell 2000 Index, and Morningstar, Inc. and to data
prepared by Lipper Analytical Services, Inc. Comparisons may also be made to
indices or data published in Money Magazine, Forbes, Barron's, The Wall Street
Journal, The New York Times, Business Week, Pensions and Investments, Fortune,
Ibbotson Associates, Inc., U.S.A. Today, CDA/Wiesenberger, American Banker,
Institutional Investor and local newspapers. In addition to performance
information, general information about these Funds that appears in a publication
such as those mentioned above may be included in advertisements and in reports
to Shareholders.
Total return and yield are functions of the type and quality of instruments held
in the portfolio, operating expenses, and market conditions. Consequently, total
return and yield will fluctuate and are not necessarily representative of future
results. Any fees charged by a Participating Organization with respect to
Customer accounts for investing in shares of Equity Investment Funds will not be
included in performance calculations; such fees, if charged, will reduce the
actual performance from that quoted. Further information regarding Performance
Comparisons may be found in the Statement of Additional Information under
"Performance Comparisons."
Additional information about the performance of each Equity Investment Fund is
contained in the Funds' Annual Report to Shareholders, which is available free
of charge by calling the telephone number on the front page of this Prospectus.
THE GROWTH EQUITY FUND
The Growth Equity Fund commenced operations on November 3, 1997, immediately
subsequent to the transfer of assets by the Equity Growth Trust B to the Growth
Equity Fund in exchange for shares of the Growth Equity Fund. The Fund's
portfolio of investments upon commencement of operations was the same as the
portfolio of the Equity Growth Trust B immediately prior to the transfer.
The Equity Growth Trust B is not a registered investment company as it is exempt
from registration under the 1940 Act. Since, in a practical sense, the common
trust fund constitutes a "predecessor" of the Growth Equity Fund, the Growth
Equity Fund calculates its performance for periods commencing prior to the
transfer of the Equity Growth Trust B's assets to the Growth Equity Fund by
including the Equity Growth Trust B's total return adjusted to reflect the
deduction of anticipated fees and expenses, absent any waivers, applicable to
the Growth Equity Fund as stated in the Fee Table in this prospectus. These fees
and expenses include applicable sales charges and Rule 12b-1 Fees.
The Growth Equity Fund from time to time may advertise certain investment
performance figures, as discussed below. The performance figures shown
immediately below are based on historical earnings of the Equity Growth Trust B,
but past performance data is not necessarily indicative of future performance of
the Fund.
prospectus
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<PAGE> 106
COMPARATIVE PERFORMANCE INFORMATION REGARDING THE EQUITY GROWTH
TRUST B AND THE GROWTH EQUITY FUND
NO LOAD AVERAGE ANNUAL TOTAL RETURN*
<TABLE>
<CAPTION>
FUND 1 YEAR 3 YEAR SINCE INCEPTION
- ------------------------------------------------------------------- ------ ------ ---------------
<S> <C> <C> <C>
Equity Growth Trust B.............................................. 44.25% 27.66% 27.14%
</TABLE>
AVERAGE ANNUAL TOTAL RETURN SUBJECT TO SALES LOAD**
<TABLE>
<CAPTION>
FUND 1 YEAR 3 YEAR SINCE INCEPTION
- ------------------------------------------------------------------- ------ ------ ---------------
<S> <C> <C> <C>
Equity Growth Trust B.............................................. 36.96% 25.48% 25.13%
</TABLE>
- ---------------
* Figures were calculated pursuant to a methodology established by the SEC. The
inception date of the Equity Growth Trust B was June 30, 1994. The one year
and three year total return figures are as of August 31, 1997.
** The maximum sales load is 5.00% for the American Performance Growth Equity
Fund.
The aggregate annual return for the Equity Growth Trust B from June 30, 1994
through August 31, 1997, absent any sales load, was 117.19%. The aggregate
annual return for the Equity Growth Trust B from June 30, 1994 through August
31, 1997, taking into account a sales load, was 106.30%.
The above-quoted performance data is the performance of the Equity Growth Trust
B for the period before the Growth Equity Fund commenced operations adjusted to
reflect the deduction of fees and expenses applicable to the American
Performance Growth Equity Fund as stated in this prospectus in the Fee Table
(i.e., adjusted to reflect anticipated expenses, net of management fee waivers).
The Equity Growth Trust B was not registered under the 1940 Act and therefore
was not subject to certain investment restrictions, limitations and
diversification requirements imposed by the Act and the Code. If the Equity
Growth Trust B had been registered under the 1940 Act, its performance may have
been adversely affected. The investment objective, restrictions and guidelines
of the Growth Equity Fund are substantially similar to the Equity Growth Trust B
and both are managed by the same personnel.
MISCELLANEOUS
Shareholders will receive unaudited semi-annual reports and annual reports
audited by independent public accountants.
As used in this Prospectus and in the Statement of Additional Information,
"assets belonging to" a Fund means the consideration received by the Funds upon
the issuance or sale of Shares in that Fund, together with all income, earnings,
profits, and proceeds derived from the investment thereof including any proceeds
from the sale, exchange, or liquidation of such investments, and any funds or
payments derived from any reinvestment of such proceeds, and any general assets
of the Funds not readily identified as belonging to a particular Fund that are
allocated to that Fund by the Funds' Board of Trustees. The Board of Trustees
may allocate such general assets in any manner it deems fair and equitable. It
is anticipated that the factor that will be used by the Board of Trustees in
making allocations of general assets to particular Funds will be the relative
net asset values of the respective Funds at the
prospectus
32
<PAGE> 107
time of allocation. Assets belonging to a particular Fund are charged with the
direct liabilities and expenses with respect to that Fund, and with a share of
the general liabilities and expenses of the Funds not readily identified as
belonging to a particular Fund that are allocated to that Fund in proportion to
the relative net asset values of the respective Funds at the time of allocation.
The timing of allocations of general assets and general liabilities and expenses
of the Funds to particular Funds will be determined by the Board of Trustees of
the Funds and will be in accordance with generally accepted accounting
principles. Determinations by the Board of Trustees of the Funds as to the
timing of the allocation of general liabilities and expenses and as to the
timing and allocable portion of any general assets with respect to a particular
Fund are conclusive.
As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding Shares" of the Funds or a particular Fund
means the affirmative vote, at a meeting of Shareholders duly called, of the
lesser of (a) 67% or more of the outstanding Shares of the Funds or such Fund
present at a meeting at which the holders of more than 50% of the outstanding
Shares of the Funds or such Fund are represented in person or by proxy, or (b)
the holders of more than 50% of the outstanding shares of the Funds or such
Fund.
Inquiries regarding each Equity Investment Fund may be directed in writing to
the Funds at 3435 Stelzer Road, Columbus, Ohio 43219, or by calling toll free
(800) 762-7085.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE EQUITY
INVESTMENT FUNDS OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING BY THE EQUITY INVESTMENT FUNDS OR BY THE DISTRIBUTOR IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
prospectus
33
<PAGE> 108
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<PAGE> 109
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<PAGE> 110
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 111
AMERICAN PERFORMANCE FUNDS
EQUITY INVESTMENT FUNDS
EQUITY FUND
AGGRESSIVE GROWTH FUND
BALANCED FUND
GROWTH EQUITY FUND
INVESTMENT ADVISER
Bank of Oklahoma, N.A.
Bank Oklahoma Tower
Tulsa, Oklahoma 74103
ADMINISTRATOR AND
DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-3055
LEGAL COUNSEL
Ropes & Gray
One Franklin Square
1301 K Street N.W.
Suite 800 East
Washington, DC 20005
AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
[AMERICAN PERFORMANCE FUNDS LOGO]
AMERICAN PERFORMANCE FUNDS
The Right Fit For Your Investment Goals
EQUITY FUND
AGGRESSIVE GROWTH
FUND
BALANCED FUND
GROWTH EQUITY FUND
Prospectus
December 17, 1997
<PAGE> 112
CROSS REFERENCE SHEET
---------------------
AMERICAN PERFORMANCE FUNDS
--------------------------
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
<TABLE>
<CAPTION>
Form N-1A Part B Item
- ---------------------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History The Funds; Additional
Information - Description of Shares
13. Investment Objectives Investment Objective and Policies
and Policies
14. Management of the Fund Management of the Funds
15. Control Persons and Principal Additional Information - Miscellaneous
Holders of Securities
16. Investment Advisory and Management of the Funds
Other Services
17. Brokerage Allocation Management of the Funds - Portfolio
and Other Practices Transactions
18. Capital Stock and Other Valuation; Additional Purchase and
Securities Redemption Information; Additional
Information
19. Purchase, Redemption and Valuation; Additional Purchase and
Pricing of Securities Redemption Information; Management
Being Offered of the Funds
</TABLE>
<PAGE> 113
<TABLE>
<S> <C>
20. Tax Status Investment Objective and Policies -
Additional Tax Information Concerning
All of the Funds; Investment Objective
and Policies - Additional Tax
Information Concerning the Intermediate
Tax-Free Bond Fund
21. Underwriters Management of the Funds - Distributor;
Management of the Funds - Distribution
22. Calculation of Performance Additional Information -
Data Calculation of Performance Data
23. Financial Statements Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of the Registration Statement.
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STATEMENT OF ADDITIONAL INFORMATION
AMERICAN PERFORMANCE FUNDS
AMERICAN PERFORMANCE MONEY MARKET FUNDS
AMERICAN PERFORMANCE BOND INVESTMENT FUNDS
AMERICAN PERFORMANCE EQUITY INVESTMENT FUNDS
December 17, 1997
This Statement of Additional Information is not a Prospectus, but should be read
in conjunction with the Prospectuses for the American Performance Money Market
Funds, the American Performance Bond Investment Funds, and the American
Performance Equity Investment Funds, each of which bears the same date as this
Statement of Additional Information. This Statement of Additional Information is
incorporated in its entirety into those Prospectuses. A copy of each Prospectus
for the American Performance Funds (the "Funds") may be obtained by writing to
the Funds at 3435 Stelzer Road, Columbus, Ohio 43219, or by telephoning toll
free at (800) 762-7085.
<PAGE> 115
TABLE OF CONTENTS
-----------------
<TABLE>
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Page
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THE FUNDS..................................................................................................1
INVESTMENT OBJECTIVE AND POLICIES..........................................................................1
ADDITIONAL INFORMATION ON FUND INSTRUMENTS...........................................................1
Bank Obligations............................................................................1
U.S. Government Obligations.................................................................3
Purchases of Options........................................................................4
Covered Calls...............................................................................4
Puts........................................................................................6
Futures Contracts...........................................................................7
Mortgage-Related Securities.................................................................8
Loan Participation..........................................................................9
Foreign Investments........................................................................10
When-Issued Securities.....................................................................10
Securities Lending.........................................................................10
Repurchase Agreements......................................................................11
Municipal Securities.......................................................................11
INVESTMENT RESTRICTIONS.............................................................................12
PORTFOLIO TURNOVER..................................................................................14
ADDITIONAL TAX INFORMATION CONCERNING ALL THE FUNDS ................................................15
ADDITIONAL TAX INFORMATION CONCERNING THE INTERMEDIATE
TAX-FREE BOND FUND.........................................................................17
VALUATION.................................................................................................19
THE MONEY MARKET FUNDS..............................................................................19
THE BOND INVESTMENT FUNDS AND THE EQUITY
INVESTMENT FUNDS...........................................................................19
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION............................................................20
MANAGEMENT OF THE FUNDS...................................................................................20
TRUSTEES AND OFFICERS...............................................................................20
INVESTMENT ADVISER AND SUB-ADVISER..................................................................22
DISTRIBUTION........................................................................................25
GLASS-STEAGALL ACT..................................................................................27
PORTFOLIO TRANSACTIONS..............................................................................28
ADMINISTRATOR.......................................................................................30
SUB-ADMINISTRATOR...................................................................................32
</TABLE>
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<TABLE>
<S> <C>
DISTRIBUTOR.........................................................................................32
CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTANT.......................................................33
AUDITORS ...........................................................................................35
LEGAL COUNSEL.......................................................................................35
ADDITIONAL INFORMATION....................................................................................35
DESCRIPTION OF SHARES...............................................................................35
SHAREHOLDER AND TRUSTEE LIABILITY...................................................................36
CALCULATION OF PERFORMANCE DATA ..................................................................37
PERFORMANCE COMPARISONS.............................................................................39
MISCELLANEOUS.......................................................................................40
FINANCIAL STATEMENTS......................................................................................43
APPENDIX..................................................................................................44
</TABLE>
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THE FUNDS
The American Performance Funds (the "Funds") consist of ten series of
units of beneficial interest ("Shares") each representing interests in one of
ten separate investment portfolios of a diversified open-end management
investment company: the American Performance U.S. Treasury Fund (the "U.S.
Treasury Fund"), the American Performance Cash Management Fund (the "Cash
Management Fund"), the American Performance Equity Fund (the "Equity Fund"), the
American Performance Aggressive Growth Fund (the "Aggressive Growth Fund"), the
American Performance Balanced Fund (the "Balanced Fund"), the American
Performance Bond Fund (the "Bond Fund"), the American Performance Intermediate
Bond Fund (the "Intermediate Bond Fund"), the American Performance Intermediate
Tax-Free Bond Fund (the "Intermediate Tax-Free Bond Fund"), and the American
Performance Short-Term Income Fund (the "Short-Term Income Fund") and the
American Performance Growth Equity Fund (the "Growth Equity Fund"). The U.S.
Treasury Fund and the Cash Management Fund are sometimes referred to herein as
the "Money Market Funds," the Equity Fund, the Aggressive Growth Fund, the
Balanced Fund and the Growth Equity Fund are sometimes referred to herein as the
"Equity Investment Funds," and the Bond Fund, the Intermediate Bond Fund, the
Intermediate Tax-Free Bond Fund, and the Short-Term Income Fund are sometimes
referred to herein as the "Bond Investment Funds." Much of the information
contained herein expands upon subjects discussed in the Prospectuses for the
respective Funds. No investment in Shares of a Fund should be made without first
reading that Fund's Prospectus.
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement each Fund's investment objective and
policies as set forth in the respective Prospectus for that Fund.
ADDITIONAL INFORMATION ON FUND INSTRUMENTS
- ------------------------------------------
BANK OBLIGATIONS
----------------
The Cash Management Fund, the Bond Investment Funds and the Equity
Investment Funds may invest in obligations of the banking industry such as
bankers' acceptances, commercial paper, loan participations, bearer deposit
notes, promissory notes, floating or variable rate obligations, certificates of
deposit, and demand and time deposits. The Cash Management Fund will normally
invest more than 25% of its assets in such investments.
Bankers' acceptances: Bankers' acceptances are negotiable drafts or
bills of exchange typically drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity. The
Funds will invest in only those bankers' acceptances
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guaranteed by domestic and foreign banks having, at the time of investment,
total assets in excess of $1 billion (as of the date of their most recently
published financial statements).
Certificates of deposit: Certificates of deposit are negotiable
certificates issued against funds deposited in a commercial bank for a definite
period of time and earning a specified return. Certificates of deposit will be
those of domestic and foreign branches of U.S. commercial banks which, at the
time of purchase, have total assets in excess of $1 billion (as of the date of
their most recently published financial statements). Certificates of deposit may
also include those issued by foreign banks outside the United States with total
assets at the time of purchase, in excess of the equivalent of $1 billion. The
Funds may also invest in Eurodollar certificates of deposit which are U.S.
dollar-denominated certificates of deposit issued by branches of foreign and
domestic banks located outside the United States and Yankee certificates of
deposit which are certificates of deposit issued by a U.S. branch of a foreign
bank denominated in U.S. dollars and held in the United States.
In addition, the Funds may invest in bearer deposit notes, which are
negotiable time deposits with a specific maturity date issued by a bank, and
time deposits, which are interest bearing non-negotiable deposits at a bank that
have a specific maturity date.
Commercial Paper: Commercial paper consists of unsecured promissory
notes issued by corporations. Except as noted below with respect to variable
amount master demand notes, issues of commercial paper normally have maturities
of nine months or less and fixed rates of return.
The above Funds may also invest in Canadian Commercial Paper which is
commercial paper issued by a Canadian corporation or a Canadian counterpart of a
U.S. corporation and in Europaper which is U.S. dollar-denominated commercial
paper of a foreign issuer.
Variable amount and floating rate notes: Commercial paper eligible for
investment by the Cash Management Fund, the Equity Investment Funds, and the
Bond Investment Funds may include variable amount and floating rate notes. A
variable rate note is one whose terms provide for the readjustment of its
interest rate on set dates and which, upon such readjustment, can reasonably be
expected to have a fair market value that approximates its par value. A floating
rate note is one whose terms provide for the readjustment of its interest rate
whenever a specified interest rate changes and which, at any time, can
reasonably be expected to have a market value that approximates its par value.
Such notes are frequently not rated by credit rating agencies; however, unrated
variable and floating rate notes purchased by a Fund will be determined by the
Investment Adviser or Sub-Adviser under guidelines established by the Funds'
Board of Trustees to be of comparable quality, at the time of purchase, to rated
instruments which are eligible for purchase under the Fund's investment
policies. In making such determinations, the Investment Adviser or Sub-Adviser
will consider the earning power, cash flow and other liquidity ratios of the
issuers of such notes (such issuers include financial, merchandising, bank
holding and other companies) and will monitor their financial condition.
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Although there may be no active secondary market with respect to a particular
variable or floating rate note purchased by a Fund, the Fund may re-sell the
note at any time to a third party. The absence of such an active secondary
market, however, could make it difficult for the Fund to dispose of the variable
or floating rate note involved in the event the issuer of the note defaulted on
its payment obligations, and the Fund could, for this or other reasons, suffer a
loss to the extent of the default. Variable or floating rate notes may be
secured by bank letters of credit or drafts.
Variable or floating rate notes with stated maturities of more than one
year may, under the amortized cost rule of the Securities and Exchange
Commission ("SEC"), 17 C.F.R. Section 270.2a-7, be deemed to have shorter
maturities as follows:
(1) A note that is issued or guaranteed by the U.S. government or any
agency thereof which has a variable rate of interest readjusted no less
frequently than every 762 days will be deemed by a Fund to have a maturity equal
to the period remaining until the next readjustment of the interest rate.
(2) A variable rate note, the principal amount of which is scheduled on
the face of the instrument to be paid in 397 days or less, will be deemed by a
Fund to have a maturity equal to the period remaining until the next
readjustment of the interest rate.
(3) A variable rate note that is subject to a demand feature will be
deemed by a Fund to have a maturity equal to the longer of the period remaining
until the next readjustment of the interest rate or the period remaining until
the principal amount can be recovered through demand.
(4) A floating rate note that is subject to a demand feature will be
deemed by a Fund to have a maturity equal to the period remaining until the
principal amount can be recovered through demand.
As used above, a note is "subject to a demand feature" where the Fund
is entitled to receive the principal amount of the note either at any time on no
more than 30 days' notice or at specified intervals not exceeding one year and
upon no more than 30 days' notice.
U.S. GOVERNMENT OBLIGATIONS
---------------------------
The U.S. Treasury Fund invests exclusively in obligations issued or
guaranteed by the U.S. government, some of which may be subject to repurchase
agreements. All of the other Funds may invest in obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities, some of
which may be subject to repurchase agreements. Obligations of certain agencies
and instrumentalities of the U.S. government are supported by the full faith and
credit of the U.S. government; others are supported by the right of the issuer
to borrow from the government; others are supported by the discretionary
authority of the U.S.
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government to purchase the agency's obligations; and still others are supported
only by the credit of the instrumentality. No assurance can be given that the
U.S. government would provide financial support to U.S. government-sponsored
agencies or instrumentalities if it is not obligated to do so by law. A Fund
(excluding however, the U.S. Treasury Fund) will invest in the obligations of
such agencies or instrumentalities only when the Investment Adviser or
Sub-Adviser believes that the credit risk with respect thereto is minimal. For
information on mortgage-related securities issued by certain agencies or
instrumentalities of the U.S. government, see "Investment Objective and Policies
- -- Mortgage-Related Securities" in this Statement of Additional Information.
PURCHASES OF OPTIONS
--------------------
The Equity Investment Funds and Bond Investment Funds may purchase call
options. A call option gives the purchaser of the option the right to buy, and a
writer has the obligation to sell, the underlying security at the stated
exercise price at any time prior to the expiration of the option, regardless of
the market price of the security. The premium paid to the writer is
consideration for undertaking the obligations under the option contract. Call
options purchased by the foregoing Funds will be valued at the last sale price,
or in the absence of such a price, at the mean between bid and asked price.
The Equity Investment Funds and Bond Investment Funds may also purchase
index options. Index options (or options on securities indices) are similar in
many respects to options on securities, except that an index option gives the
holder the right to receive, upon exercise, cash instead of securities, if the
closing level of the securities index upon which the option is based is greater
than the exercise price of the option.
Purchasing options is a specialized investment technique that entails a
substantial risk of a complete loss of the amounts paid as premiums to writers
of options. Each of the Equity Investment and Bond Investment Funds will
purchase call options and index options only when its total investment in such
options immediately after such purchase, will not exceed 5% of its total assets.
COVERED CALLS
-------------
The Equity Investment Funds and the Bond Investment Funds may write
(sell) "covered" call options and purchase options to close out options
previously written by the Fund. Such options must be listed on a national
securities exchange. The purpose of each Fund in writing covered call options is
to generate additional premium income. This premium income will serve to enhance
the Fund's total return and will reduce the effect of any price decline of the
security involved in the option.
A call option gives the holder (buyer) the "right to purchase" a
security at a specified price (the exercise price) at any time until a certain
date (the expiration date). So long as the
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obligation of the writer of a call option continues, the writer may be assigned
an exercise notice by the broker-dealer through whom such option was sold,
requiring the writer to deliver the underlying security against payment of the
exercise price. This obligation terminates upon the expiration of the call
option, or such earlier time at which the writer effects a closing purchase
transaction by purchasing an option identical to that previously sold. To secure
the writer's obligation to deliver the underlying security in the case of a call
option, subject to the rules of the Options Clearing Corporation, a writer is
required to deposit in escrow the underlying security or other assets in
accordance with such rules. The Equity Investment Funds and the Bond Investment
Funds will write only covered call options. This means that a Fund will only
write a call option on a security which a Fund already owns. In order to comply
with the requirements of the securities laws in several states, a Fund will not
write a covered call option if, as a result, the aggregate market value of all
portfolio securities covering call options or currencies subject to put options
exceeds 25% of the market value of the Fund's net assets.
Portfolio securities on which call options may be written will be
purchased solely on the basis of investment considerations consistent with each
Fund's investment objectives. The writing of covered call options is a
conservative investment technique believed to involve relatively little risk (in
contrast to the writing of naked or uncovered options, which a Fund will not
do), but capable of enhancing the Fund's total return. When writing a covered
call option, a Fund, in return for the premium, gives up the opportunity for
profit from a price increase in the underlying security above the exercise
price, but conversely retains the risk of loss should the price of the security
decline. Unlike one who owns securities not subject to an option, a Fund has no
control over when it may be required to sell the underlying securities, since it
may be assigned an exercise notice at any time prior to the expiration of its
obligation as a writer. If a call option which a Fund has written expires, a
Fund will realize a gain in the amount of the premium; however, such gain may be
offset by a decline in the market value of the underlying security during the
option period. If the call option is exercised, a Fund will realize a gain or
loss from the sale of the underlying security. The security covering the call
will be maintained in a segregated account of the Fund's custodian. The Equity
Investment Funds and Bond Investment Funds do not consider a security covered by
a call to be "pledged" as that term is used in each Fund's policy which limits
the pledging or mortgaging of its net assets.
The premium received is the fair market value of an option. The premium
each Fund will receive from writing a call option will reflect, among other
things, the current market price of the underlying security, the relationship of
the exercise price to such market price, the historical price volatility of the
underlying security, and the length of the option period. Once the decision to
write a call option has been made, the Investment Adviser in determining whether
a particular call option should be written on a particular security, will
consider the reasonableness of the anticipated premium and the likelihood that a
liquid secondary market will exist for those options. The premium received by a
Fund for writing covered call options will be recorded as a liability in the
Fund's statement of assets and liabilities. This liability
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will be adjusted daily to the option's current market value, which will be the
latest sale price at the time at which the net asset value per Share of the Fund
is computed (close of the New York Stock Exchange ("NYSE")), or, in the absence
of such sale, the latest asked price. The liability will be extinguished upon
expiration of the option, the purchase of an identical option in the closing
transaction, or delivery of the underlying security upon the exercise of the
option.
Closing transactions will be effected in order to realize a profit on
an outstanding call option, to prevent an underlying security from being called,
or to permit the sale of the underlying security. Furthermore, effecting a
closing transaction will permit a Fund to write another call option on the
underlying security with either a different exercise price or expiration date or
both. If a Fund desires to sell a particular security from its portfolio on
which it has written a call option, it will seek to effect a closing transaction
prior to, or concurrently with, the sale of the security. There is, of course,
no assurance that a Fund will be able to effect such closing transactions at a
favorable price. If a Fund cannot enter into such a transaction, it may be
required to hold a security that it might otherwise have sold, in which case it
would continue to be at market risk on the security. This could result in higher
transaction costs. A Fund will pay transaction costs in connection with the
writing of options to close out previously written options. Such transaction
costs are normally higher than those applicable to purchases and sales of
portfolio securities.
Call options written by a Fund will normally have expiration dates of
less than nine months from the date written. The exercise price of the options
may be below, equal to, or above the current market values of the underlying
securities at the time the options are written. From time to time, a Fund may
purchase an underlying security for delivery in accordance with an exercise
notice of a call option assigned to it, rather than delivering such security
from its portfolio. In such cases, additional costs will be incurred.
A Fund will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from the writing of the option. Because increases in the market price
of a call option will generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Fund.
PUTS
----
The Equity Investment Funds, Bond Investment Funds and the Cash
Management Fund may acquire "puts" with respect to securities held in their
portfolios. A put is a right to sell a specified security (or securities) within
a specified period of time at a specified exercise price. The Cash Management
Fund may sell, transfer, or assign a put only in conjunction with the sale,
transfer, or assignment of the underlying security or securities.
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The amount payable to a Fund upon its exercise of a "put" on debt
securities is normally (i) the Fund's acquisition cost of the securities
(excluding any accrued interest which the portfolio paid on their acquisition),
less any amortized market premium or plus any amortized market or original issue
discount during the period the Fund owned the securities, plus (ii) all interest
accrued on the securities since the last interest payment date during that
period.
Puts may be acquired by a Fund to facilitate the liquidity of its
portfolio assets. Puts may also be used to facilitate the reinvestment of a
Fund's assets at a rate of return more favorable than that of the underlying
security or to limit the potential losses involved in a decline in an equity
security's market value.
Each Fund intends to enter into puts only with dealers, banks, and
broker-dealers which, in the Investment Adviser's or Sub-Adviser's opinion,
present minimal credit risks.
FUTURES CONTRACTS
-----------------
The Equity Investment Funds and the Bond Investment Funds may enter
into contracts for the future delivery of securities and futures contracts based
on a specific security, class of securities or an index, purchase or sell
options on any such futures contracts, and engage in related closing
transactions. A futures contract on a securities index is an agreement
obligating either party to pay, and entitling the other party to receive, while
the contract is outstanding, cash payments based on the level of a specified
securities index.
When interest rates are expected to rise or market values of portfolio
securities are expected to fall, a Fund can seek through the sale of futures
contracts to offset a decline in the value of its portfolio securities. When
interest rates are expected to fall or market values are expected to rise, a
Fund, through the purchase of such contracts, can attempt to secure better rates
or prices for the Fund than might later be available in the market when it
effects anticipated purchases.
The acquisition of put and call options on futures contracts will,
respectively, give a Fund the right (but not the obligation), for a specified
price, to sell or to purchase the underlying futures contract, upon exercise of
the option, at any time during the option period.
Futures transactions involve brokerage costs and require a Fund to
segregate assets to cover contracts that would require it to purchase
securities. A Fund may lose the expected benefit of futures transactions if
interest rates or securities prices move in an unanticipated manner. Such
unanticipated changes may also result in poorer overall performance than if the
Fund had not entered into any futures transactions. In addition, the value of a
Fund's futures positions may not prove to be perfectly or even highly correlated
with the value of its portfolio securities, limiting the Fund's ability to hedge
effectively against interest rate and/or market
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risk and giving rise to additional risks. There is no assurance of liquidity in
the secondary market for purposes of closing out futures positions.
Aggregate initial margin deposits for futures contracts, and premiums
paid for related options, may not exceed 5% of an Equity Investment or Bond
Investment Fund's total assets, and the value of securities that are the subject
of such futures and options (both for receipt and delivery) may not exceed
one-third of the market value of an Equity Investment or Bond Investment Fund's
total assets. Futures transactions will be limited to the extent necessary to
maintain each Equity Investment Funds' or Bond Investment Funds' qualification
as a regulated investment company ("RIC").
MORTGAGE-RELATED SECURITIES
---------------------------
Each of the Funds may, consistent with its investment objective,
restrictions and policies, invest in mortgage-related securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities. The Equity
Fund, the Aggressive Growth Fund, the Growth Equity Fund and the Intermediate
Tax-Free Bond Fund will each limit its total investment in such securities to 5%
or less of net assets.
Mortgage-related securities, for purposes of the Funds' Prospectuses
and this Statement of Additional Information, represent pools of mortgage loans
assembled for sale to investors by various governmental agencies such as the
Government National Mortgage Association and government-related organizations
such as the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation, as well as by nongovernmental issuers such as commercial
banks, savings and loan institutions, mortgage bankers, and private mortgage
insurance companies. Although certain mortgage-related securities are guaranteed
by a third party or otherwise similarly secured, the market value of the
security, which may fluctuate, is not so secured. If a Fund purchases a
mortgage-related security at a premium, that portion may be lost if there is a
decline in the market value of the security whether resulting from changes in
interest rates or prepayments in the underlying mortgage collateral. As with
other interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise, the converse is
not necessarily true since in periods of declining interest rates the mortgages
underlying the securities are prone to prepayment. For this and other reasons, a
mortgage-related security's stated maturity may be shortened by unscheduled
prepayments on the underlying mortgages and, therefore, it is not possible to
predict accurately the security's return to a Fund. In addition, regular
payments received in respect of mortgage-related securities include both
interest and principal. No assurance can be given as to the return a Fund will
receive when these amounts are reinvested.
There are a number of important differences among the agencies and
instrumentalities of the U.S. government that issue mortgage-related securities
and among the securities that they issue. Mortgage-related securities issued by
the Government National Mortgage
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Association ("GNMA") include GNMA Mortgage Pass-Through Certificates (also known
as "Ginnie Maes") which are guaranteed as to the timely payment of principal and
interest by GNMA and such guarantee is backed by the full faith and credit of
the United States. GNMA is a wholly-owned U.S. government corporation within the
Department of Housing and Urban Development. GNMA certificates also are
supported by the authority of GNMA to borrow funds from the U.S. government to
make payments under its guarantee. Mortgage-related securities issued by the
Federal National Mortgage Association ("FNMA") include FNMA Guaranteed Mortgage
Pass-Through Certificates (also known as "Fannie Maes") which are solely the
obligations of the FNMA and are not backed by or entitled to the full faith and
credit of the United States. The FNMA is a government-sponsored organization
owned entirely by private stock-holders. Fannie Maes are guaranteed as to timely
payment of principal and interest by FNMA. Mortgage-related securities issued by
the Federal Home Loan Mortgage Corporation ("FHLMC") include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs" or "PCs"). The FHLMC is
a corporate instrumentality of the United States, created pursuant to an Act of
Congress, which is owned entirely by Federal Home Loan Banks. Freddie Macs are
not guaranteed by the United States or by any Federal Home Loan Banks and do not
constitute a debt or obligation of the United States or of any Federal Home Loan
Bank. Freddie Macs entitle the holder to timely payment of interest, which is
guaranteed by the FHLMC. The FHLMC guarantees either ultimate collection or
timely payment of all principal payments on the underlying mortgage loans. When
the FHLMC does not guarantee timely payment of principal, FHLMC may remit the
amount due on account of its guarantee of ultimate payment of principal at any
time after default on an underlying mortgage, but in no event later than one
year after it becomes payable.
LOAN PARTICIPATION
------------------
As noted in its Prospectus, the Cash Management Fund may purchase
certain loan participation interests. Loan participation interests represent
interests in bank loans made to corporations. The contractual arrangement with
the bank transfers the cash stream of the underlying bank loan to the
participating investor. Because the issuing bank does not guarantee the
participations, they are subject to the credit risks generally associated with
the underlying corporate borrower. The secondary market, if any, for these loan
participations is extremely limited and any such participations purchased by the
investor are regarded as illiquid. In addition, because it may be necessary
under the terms of the loan participation for the investor to assert through the
issuing bank such rights as may exist against the underlying corporate borrower,
in the event the underlying corporate borrower fails to pay principal, and
interest when due, the investor may be subject to delays, expenses and risks
that are greater than those that would have been involved if the investor had
purchased a direct obligation (such as commercial paper) of such borrower.
Moreover, under the terms of the loan participation the investor may be regarded
as a creditor of the issuing bank (rather than of the underlying corporate
borrower), so that the issuer may also be subject to the risk that the issuing
bank may become insolvent. Further, in the event of the bankruptcy or insolvency
of
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the corporate borrower, the loan participation may be subject to certain
defenses that can be asserted by such borrower as a result of improper conduct
by the issuing bank.
FOREIGN INVESTMENTS
-------------------
The Cash Management Fund, the Equity Investment Funds, the Bond Fund,
the Intermediate Bond Fund and the Short-Term Income Fund may, subject to their
investment objectives, restrictions and policies, invest in certain obligations
or securities of foreign issuers. Permissible investments may consist of
obligations of foreign branches, agencies or subsidiaries of U.S. banks and of
foreign banks, including European Certificates of Deposit, European Time
Deposits, Canadian Time Deposits and Yankee Certificates of Deposit, and
investments in Canadian Commercial Paper, foreign securities and Europaper.
These instruments may subject a Fund to investment risks that differ in some
respects from those related to investments in obligations of U.S. domestic
issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income,
possible seizure, nationalization, or expropriation of foreign deposits, the
possible establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Such investments may also entail
higher custodial fees and sales commissions than domestic investments. Foreign
issuers of securities or obligations are often subject to accounting treatment
and engage in business practices different from those respecting domestic
issuers of similar securities or obligations. Foreign branches of U.S. banks and
foreign banks may be subject to less stringent reserve requirements than those
applicable to domestic branches of U.S. banks.
WHEN-ISSUED SECURITIES
----------------------
As discussed in the Prospectuses, each of the Funds may purchase
securities on a "when-issued" basis. When a Fund engages in "when-issued"
transactions, it relies on the seller to consummate the trade. Failure of the
seller to do so may result in the Fund's incurring a loss or missing the
opportunity to obtain a price considered to be advantageous.
SECURITIES LENDING
------------------
Each of the Funds may lend its portfolio securities to broker-dealers,
banks or institutional borrowers of securities. A Fund must receive 100%
collateral in the form of cash or U.S. government securities. This collateral
must be valued daily by the Fund's Investment Adviser or Sub-Adviser and should
the market value of the loaned securities increase, the borrower must furnish
additional collateral to the Fund. During the time portfolio securities are on
loan, the borrower will pay the Fund any dividends or interest paid on such
securities. Loans will be subject to termination by a Fund or the borrower at
any time. While a Fund will not have the right to vote securities in loan, it
intends to terminate the
B-10
<PAGE> 127
loan and regain the right to vote if that is considered important with respect
to the investment. A Fund will only enter into loan arrangements with
broker-dealers, banks or other institutions which the Investment Adviser or
Sub-Adviser has determined are creditworthy under guidelines established by the
Funds' Board of Trustees. Each Fund will limit securities loans to 5% of its net
assets.
REPURCHASE AGREEMENTS
---------------------
Securities held by each of the Funds may be subject to repurchase
agreements. Under the terms of a repurchase agreement, a Fund would acquire
securities from a financial institution such as a member bank of the Federal
Deposit Insurance Corporation or a registered broker-dealer, which the
Investment Adviser or Sub-Adviser deems creditworthy under guidelines approved
by the Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed-upon date and price. The repurchase price would
generally equal the price paid by the Fund plus interest negotiated on the basis
of current short-term rates, which may be more or less than the rate on the
underlying portfolio securities. The seller under a repurchase agreement will be
required to maintain the value of collateral held pursuant to the agreement at
not less than the repurchase price (including accrued interest). If the seller
were to default on its repurchase obligation or become insolvent, a Fund would
suffer a loss to the extent that the proceeds from a sale of the underlying
portfolio securities were less than the repurchase price under the agreement, or
to the extent that the disposition of such securities by the Fund were delayed
pending court action. Additionally, there is no controlling legal precedent
confirming that a Fund would be entitled, as against a claim by such seller or
its receiver or trustee in bankruptcy, to retain the underlying securities,
although the Board of Trustees of the Funds believes that, under the regular
procedures normally in effect for custody of each Fund's securities subject to
repurchase agreements and under applicable federal laws, a court of competent
jurisdiction would rule in favor of a Fund if presented with the question.
Securities subject to repurchase agreements will be held by each Fund's
Custodian, Sub-Custodian, or in the Federal Reserve/Treasury book-entry system.
Repurchase agreements are considered to be loans by an investment company under
the Investment Company Act of 1940, as amended (the "1940 Act").
MUNICIPAL SECURITIES
--------------------
As a matter of fundamental policy, under normal market conditions, at
least 80% of the net assets of the Intermediate Tax-Free Bond Fund will be
invested in Municipal Securities. The Bond Fund, the Intermediate Bond Fund and
the Short-Term Income Fund, under normal market conditions, may invest in
municipal securities which are not exempt from federal income taxes. Municipal
Securities include debt obligations issued to obtain funds for various public
purposes, such as the construction of a wide range of public facilities, the
refunding of outstanding obligations, the payment of general operating expenses,
and the extension of loans to other public institutions and facilities. The
Intermediate Tax-Free Bond Fund may purchase short-term tax-exempt General
Obligations Notes, Tax Anticipation Notes,
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<PAGE> 128
Bond Anticipation Notes, Revenue Anticipation Notes, Project Notes, and other
forms of short-term tax exempt loans. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements, or other revenues. In addition, the Intermediate Tax-Free Bond Fund
may invest in other types of tax-exempt investments, such as municipal bonds,
private activity bonds, and pollution control bonds. The Intermediate Tax-Free
Bond Fund may also purchase tax-exempt commercial paper. While the issuing state
or local housing agency has the primary obligation with respect to its Project
Notes, they are also secured by the full faith and credit of the United States
through agreements with the issuing authority which provide that, if required,
the federal government will lend the issuer an amount equal to the principal of
and interest on the Project Notes.
There are, of course, variations in the quality of Municipal
Securities, both within a particular classification and between classifications,
and the yields on Municipal Securities depend upon a variety of factors,
including general money market conditions, the financial condition of the
issuer, general conditions of the municipal bond market, the size of a
particular offering, the maturity of the obligations, and the rating of the
issue. The ratings of nationally recognized statistical ratings organizations
("NRSROs") represent their opinions as to the quality of Municipal Securities.
It should be emphasized, however, that ratings are general and are not absolute
standards of quality, and Municipal Securities with the same maturity, interest
rate and rating may have different yields while Municipal Securities of the same
maturity and interest rate with different ratings may have the same yield.
Subsequent to its purchase by the Intermediate Tax-Free Bond Fund, an issue of
Municipal Securities may cease to be rated or its rating may be reduced below
the minimum rating required for purchase by the Fund. The Fund's Investment
Adviser will consider such an event in determining whether the Fund should
continue to hold the obligations.
Information about the financial condition of issuers of Municipal
Securities may be less available than about corporations a class of whose
securities is registered under the Securities Exchange Act of 1934.
An issuer's obligations under its Municipal Securities are subject to
the provisions of bankruptcy, insolvency, and other laws affecting the rights
and remedies of creditors, such as the federal bankruptcy code, and laws, if
any, which may be enacted by Congress or state legislatures extending the time
for payment of principal or interest, or both, or imposing other constraints
upon the enforcement of such obligations. The power or ability of an issuer to
meet its obligations for the payment of interest on and principal of its
Municipal Securities may be materially adversely affected by litigation or other
conditions.
INVESTMENT RESTRICTIONS
-----------------------
Unless otherwise specifically noted, the following investment
restrictions may be changed with respect to a particular Fund only by a vote of
a majority of the outstanding
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<PAGE> 129
Shares of that Fund (as defined under "GENERAL INFORMATION--Miscellaneous" in
each Fund's Prospectus).
None of the Funds may:
1. Purchase securities on margin, sell securities short, or participate
on a joint or joint and several basis in any securities trading account, except,
in the case of the Intermediate Tax-Free Bond Fund, for use of short-term credit
necessary for clearance of purchases of portfolio securities.
2. Underwrite the securities of other issuers except to the extent that
a Fund may be deemed to be an underwriter under certain securities laws in the
disposition of "restricted securities."
3. Purchase or sell commodities or commodity contracts, except that
each of the Equity Investment Funds and Bond Investment Funds may invest in
futures contracts if, immediately thereafter, the aggregate initial margin
deposits for futures contracts, and premium paid for related options, does not
exceed 5% of the Fund's total assets and the value of securities that are the
subject of such futures and options (both for receipt and delivery) does not
exceed one-third of the value of the Fund's total assets.
4. Purchase participation or other direct interests in oil, gas or
mineral exploration or development programs or leases (although investments by
the Cash Management Fund, the Equity Investment Funds, and the Bond Investment
Funds in marketable securities of companies engaged in such activities are not
hereby precluded).
5. Invest in any issuer for purposes of exercising control or
management.
6. Purchase or retain securities of any issuer if the officers or
Trustees of the Funds or the officers or directors of its Investment Adviser
owning beneficially more than one-half of 1% of the securities of such issuer
together own beneficially more than 5% of such securities.
7. Invest more than 5% of a Fund's total assets in the securities of
issuers which together with any predecessors have a record of less than three
years of continuous operation.
8. Purchase or sell real estate, including limited partnership
interests, (however, each Fund, except a Money Market Fund, may, to the extent
appropriate to its investment objective, purchase securities secured by real
estate or interests therein or securities issued by companies investing in real
estate or interests therein).
9. Except with respect to the Growth Equity Fund, for as long as shares
of a Fund are registered in Arkansas and for so long as the State of Arkansas so
requires, invest more
B-13
<PAGE> 130
than 10% of a Fund's total assets in the securities of issuers which are
restricted as to disposition, other than restricted securities eligible for
resale pursuant to Rule 144A under the Securities Act of 1933.
In addition, the Money Market Funds may not:
1. Buy common stocks or voting securities, or state, municipal, or
private activity bonds.
In addition, the Intermediate Tax-Free Bond Fund may not:
1. Invest in private activity bonds where the payment of principal and
interest are the responsibility of a company (including its predecessors) with
less than three years of continuous operation.
If a percentage restriction is satisfied at the time of investment, a
later increase or decrease in such percentage resulting from a change in asset
value will not constitute a violation of such restriction.
PORTFOLIO TURNOVER
------------------
The portfolio turnover rate for each Fund is calculated by dividing the
lesser of purchases or sales of portfolio securities for the year by the monthly
average value of the portfolio securities. The calculation excludes all
securities whose maturities, at the time of acquisition, were one year or less.
Thus, for regulatory purposes, the portfolio turnovers with respect to the Money
Market Funds will be zero. Fund turnover may vary greatly from year to year as
well as within a particular year, and may also be affected by cash requirements
for redemptions of shares and by requirements which enable the Funds to receive
certain favorable tax treatments. Fund turnover will not be a limiting factor in
making portfolio decisions. High turnover rates will generally result in higher
transaction costs to a Fund and may result in additional tax consequences to a
Fund's Shareholders.
For the fiscal year ended August 31, 1997, the portfolio turnover rates
were as follows: 83.65% for the Bond Fund; 40.77% for the Intermediate Bond
Fund; 93.82% for the Equity Fund; 11.38% for the Intermediate Tax-Free Bond
Fund; 76.47% for the Aggressive Growth Fund; and 37.55% for the Short-Term
Income Fund. The portfolio turnover rate for the Balanced Fund for the fiscal
year ended August 31, 1997, was 95.92% with respect to the common stock portion
of its portfolio and 15.24% with respect to the fixed income portion of its
portfolio.
For the fiscal year ended August 31, 1996, the portfolio turnover rates
were as follows: 61.02% for the Bond Fund; 129.97% for the Intermediate Bond
Fund; 67.46% for the Equity Fund; 19.53% for the Intermediate Tax-Free Bond
Fund; 32.89% for the Aggressive Growth Fund; and 80.98% for the Short-Term
Income Fund. The portfolio turnover rate for the Balanced Fund for the fiscal
year ended August 31, 1996, was 71.89%
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<PAGE> 131
with respect to the common stock portion of its portfolio and 72.29% with
respect to the fixed income portion of its portfolio.
ADDITIONAL TAX INFORMATION CONCERNING ALL THE FUNDS
- ---------------------------------------------------
It is the policy of each of the Funds to meet the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
following such policy, each Fund expects to eliminate or reduce to a nominal
amount the federal income taxes to which it may be subject.
In order to qualify as a regulated investment company (a "RIC") under
Subchapter M each Fund must, among other things, (1) derive at least 90% of its
gross income from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of stock or securities,
foreign currencies or other income (including gains from options, futures or
forward contracts) derived with respect to its business of investing in stock,
securities or currencies, and (2) diversify its holdings so that at the end of
each quarter of its taxable year (i) at least 50% of the market value of the
Fund's assets is represented by cash or cash items, U.S. government securities,
securities of other RICs and other securities limited, in respect of any one
issuer, to an amount not greater than 5% of the value of the Fund's assets and
10% of the outstanding voting securities of such issuer, and (ii) not more than
25% of the value of its assets is invested in the securities of any one issuer
(other than U.S. government securities or securities of other RICS) or of two or
more issuers that the Fund controls and that are engaged in the same, similar or
related trades or businesses. These requirements may limit the range of the
Fund's investments. If a Fund qualifies as a RIC, it will not be subject to
federal income tax on the part of its net investment income and net realized
capital gains, if any, that it distributes to shareholders, provided the Fund
distributes during its taxable year at least (a) 90% of its "investment company
taxable income" (as that term is defined in the Code), and (b) 90% of the excess
of (i) its tax-exempt interest income over (ii) certain deductions attributable
to that income. Each Fund intends to make sufficient distributions to
Shareholders to meet this requirement.
In addition, until the start of the Aggressive Growth Fund's first tax
year beginning after August 5, 1997, the Aggressive Growth Fund must derive less
than 30% of its gross income from the sale or disposition of certain assets
(including stock or securities and certain options, futures contracts, forward
contracts and foreign currencies) held for less than three months in order to
qualify as a RIC. This requirement may restrict the degree to which the
Aggressive Growth Fund may engage in short-term trading. The other Funds do not
need to meet this requirement as they have already begun their first tax year
after August 5, 1997.
B-15
<PAGE> 132
The Code imposes a non-deductible 4% excise tax on RICs that do not
distribute in each calendar year (regardless of whether they otherwise have a
non-calendar taxable year) an amount equal to 98% of their "ordinary income" (as
defined) for the calendar year plus 98% of their capital gain net income for the
one-year period ending on October 31 of such calendar year, plus any
undistributed amounts from the prior year. For the foregoing purposes, a Fund is
treated as having distributed any amount on which it is subject to income tax
for any taxable year ending in such calendar year. A dividend paid to
Shareholders by a Fund in January of a year generally is deemed to have been
paid by the Fund on December 31 of the preceding year, if the dividend was
declared and payable to Shareholders of record on a date in October, November or
December of that preceding year. If distributions during a calendar year by a
Fund did not meet the 98% threshold, that particular Fund would be subject to
this 4% excise tax on the undistributed amounts. Each fund generally intends to
make distributions sufficient to avoid the imposition of this 4% excise tax.
A Fund's transactions in futures contracts, options, and foreign
currency denominated securities, and certain other investment and hedging
activities of the Fund, will be subject to special tax rules. These rules may
accelerate income to the Fund, defer losses to the Fund, cause adjustments in
the holding periods of the Fund's assets, convert short-term capital losses into
long-term capital losses, or otherwise affect the character of the Fund's
income. Consequently, the amount, timing, and character of distributions to
Shareholders could be affected. Income earned as a result of these transactions
would, in general, not be eligible for the dividends received deduction or for
treatment as exempt-interest dividends when distributed to Shareholders. Each
Fund will endeavor to make any available elections pertaining to these
transactions in a manner believed to be in the best interest of the Fund. The
tax consequences of certain hedging transactions have been modified by the
Taxpayer Relief Act of 1997 (the "1997 Act.")
The Funds will be required in certain cases to withhold and remit to
the U.S. Treasury 31% of taxable dividends and other distributions paid to any
Shareholder who has provided either an incorrect tax identification number or no
number at all, or who is subject to withholding by the Internal Revenue Service
for failure properly to include on his or her tax return payments of interest or
dividends. This withholding, known as back-up withholding, is not an additional
tax, and any amounts withheld may be credited against the Shareholder's ultimate
U.S. tax liability.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of Shares of each Fund. Further
tax information regarding the Intermediate Tax-Free Bond Fund is included in the
next section of this Statement of Additional Information. No attempt is made to
present a detailed explanation of the federal income tax treatment of each Fund
or its Shareholders, and this discussion is not intended as a substitute for
careful tax planning. Accordingly, potential purchasers of shares of a Fund are
urged to consult their tax advisers with specific reference to their own tax
situation.
B-16
<PAGE> 133
The foregoing discussion and the discussion below regarding the
Intermediate Tax-Free Bond Fund are based on tax laws and regulations which are
in effect on the date of this Statement of Additional Information; such laws and
regulations may be changed by legislative or administrative action, and such
changes may be retroactive.
ADDITIONAL TAX INFORMATION CONCERNING THE INTERMEDIATE TAX-FREE BOND FUND
- -------------------------------------------------------------------------
The Code permits a RIC which invests at least 50% of its assets in
tax-free Municipal Securities and other securities exempt from the regular
federal income tax to pass through to its investors, tax-free, net interest
income from such securities.
The policy of the Intermediate Tax-Free Bond Fund is to pay each year
as dividends substantially all the Fund's interest income net of certain
deductions. An exempt-interest dividend is any dividend or part thereof (other
than a capital gain dividend) paid by the Intermediate Tax-Free Bond Fund and
designated as an exempt-interest dividend in a written notice mailed to
Shareholders after the close of the Fund's taxable year. Such dividends will not
exceed, in the aggregate, the net interest the Fund receives during the taxable
year from Municipal Securities and other securities exempt from the regular
federal income tax. The percentage of the total dividends paid for any taxable
year which qualifies as federal exempt-interest dividends will be the same for
all Shareholders receiving dividends from the Intermediate Tax-Free Bond Fund
during such year, regardless of the period for which the Shares were held.
Exempt-interest dividends may be treated by the Intermediate Tax-Free
Bond Fund's Shareholders as items of interest excludable from their gross income
under Section 103(a) of the Code. However, each Shareholder of an Intermediate
Tax-Free Bond Fund is advised to consult his tax adviser with respect to whether
exempt-interest dividends would retain the exclusion under Section 103(a) if
such Shareholder were treated as a "substantial user" or a "related person" to
such user under Section 147(a) with respect to facilities financed through any
of the tax-exempt obligations held by the Fund. "Substantial user" is defined
under U.S. Treasury Regulations to include any non-exempt person who regularly
uses a part of such facilities in his or her trade or business and (a)(i) whose
gross revenues derived with respect to the facilities financed by the issuance
of bonds are more than 5% of the total revenues derived by all users of such
facilities or (ii) who occupies more than 5% of the usable area of the facility
or (b) for whom such facilities or a part thereof were specifically constructed,
reconstructed or acquired. "Related persons" include certain related natural
persons, affiliated corporations, partners and partnerships.
Dividends attributable to interest on certain private activity bonds
issued after August 7, 1986 must be included in alternative minimum taxable
income for purposes of determining liability (if any) for the alternative
minimum tax for individuals and corporations. In the case
B-17
<PAGE> 134
of corporations, all tax-exempt interest dividends will be taken into account in
determining adjusted current earnings for the purpose of computing the
alternative minimum tax.
The Intermediate Tax-Free Bond Fund may acquire rights regarding
specified portfolio securities under puts. (See "INVESTMENT OBJECTIVE AND
POLICIES -- Additional Information on Fund Instruments -- Puts" above for
further information.) The policy of the Intermediate Tax-Free Bond Fund is to
limit its acquisition of puts to those under which the Fund will be treated for
federal income tax purposes as the owner of the Municipal Securities acquired
subject to the put and the interest on the Municipal Securities will be
tax-exempt to the Fund. Although the Internal Revenue Service has issued a
published ruling that provides some guidance regarding the tax consequences of
the purchase of puts, there is currently no definitive rule that establishes the
tax consequences of many of the types of puts that the Funds could acquire under
the 1940 Act. Therefore, although the Intermediate Tax-Free Bond Fund will only
acquire a put after concluding that it will have the tax consequences described
above, the Internal Revenue Service could reach a different conclusion from that
of the Fund.
The Intermediate Tax-Free Bond Fund will distribute at least 90% of any
investment company taxable income for each taxable year. In general, the Fund's
investment company taxable income will be its taxable income subject to certain
adjustments and excluding the excess of any net long-term capital gain for the
taxable year over the net short-term capital loss, if any for such year. The
Intermediate Tax-Free Bond Fund will be taxed on any undistributed investment
company taxable income. To the extent such income is distributed by the
Intermediate Tax-Free Bond Fund (whether in cash or additional Shares), it will
be taxable to Shareholders as ordinary income. The dividends-received deduction
for corporations will not apply to such distributions.
If for any taxable year the Intermediate Tax-Free Bond Fund does not
qualify for the special tax treatment afforded RICs, all of its taxable income
would be subject to tax at regular corporate rates (without any deduction for
distributions to shareholders), and Municipal Securities interest income,
although not taxable to the Fund, would be taxable to Shareholders when
distributed as dividends.
Income exempt from federal income taxation must be considered when
determining whether Social Security payments or railroad retirement benefits
received by a Shareholder are subject to federal income taxation.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of Shares of the Intermediate
Tax-Free Bond Fund. Additional tax information concerning all of the Funds is
contained in the immediately preceding section of this Statement of Additional
Information. No attempt is made to present a detailed explanation of the income
tax treatment of the Intermediate Tax-Free Bond Fund or its Shareholders, and
this discussion is not intended as a substitute for careful tax planning.
B-18
<PAGE> 135
Accordingly, potential purchasers of shares of the Intermediate Tax-Free Bond
Fund are urged to consult their tax advisers with specific reference to their
own tax situation.
VALUATION
THE MONEY MARKET FUNDS
- ----------------------
The Money Market Funds have elected to use the amortized cost method of
valuation pursuant to Rule 2a-7 under the 1940 Act. This involves valuing an
instrument at its cost initially and thereafter assuming a constant amortization
to maturity of any discounts or premiums, regardless of the impact of
fluctuating interest rates on the market value of the instrument. This method
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price each Fund would receive if it sold the
instrument. The value of securities in the Funds can be expected to vary
inversely with changes in prevailing interest rates.
Pursuant to Rule 2a-7, the Money Market Funds will maintain a
dollar-weighted average portfolio maturity appropriate to their objective of
maintaining a stable net asset value per Share, provided that no Fund will
purchase any security with a remaining maturity of more than 397 days
(securities subject to repurchase agreements and certain variable or floating
rate instruments may bear longer maturities) nor maintain a dollar-weighted
average portfolio maturity which exceeds 90 days. The Funds' Board of Trustees
has also undertaken to establish procedures reasonably designed, taking into
account current market conditions and a Fund's investment objective, to
stabilize the net asset value per Share of the Money Market Funds for purposes
of sales and redemptions at $1.00. These procedures include review by the
Trustees, at such intervals as they deem appropriate, to determine the extent,
if any, to which the net asset value per Share of each Fund calculated by using
available market quotations deviates from $1.00 per Share. In the event such
deviation exceeds one half of one percent, the Rule requires that the Board
promptly consider what action, if any, should be initiated. If the Trustees
believe that the extent of any deviation from a Fund's $1.00 amortized cost
price per Share may result in material dilution or other unfair results to new
or existing investors, they will take such steps as they consider appropriate to
eliminate or reduce to the extent reasonably practicable any such dilution or
unfair results. These steps may include selling portfolio instruments prior to
maturity, shortening the dollar-weighted average portfolio maturity, withholding
or reducing dividends, reducing the number of a Fund's outstanding Shares
without monetary consideration, or utilizing a net asset value per Share
determined by using available market quotations.
THE BOND INVESTMENT FUNDS AND THE EQUITY INVESTMENT FUNDS
- ---------------------------------------------------------
Except as noted below, the Bond Investment Funds and the Equity
Investment Funds will value securities for which the principal market is a
securities exchange, at their
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<PAGE> 136
fair market values based upon the latest available sales price or, absent such a
price, by reference to the latest available bid prices in the principal market
in which such securities are normally traded. Securities, the principal market
for which is not a securities exchange, will be valued based on bid quotations
in such principal market. Securities and other assets for which quotations are
not readily available will be valued at their fair market value, as determined
in good faith under procedures established by, and under the general supervision
of, the Trustees of the Funds. Short-term securities are valued at amortized
cost, which approximates current value.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Shares in each Fund are sold on a continuous basis by BISYS Fund
Services (the "Distributor"), and the Distributor has agreed to use appropriate
efforts to solicit all purchase orders. As described in the Prospectuses, in
addition to purchasing Shares directly from the Distributor, Shares may be
purchased through procedures established by the Distributor in connection with
the requirements of Participating Organizations under the Funds' Distribution
and Shareholder Services Plan. Customers purchasing Shares of the Funds may
include officers, directors, or employees of the Investment Adviser and its
affiliates.
The Funds may suspend the right of redemption or postpone the date of
payment for Shares during any period when (a) trading on the NYSE is restricted
by applicable rules and regulations of the SEC, (b) the NYSE is closed for other
than customary weekend and holiday closings, (c) the SEC has by order permitted
such suspension, or (d) an emergency exists as determined by the SEC.
The Money Market Funds may redeem Shares involuntarily if redemption
appears appropriate in light of the Funds' responsibilities under the 1940 Act.
(See "VALUATION -- The Money Market Funds" above for further information.)
MANAGEMENT OF THE FUNDS
TRUSTEES AND OFFICERS
- ---------------------
The names of the trustees of the Funds, their addresses, and principal
occupations during the past five years are set forth in each of the Funds'
Prospectuses. The officers of the Funds, their addresses, and principal
occupations during the past five years are as follows:
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<PAGE> 137
<TABLE>
<CAPTION>
Position(s) Held Principal Occupation
Name and Address With the Funds During Past 5 Years
- ---------------- -------------- -------------------
<S> <C> <C>
Walter B. Grimm* Chairman, From June, 1992 to present,
3435 Stelzer Road President, and employee of BISYS Fund Services;
Columbus, OH 43219 Trustee from 1987 to June, 1992, President
of Leigh Consulting/Investments
(investment firm).
D'Ray Moore* Vice President and From February, 1990 to present,
3435 Stelzer Road Secretary employee of BISYS Fund Services.
Columbus, OH 43219
Alaina J. Metz* Assistant Secretary From June 1995 to present,
3435 Stelzer Road employee of BISYS Fund Services;
Columbus, OH 43219 from May 1989 to June 1995,
Supervisor, Mutual Fund Legal
Department, Alliance Capital
Management.
Thomas E. Line* Treasurer From December, 1996 to present,
3435 Stelzer Road employee of BISYS Fund Services;
Columbus, OH 43219 from September, 1989 to
November, 1996, Audit Senior
Manager at KPMG Peat Marwick LLP.
George O. Martinez* Vice President From April 1995 to present,
3435 Stelzer Road employee of BISYS Fund Services;
Columbus, OH 43219 from June 1989 -- March 1995,
Vice President and Associate
General Counsel, Alliance Capital
Management.
Jeffrey Cusick* Vice President and From July 1995 to present,
3435 Stelzer Road Assistant Secretary employee of BISYS Fund Services;
Columbus, OH 43219 from September 1993 to July
1995, Assistant Vice President,
Federated Administration
Services; from 1989 to September
1993, Client Services Manager,
Federated Administration
Services.
</TABLE>
B-21
<PAGE> 138
- ----------------
* Messrs. Grimm, Line, Martinez and Cusick and Ms. Moore and Ms. Metz
are each considered to be an "interested person" of the Funds as
defined in the 1940 Act.
COMPENSATION TABLE(1)
---------------------
<TABLE>
<CAPTION>
Total
Aggregate Pension or Compensation
Compensation Retirement from The
from The Benefits Estimated American
American Accrued As Annual Performance
Name of Person, Performance Part of Fund Benefits Upon Funds Paid to
Position Funds Expenses Retirement Trustee
- --------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Walter B. Grimm $0 None None $0
Michael J. Hall $5,250 None None $5,250
Perry A. Wimpey $5,250 None None $5,250
I. Edgar Hendrix $6,000 None None $6,000
</TABLE>
(1) Figures are for the Funds' fiscal year ended August 31, 1997.
INVESTMENT ADVISER AND SUB-ADVISER
- ----------------------------------
Investment advisory services are provided to each of the Funds by Bank
of Oklahoma, N.A. ("BOK" or "Investment Adviser"), pursuant to an Investment
Advisory Agreement dated October 1, 1994 (hereinafter referred to as the
"Advisory Agreement").
Under the Advisory Agreement, the Investment Adviser has agreed to
provide to the Funds the investment advisory services described in the Funds'
Prospectuses. For the services provided and expenses assumed pursuant to the
Advisory Agreement, the Investment Adviser is entitled to receive a fee from
each of the Funds, computed daily and paid monthly, based on the lower of (1)
such fee as may, from time to time, be agreed upon in writing by the Funds and
the Investment Adviser or (2) the average daily net assets of each such Fund as
follows: the U.S. Treasury Fund and the Cash Management Fund - forty
one-hundredths of one percent (0.40%) annually; the Equity Fund and the
Aggressive Growth Fund and the Growth Equity Fund - sixty-nine one-hundredths of
one percent (0.69%) annually; the Balanced Fund - seventy-four one-hundredths of
one percent (0.74%) annually; the Bond Fund, the Intermediate Bond Fund, the
Intermediate Tax-Free Bond Fund and the Short-Term Income Fund - fifty-five
one-hundredths of one percent (0.55%) annually.
Sub-investment advisory services are provided to the Cash Management
Fund by AMR Investment Services, Inc. ("Sub-Advisor" or "AMR") pursuant to a
Sub-Investment Advisory
B-22
<PAGE> 139
Agreement between BOK and AMR dated June 16, 1997 (hereinafter referred to as
the "Sub-Advisory Agreement"). For the services provided and the expenses
assumed pursuant to the Sub-Advisory Agreement, AMR is entitled to receive a fee
from BOK, computed daily and paid monthly, at the annual rate of not less than
fifteen one-hundredths of one percent (0.15%) nor more than forty one-hundredths
of one percent (0.40%) of the average daily net assets of the Cash Management
Fund.
For its investment advisory services during the fiscal year ending
August 31, 1997, BOK received $984,884 with respect to the U.S. Treasury Fund;
$1,476,099 with respect to the Cash Management Fund; $114,994, which is $65,711
less than the maximum amount of advisory fees, if charged, with respect to the
Bond Fund; $224,198, which is $128,113 less than the maximum amount of advisory
fees, if charged, with respect to the Intermediate Bond Fund; $604,087, which is
$229,553 less than the amount of advisory fees, if charged, with respect to the
Equity Fund; $95,309, which is $54,462 less than the amount of advisory fees, if
charged, with respect to the Intermediate Tax-Free Bond Fund; $225,838, which is
$85,818 less than the amount of advisory fees, if charged, with respect to the
Aggressive Growth Fund; $0, which is $80,882 less than the amount of advisory
fees, if charged, with respect to the Short-Term Income Fund; and $0, which is
$196,422 less than the amount of advisory fees, if charged, with respect to the
Balanced Fund. As of August 31, 1997, the Growth Equity Fund had not commenced
operations.
For its investment advisory services during the fiscal year ending
August 31, 1996, BOK received $801,240 with respect to the U.S. Treasury Fund;
$1,238,786 with respect to the Cash Management Fund; $129,467, which is $73,915
less than the maximum amount of advisory fees, if charged, with respect to the
Bond Fund; $227,937, which is $130,084 less than the maximum amount of such
fees, if charged, with respect to the Intermediate Bond Fund; $407,341, which is
$154,982 less than the maximum amount of such fees, if charged, with respect to
the Equity Fund; $101,273, which is $57,916 less than the maximum amount of
advisory fees, if charged, with respect to the Intermediate Tax-Free Bond Fund;
$202,594, which is $77,088 less than the maximum amount of advisory fees, if
charged, with respect to the Aggressive Growth Fund; $0, which is $65,313 less
than the maximum amount of advisory fees, if charged with respect to the
Short-Term Income Fund; and $0 which is $149,330 less than the maximum amount of
advisory fees, if charged with respect to the Balanced Fund.
For its investment advisory services during the fiscal year ended
August 31, 1995, BOK received $732,975, which is $27,001 less than the maximum
amount of advisory fees, if charged, with respect to the U.S. Treasury Fund;
$119,282 which is $66,995 less than the maximum amount of advisory fees, if
charged, with respect to the Bond Fund; $271,212 which is $152,206 less than the
maximum amount of advisory fees, if charged, with respect to the Intermediate
Bond Fund; $360,139 which is $134,698 less than the maximum amount of advisory
fees, if charged, with respect to the Equity Fund; $56,984, which is $96,109
less than the maximum amount of advisory fees, if charged, with respect to the
Intermediate Tax-Free Bond Fund; $130,408 which is $49,067 less than the maximum
amount of advisory fees, if charged, with respect to the Aggressive Growth Fund.
For investment advisory services
B-23
<PAGE> 140
during the period from October 1, 1994 to August 31, 1995, BOK received from the
Funds $799,677 which is $30,520 less than the maximum amount of advisory fees,
if charged, with respect to the Cash Management Fund. For the period from
commencement of operations, October 19, 1994, to August 31, 1995, BOK received
from the Funds $17,642 which is $39,100 less than the maximum amount of advisory
fees, if charged, with respect to the Short-Term Income Fund; and for the period
from commencement of operations, June 1, 1995, to August 31, 1995, BOK received
from the Funds $0 which is $21,992 less than the maximum amount of advisory
fees, if charged, with respect to the Balanced Fund.
For its sub-advisory services during the fiscal year ending August 31,
1997, AMR received $553,537 with respect to the Cash Management Fund.
Investment advisory services formerly were provided by AMR, jointly
with BOK, to the U.S. Treasury Fund and by AMR solely to the Cash Management
Fund pursuant to an Investment Advisory Agreement dated September 5, 1990. AMR
ceased providing investment advisory services to the U.S. Treasury Fund and the
Cash Management Fund on September 30, 1994. For services provided and expenses
assumed under the AMR Investment Advisory Agreement, the U.S. Treasury Fund and
the Cash Management Fund paid AMR a fee, computed daily and paid monthly, based
on the lower of (1) such fee as was, from time to time, agreed upon in writing
by the Funds and AMR or (2) the average daily net assets of the respective
Funds, as follows: the Cash Management Fund - forty one-hundredths of one
percent (0.40%) annually and the U.S. Treasury Fund - twenty one-hundredths of
one percent (0.20%) annually.
For investment advisory services during the period from September 1,
1994 to September 30, 1994, at which time the Investment Advisory Agreement
terminated, AMR received $13,468 with respect to the U.S. Treasury Fund and
$29,578 with respect to the Cash Management Fund. For Sub-Advisory services
during the period from October 1, 1994 to August 31, 1995, AMR received from BOK
$281,081 with respect to the Cash Management Fund.
The Investment Adviser may periodically set its fees at less than the
maximum allowable amount with respect to any Fund it serves in order to increase
the net income of that Fund available for distribution as dividends. For
information on such voluntary reductions undertaken for the period ended August
31, 1997, concerning a particular Fund, see "MANAGEMENT OF THE FUND --
Investment Adviser" in the Prospectus pertaining to such Fund.
Unless sooner terminated, the Advisory Agreement will continue in
effect until August 1, 1998. The Advisory Agreement will continue in effect as
to a particular Fund for successive one-year terms after the aforementioned
date, if such continuance is approved at least annually by the Funds' Board of
Trustees or by vote of a majority of the outstanding voting Shares of such Fund
(as defined under "GENERAL INFORMATION--Miscellaneous"
B-24
<PAGE> 141
in the Funds' Prospectuses), and a majority of the Trustees who are not parties
to the Advisory Agreement, or interested persons (as defined in 1940 Act) of any
party to the Advisory Agreement by votes cast in person at a meeting called for
such purpose.
The Sub-Advisory Agreement between BOK and AMR provides that unless
sooner terminated, it will continue in effect until August 1, 1998 and for
successive one-year terms thereafter, provided that such continuance is approved
annually in the manner set forth above. The Advisory and Sub-Advisory Agreements
are terminable as to a particular Fund at any time on 60 days' written notice
without penalty by the Trustees, by vote of a majority of the outstanding voting
Shares of that Fund, or by the Investment Adviser or the Sub-Adviser, as the
case may be. The Advisory and Sub-Advisory Agreements also terminate
automatically in the event of any assignment, as defined in the 1940 Act.
The Advisory and Sub-Advisory Agreements provide that the Investment
Adviser or the Sub-Adviser, as the case may be, shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of the respective Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith, or gross negligence on the part of the respective provider of services to
the Funds in the performance of its duties, or from reckless disregard by it of
its duties and obligations thereunder.
From time to time, advertisements, supplemental sales literature and
information furnished to present or prospective shareholders of the Funds may
include descriptions of the Investment Adviser or Sub-Adviser including, but not
limited to, (i) descriptions of the adviser's operations; (ii) descriptions of
certain personnel and their functions; and (iii) statistics and rankings related
to the adviser's operations.
DISTRIBUTION
------------
Shares of the Funds are sold on a continuous basis by the Distributor
for the Funds. Under the Funds' Amended and Restated Distribution and
Shareholder Services Plan (the "Distribution Plan"), each of the Funds will pay
a monthly distribution fee to the Distributor as compensation for its services
in connection with the Distribution Plan at an annual rate equal to twenty-five
one hundredths of one percent (0.25%) of its average daily net assets. The
Distributor may use the distribution fee to provide distribution assistance with
respect to the Funds' Shares or to provide Shareholder services to the holders
of the Funds' Shares. The Distributor may also use the distribution fee (i) to
pay financial institutions and intermediaries (such as insurance companies, and
investment counselors, but not including banks), broker-dealers, and the
Distributor's affiliates and subsidiaries compensation for services or
reimbursement of expenses incurred in connection with distribution assistance or
(ii) to pay banks, other financial institutions and intermediaries,
broker-dealers, and the Distributor's affiliates and subsidiaries compensation
for services or reimbursement of expenses incurred in connection with the
provision of Shareholder services. All payments by the Distributor for
distribution assistance or Shareholder services under the Distribution Plan will
be made pursuant to an agreement between the Distributor and such bank, other
financial institution or
B-25
<PAGE> 142
intermediary, broker-dealer, or affiliate or subsidiary of the Distributor (a
"Servicing Agreement"; banks, other financial institutions and intermediaries,
broker-dealers, and the Distributor's affiliates and subsidiaries which may
enter into a Servicing Agreement are hereinafter referred to individually as a
"Participating Organization"). A Servicing Agreement will relate to the
provision of distribution assistance in connection with the distribution of the
Funds' Shares to the Participating Organization's customers on whose behalf the
investment in such Shares is made and/or to the provision of Shareholder
services rendered to the Participating Organization's customers owning the
Funds' Shares. Under the Distribution Plan, a Participating Organization may
include the Funds' Advisers or their affiliates. A Servicing Agreement entered
into with a bank (or any of its subsidiaries or affiliates) will contain a
representation that the bank (or subsidiary or affiliate) believes that it
possesses the legal authority to perform the services contemplated by the
Servicing Agreement without violation of applicable banking laws (including the
Glass-Steagall Act).
The distribution fee will be payable without regard to whether the
amount of the fee is more or less than the actual expenses incurred in a
particular year by the Distributor in connection with distribution assistance or
Shareholder services rendered by the Distributor itself or incurred by the
Distributor pursuant to the Servicing Agreements entered into under the
Distribution Plan. If the amount of the distribution fee is greater than the
Distributor's actual expenses incurred in a particular year (and the Distributor
does not waive that portion of the distribution fee), the Distributor will
realize a profit in that year from the distribution fee. If the amount of the
distribution fee is less than the Distributor's actual expenses incurred in a
particular year, the Distributor will realize a loss in that year under the
Distribution Plan and will not recover from the Funds the excess of expenses for
the year over the distribution fee, unless actual expenses incurred in a later
year in which the Distribution Plan remains in effect were less than the
distribution fee paid in that later year. The Distributor may periodically waive
all or a portion of the distribution fee to increase the net income attributable
to a Fund available for distribution as dividends to the Fund's Shareholders. To
lower operating expenses, the Distributor may voluntarily reduce its fees under
the Distribution Plan. For information on such voluntary reductions concerning
a particular fund, see "DISTRIBUTION" in the Prospectus pertaining to such Fund.
Under the Distribution Plan during the fiscal year ended August 31,
1997, the Distributor received the maximum amount receivable under the Plan with
respect to the following Funds and in the following amounts: $82,138 with
respect to the Bond Fund; $160,141 with respect to the Intermediate Bond Fund;
$302,044 with respect to the Equity Fund; and $112,919 with respect to the
Aggressive Growth Fund. Under the distribution Plan during the fiscal year ended
August 31, 1997, the Distributor waived its entire fee with respect to the
following Funds and in the following amounts: $615,553 with respect to the U.S.
Treasury Fund; $922,562 with respect to the Cash Management Fund; $68,078 with
respect to the Intermediate Tax-Free Bond Fund; $66,359 with respect to the
Balanced Fund; and $36,765 with respect to the Short-Term Income Fund. As of
August 31, 1997 the Growth Equity Fund had not commenced operations.
B-26
<PAGE> 143
Substantially all of the amount received by the Distributor under the
Distribution Plan during the last fiscal year, the period from September 1, 1996
to August 31, 1997, was spent on compensation to dealers. BISYS retained 1.14%
and spent this amount on printing and mailing of prospectuses. The total amount
spent on compensation to dealers during the last fiscal year was $649,926. The
total amount retained by BISYS during the last fiscal year was $7,517.
GLASS-STEAGALL ACT
- ------------------
In 1971 the United States Supreme Court held in Investment Company
Institute v. Camp that the federal statute commonly referred to as the
Glass-Steagall Act prohibits a national bank from operating a fund for the
collective investment of managing agency accounts. Subsequently, the Board of
Governors of the Federal Reserve System (the "Board") issued a regulation and
interpretation to the effect that the Glass-Steagall Act and such decision: (a)
forbid a bank holding company registered under the Federal Bank Holding Company
Act of 1956 (the "Holding Company Act") or any non-bank affiliate thereof from
sponsoring, organizing, or exerting control of a registered, open-end investment
company continuously engaged in the issuance of its shares, but (b) do not
prohibit such a holding company or affiliate from acting as Investment Adviser,
transfer agent, and custodian to such an investment company. In 1981, the United
States Supreme Court held in Board of Governors of the Federal Reserve System v.
Investment Company Institute that the Board did not exceed its authority under
the Holding Company Act when it adopted its regulation and interpretation
authorizing bank holding companies and their non-bank affiliates to act as
investment advisers to registered closed-end investment companies. In the Board
of Governors case, the Supreme Court also stated that if a national bank
complied with the restrictions imposed by the Board in its regulation and
interpretation authorizing bank holding companies and their non-bank affiliates
to act as investment advisers to investment companies, a national bank
performing investment advisory services for an investment company would not
violate the Glass-Steagall Act.
BOK believes that it possesses the legal authority to perform the
investment advisory services that are contemplated by its Investment Advisory
Agreement with the Funds and described in the Prospectuses and this Statement of
Additional Information without violation of the Glass-Steagall Act. Future
changes in either federal or state statutes and regulations relating to the
permissible activities of banks or bank holding companies and the subsidiaries
or affiliates of those entities, as well as further judicial or administrative
decisions or interpretations of present and future statutes and regulations,
could prevent or restrict BOK, from continuing to perform such services for the
Funds. Depending upon the nature of any changes in the services which could be
provided by BOK, the Board of Trustees of the Funds would review the Funds'
relationship with BOK, and consider taking all action necessary in the
circumstances.
Should future legislative, judicial, or administrative action prohibit
or restrict the proposed activities of BOK, or other banks serving as
Participating Organizations under the Funds' Distribution and Shareholder
Services Plan, in connection with Customer purchases of
B-27
<PAGE> 144
Shares of the Funds, such banks may be required to alter materially or
discontinue the services offered by them to Customers under the Distribution and
Shareholder Services Plan. It is not anticipated, however, that any change in
the Funds' Distribution and Shareholder Services Plan would affect its net asset
value per Share or result in financial losses to any Customer.
PORTFOLIO TRANSACTIONS
- ----------------------
Pursuant to the Advisory and Sub-Advisory Agreements, subject to the
general supervision of the Board of Trustees of the Funds and in accordance with
each Fund's investment objective, policies and restrictions, which securities
are to be purchased and sold by each such Fund and which brokers are to be
eligible to execute its portfolio transactions. Purchases and sales of portfolio
securities with respect to the Money Market Funds and the Bond Investment Funds
usually are principal transactions in which portfolio securities are purchased
directly from the issuer or from an underwriter or market maker for the
securities. Purchases from underwriters of portfolio securities include a
commission or concession paid by the issuer to the underwriter and purchases
from dealers serving as market makers may include the spread between the bid and
asked price. Transactions with respect to the Equity Investment Funds on stock
exchanges (other than certain foreign stock exchanges) involve the payment of
negotiated brokerage commissions. Transactions in the over-the-counter market
are generally principal transactions with dealers. With respect to the
over-the-counter market, the Funds, where possible, will deal directly with the
dealers who make a market in the securities involved except in those
circumstances where better price and execution are available elsewhere. While
the Investment Adviser and Sub-Adviser generally seek competitive spreads or
commissions, the Funds may not necessarily pay the lowest spread or commission
available on each transaction, for reasons discussed below.
During the fiscal year ended August 31, 1997, the Equity Fund paid
aggregate brokerage commissions in the amount of $212,467; the Aggressive Growth
Fund paid aggregate brokerage commissions in the amount of $37,432; and the
Balanced Fund paid aggregate brokerage commissions in the amount of $26,379.
During the fiscal year ended August 31, 1996, the Equity Fund paid
aggregate brokerage commissions in the amount of $106,593. During the fiscal
year ended August 31, 1996, BOK directed brokerage transactions for the Equity
Fund to brokers because of research services provided in the following amounts:
aggregate transactions -- $90,918; aggregate commissions -- $48,969. During the
fiscal year ended August 31, 1996, the Aggressive Growth Fund paid aggregate
brokerage commissions in the amount of $20,047. During the fiscal year ended
August 31, 1996, BOK directed brokerage transactions for the Aggressive Growth
Fund to brokers because of research services provided in the following amounts:
aggregate transactions -- $20,047; aggregate commissions -- $0. During the
fiscal year ended August 31, 1996 the Balanced Fund paid aggregate brokerage
commissions in the amount of $25,340. BOK directed brokerage transactions for
the Balanced Fund to brokers because of research services provided in the
following amounts: aggregate transactions -- $19,722 and aggregate commissions
- -- $5,618.
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<PAGE> 145
During the fiscal year ended August 31, 1995, the Equity Fund paid
aggregate brokerage commissions in the amount of $159,829. During the fiscal
year ended August 31, 1995, BOK directed brokerage transactions for the Equity
Fund to brokers because of research services provided in the following amounts:
aggregate transactions -- $158,700,000; aggregate commissions -- $159,069.
During the fiscal year ended August 31, 1995, the Aggressive Growth Fund paid
aggregate brokerage commissions in the amount of $10,768. During the fiscal year
ended August 31, 1995, BOK directed brokerage transactions for the Aggressive
Growth Fund to brokers because of research services provided in the following
amounts: aggregate transactions -- $14,600,000; aggregate commissions --
$10,648. For the period June 1, 1995 to August 31, 1995, the Balanced Fund paid
aggregate brokerage commissions in the amount of $9,818.
Allocation of transactions, including their frequency, to various
dealers is determined by the Investment Adviser and/or Sub-Adviser with respect
to the Funds it serves based on its best judgment and in a manner deemed fair
and reasonable to Shareholders. The primary consideration is prompt execution of
orders in an effective manner at the most favorable price. Subject to this
consideration, dealers who provide supplemental investment research to the
Investment Adviser and Sub-Adviser may receive orders for transactions by the
Funds. Information so received is in addition to and not in lieu of services
required to be performed by the Investment Adviser and Sub-Adviser and does not
reduce the advisory fees payable to the Investment Adviser and Sub-Adviser. Such
information may be useful to the Investment Adviser and Sub-Adviser in serving
both the Funds and other clients and, conversely, supplemental information
obtained by the placement of business of other clients may be useful to such
adviser in carrying out its obligations to the Funds.
The Funds will not execute portfolio transactions through, acquire
portfolio securities issued by, make savings deposits in, or enter into
repurchase or reverse repurchase agreements with the Investment Adviser or
Sub-Adviser, its Distributor, or their affiliates except as may be permitted
under the 1940 Act, and will not give preference to correspondents of an
Investment Adviser with respect to such transactions, securities, savings
deposits, repurchase agreements, and reverse repurchase agreements.
Investment decisions for each Fund are made independently from those
for the other Funds or any other investment company or account managed by the
Investment Adviser and Sub-Adviser. Any such other investment company or account
may also invest in the same securities as the Funds. When a purchase or sale of
the same security is made at substantially the same time on behalf of a given
Fund and another Fund, investment company or account, the transaction will be
averaged as to price, and available investments allocated as to amount, in a
manner which the Investment Adviser or Sub-Adviser believes to be equitable to
the Fund(s) and such other investment company or account. In some instances,
this investment procedure may adversely affect the price paid or received by a
Fund or the size of the position obtained by a Fund. To the extent permitted by
law, the Investment Adviser or Sub-Adviser may aggregate the securities to be
sold or purchased by it for a Fund with those to be sold or purchased by it for
other Funds or for other investment companies or accounts in order to obtain
best execution. As provided by Investment Advisory and Sub-Advisory Agreements,
in
B-29
<PAGE> 146
making investment recommendations for the Funds, the Investment Adviser or
Sub-Adviser will not inquire or take into consideration whether an issuer of
securities proposed for purchase or sale by the Funds is a customer of the
Investment Adviser or Sub-Adviser or their respective parents or subsidiaries or
affiliates unless legally required to do so and, in dealing with its commercial
customers, the Investment Adviser or Sub-Adviser and their respective parents,
subsidiaries, and affiliates will not inquire or take into consideration whether
securities of such customers are held by the Funds.
ADMINISTRATOR
- -------------
BISYS Fund Services ("BISYS") serves as general manager and
administrator (the "Administrator") to each Fund pursuant to the Management and
Administration Agreement with the Funds dated September 5, 1990, as amended and
restated on August 30, 1994 (hereinafter referred to as the "Administration
Agreement"). The Administrator assists in supervising all operations of each
Fund (other than those performed under the Investment Advisory, Sub-Advisory,
Custodian, Fund Accounting, and Transfer Agency Agreements for that Fund). The
Administrator is a broker-dealer registered with the SEC and is a member of the
National Association of Securities Dealers, Inc.
Under the Administration Agreement, the Administrator has agreed to
price the portfolio securities of each Fund and to compute the net asset value
and net income of those Funds on a daily basis, to maintain office facilities
for the Funds, to maintain the Funds' financial accounts and records, and to
furnish the Funds statistical and research data, data processing, clerical,
accounting, and bookkeeping services, and certain other services required by the
Funds with respect to the Funds. The Administrator prepares annual and
semi-annual reports to the SEC, prepares federal and state tax returns, prepares
filings with state securities commissions, and generally assists in all aspects
of the Funds' operations other than those performed under the Investment
Advisory, Sub-Advisory, Custodian, Fund Accounting, and Transfer Agency
Agreements. Under the Administration Agreement, the Administrator may delegate
all or any part of its responsibilities thereunder.
The Administrator receives a fee from each Fund for its services
provided and expenses assumed pursuant to the Administration Agreement,
calculated daily and paid monthly, at the annual rate of twenty one hundredths
of one percent (0.20%) of each Fund's average daily net assets. The
Administrator may periodically set its fees at less than the maximum allowable
amount with respect to any Fund in order to increase the net income of one or
more of the Funds available for distribution as dividends. For information on
such voluntary reductions undertaken concerning a particular fund, see
"MANAGEMENT OF THE FUND--Administrator, and Distributor" in the Prospectus
pertaining to such Fund.
For management and administrative services during the fiscal year ended
August 31, 1997, BISYS received $492,442 with respect to the U.S. Treasury Fund;
$738,049 with respect to the Cash Management Fund; $65,711 with respect to the
Bond Fund; $128,113
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<PAGE> 147
with respect to the Intermediate Bond Fund; $54,462 with respect to the
Intermediate Tax-Free Bond Fund; $241,635 with respect to the Equity Fund;
$90,335 with respect to the Aggressive Growth Fund; $29,412 with respect to the
Short-Term Income Fund; and $53,087 with respect to the Balanced Fund. As of
August 31, 1997, the Growth Equity Fund had not commenced operations.
For management and administration services during the fiscal year ended
August 31, 1996, BISYS received $400,620 with respect to the U.S. Treasury Fund;
$664,393 with respect to the Cash Management Fund; $73,981 with respect to the
Bond Fund; $130,250 with respect to the Intermediate Bond Fund; $57,869 with
respect to the Intermediate Tax-Free Bond Fund; $162,936 with respect to the
Equity Fund; $81,038 with respect to the Aggressive Growth Fund; $23,727 with
respect to the Short-Term Income Fund; and $40,306 with respect to the Balanced
Fund.
For management and administration services during the fiscal year ended
August 31, 1995, BISYS received $379,988 with respect to the U.S. Treasury Fund;
$415,071 with respect to the Cash Management Fund; $67,742 with respect to the
Bond Fund; $154,024 with respect to the Intermediate Bond Fund; $17,180 with
respect to the Intermediate Tax-Free Bond Fund, which represents a waiver of
$38,490; $143,476 with respect to the Equity Fund; and $51,949 with respect to
the Aggressive Growth Fund. For the period from commencement of operations,
October 19, 1994, to August 31, 1995, BISYS received $10,031 which represents a
waiver of $10,603 with respect to the Short-Term Income Fund, and for the period
from commencement of operations, June 1, 1995, to August 31, 1995, BISYS
received $5,873 with respect to the Balanced Fund.
Unless sooner terminated, the Administration Agreement will continue in
effect until December 31, 1998 and thereafter will automatically continue in
effect for successive three-year periods unless written notice not to renew is
given by the non-renewing party at least sixty days prior to the expiration of
the then-current term. Otherwise, the Administration Agreement is terminable,
with respect to a particular Fund only upon mutual agreement or for "cause" in
either case on not less than sixty days' notice by the Funds' Board of Trustees
or by the Administrator. For purposes of the Administration Agreement, "cause"
means (i) willful misfeasance, bad faith, gross negligence, abandonment, or
reckless disregard on the part of either party with respect to its obligations
and duties set forth herein; (ii) regulatory, administrative, or judicial action
initiated against either party with regard to the violation of any rule,
regulation, order, or law; (iii) the dissolution or liquidation of either party
or other cessation of business other than a reorganization or recapitalization
of such party as an ongoing business; (iv) financial difficulties on the part of
either party which is evidenced by the authorization or commencement of, or
involvement by way of pleading, answer, consent, or acquiescence in, a voluntary
or involuntary case under Title 11 of the United States Code, as, from time to
time, in effect, or any applicable law, other than said Title 11, of any
jurisdiction relating to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors; or (v) any circumstance
which substantially impairs the performance of either party's obligations and
duties as contemplated herein.
B-31
<PAGE> 148
The Administration Agreement provides that the Administrator shall not
be liable for any error of judgment or mistake of law or any loss suffered by
the Funds in connection with the matters to which the Agreement relates, except
a loss resulting from willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or from the reckless disregard by it of its
obligations and duties thereunder.
SUB-ADMINISTRATOR
- -----------------
Effective May 12, 1995, BOK became the Sub-Administrator to the Funds
pursuant to an agreement between the Administrator and BOK. Pursuant to this
agreement, BOK assumed many of the Administrator's duties, for which BOK
receives a fee, paid by the Administrator, calculated at an annual rate of five
one-hundredths of one percent (0.05%) of each Fund's average net assets.
For Sub-Administration services during the fiscal year ended August 31,
1997, BOK received fees in the following amounts from the Administrator:
$123,111 with respect to the U.S. Treasury Fund; $184,512 with respect to the
Cash Management Fund; $16,428 with respect to the Bond Fund; $32,028 with
respect to the Intermediate Bond Fund; $13,616 with respect to the Intermediate
Tax-Free Bond Fund; $7,353 with respect to the Short-Term Income Fund; $13,272
with respect to the Balanced Fund; $60,409 with respect to the Equity Fund; and
$22,584 with respect to the Aggressive Growth Fund. As of August 31, 1997, the
Growth Equity Fund had not commenced operations.
For Sub-Administration services during the fiscal year ended August 31,
1996, BOK received fees in the following amounts from the Administrator:
$100,155 with respect to the U.S. Treasury Fund; $166,098 with respect to the
Cash Management Fund; $18,495 with respect to the Bond Fund; $32,563 with
respect to the Intermediate Bond Fund; $14,468 with respect to the Intermediate
Tax-Free Bond Fund; $5,932 with respect to the Short-Term Income Fund; $9,970
with respect to the Balanced Fund; $40,734 with respect to the Equity Fund; and
$20,259 with respect to the Aggressive Growth Fund.
For Sub-Administration services during the period from May 12, 1995 to
August 31, 1995 BOK received fees in the following amounts from the
Administrator: $33,272 with respect to the U.S. Treasury Fund; $33,645 with
respect to the Cash Management Fund; $4,429 with respect to the Bond Fund;
$9,680 with respect to the Intermediate Bond Fund; $3,594 with respect to the
Intermediate Tax-Free Bond Fund; $9,488 with respect to the Equity Fund; $4,200
with respect to the Aggressive Growth Fund; and $1,589 with respect to the
Short-Term Income Fund. For the period from commencement of operations, June 1,
1995 to August 31, 1995, BOK received $1,241 with respect to the Balanced Fund.
DISTRIBUTOR
- -----------
BISYS serves as distributor to each of the Funds pursuant to its
Distribution Agreement with the Funds dated October 1, 1993 (the "Distribution
Agreement"). Unless otherwise terminated, the Distribution Agreement will
continue in effect until August 1, 1998 and
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<PAGE> 149
thereafter will continue for successive one-year periods if approved at least
annually (i) by the Funds' Board of Trustees or by the vote of a majority of the
outstanding voting Shares of the Funds (as defined in "GENERAL
INFORMATION--Miscellaneous" in the Funds' Prospectuses) that are parties to the
Distribution Agreement, and (ii) by the vote of a majority of the Trustees of
the Funds who are not parties to the Distribution Agreement or interested
persons (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval. The Agreement may be
terminated in the event of its assignment, as defined in the 1940 Act.
The Distribution Agreement is the successor to the previous
distribution agreement, which terminated automatically by its terms upon
consummation of the acquisition of BISYS by The BISYS Group, Inc. The
Distribution Agreement was unanimously approved by the Board of Trustees of the
Funds and is materially identical to the terminated distribution agreement.
CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTANT
- ---------------------------------------------
Cash and securities owned by each of the Funds are held by BOK as
custodian. Under the Custodian Agreement BOK (i) maintains a separate account or
accounts in the name of each Fund; (ii) makes receipts and disbursements of
money on behalf of each Fund; (iii) collects and receives all income and other
payments and distributions on account of the Funds' portfolio securities; (iv)
responds to correspondence from security brokers and others relating to its
duties; and (v) makes periodic reports to the Funds' Board of Trustees
concerning the Funds' operations. BOK may, at its own expense, open and maintain
a sub-custody account or accounts on behalf of the Funds, provided that it shall
remain liable for the performance of all of its duties under the Custodian
Agreement.
Under the Custodian Agreement, the Funds have agreed to pay BOK a
custodian fee with respect to each Fund at an annual rate of three one
hundredths of one percent (0.03%) of such Fund's average daily net assets. BOK
is also entitled to be reimbursed by the Funds for its reasonable out-of-pocket
expenses incurred in the performance of its duties under the Custodian
Agreement. BOK may periodically set its custodian fees at less than the maximum
allowable amount with respect to a Fund to increase the Fund's net income
available for distribution as dividends.
For custodian services during the fiscal year ended August 31, 1997,
BOK received $73,866 with respect to the U.S. Treasury Fund; $110,707 with
respect to the Cash Management Fund; $9,856 with respect to the Bond Fund;
$19,217 with respect to the Intermediate Bond Fund; $36,245 with respect to the
Equity Fund; $8,169 with respect to the Intermediate Tax-Free Bond Fund; and
$13,550 with respect to the Aggressive Growth Fund. For custodian services
during the fiscal year ended August 31, 1997, BOK waived its entire fee of
$4,412 with respect to the Short-Term Income Fund and waived its entire fee of
$7,963 with respect to the Balanced Fund. As of August 31, 1997, the Growth
Equity Fund had not commenced operations.
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<PAGE> 150
BISYS Fund Services Ohio, Inc. serves as transfer agent to each of the
Funds pursuant to a Transfer Agency Agreement with the Funds dated September 5,
1990. While BISYS Fund Services Ohio, Inc. is a distinct legal entity from BISYS
Fund Services (each Fund's Administrator and Distributor), BISYS Fund Services
Ohio, Inc. is considered to be an affiliated person of BISYS Fund Services under
the 1940 Act due to, among other things, the fact that BISYS Fund Services Ohio,
Inc. is owned by substantially the same persons that directly or indirectly own
BISYS Fund Services. Under the Transfer Agency Agreement, BISYS Fund Services
Ohio, Inc. has agreed: (i) to issue and redeem Shares of the Funds; (ii) to
address and mail all communications by the Funds to its Shareholders, including
reports to Shareholders, dividend and distribution notices, and proxy material
for its meetings of Shareholders; (iii) to respond to correspondence or
inquiries by Shareholders and others relating to its duties; (iv) to maintain
Shareholder accounts and certain sub-accounts; and (v) to make periodic reports
to the Funds' Board of Trustees concerning the Funds' operations.
Under the Transfer Agency Agreement, the Funds have agreed to pay BISYS
Fund Services Ohio, Inc. with respect to each Fund an annual minimum fee of
$10,000 for less than 100 Shareholder accounts invested in a Fund, $18,000 for
100 to 499 Shareholder accounts invested in a Fund, $24,000 for 500 or more
Shareholder accounts invested in a Fund, $16 for each additional Shareholder
account invested in a Money Market Fund, and $14 for each additional Shareholder
account invested in a non-daily dividend based fund. (The number of Shareholder
accounts for purposes of determining the base fee is calculated on a monthly
basis.) BISYS Fund Services Ohio, Inc. is also entitled to be reimbursed by the
Funds for postage, handling fees, and reasonable costs of supplies used by BISYS
Fund Services Ohio, Inc. in the performance of its services under the Transfer
Agency Agreement. BISYS Fund Services Ohio, Inc. may periodically set its
transfer agency fees at less than the maximum allowable amount with respect to a
Fund to increase the Fund's net income available for distribution as dividends.
BISYS Fund Services Ohio, Inc. serves as fund accountant for each Fund
pursuant to a fund accounting agreement with the Funds dated September 5, 1990
(the "Fund Accounting Agreement"). As fund accountant for the Funds, BISYS Fund
Services Ohio, Inc. prices the Funds' Shares, calculates the Funds' net asset
value, and maintains the general ledger accounting records for each Fund. Under
its Fund Accounting Agreement with the Funds, BISYS Fund Services Ohio, Inc. is
entitled to receive a fee (1) from each Fund (other than the Intermediate
Tax-Free Bond Fund) at an annual rate of three one-hundredths of one percent
(0.03%) of the Fund's average daily net assets plus out-of-pocket expenses, with
a minimum monthly fee of $2,500 per Fund and (2) from the Intermediate Tax-Free
Bond Fund at an annual rate of four one-hundredths of one percent (0.04%) of the
Fund's average daily net assets, plus out-of-pocket expenses, with a minimum
monthly fee of $3,500. BISYS Fund Services Ohio, Inc. may periodically set its
fund accounting fees at less than the maximum allowable amount with respect to a
Fund in order to increase the Fund's net income available for distribution as
dividends.
For transfer agency and Fund accounting services during the fiscal year
ended August 31, 1997, BISYS Fund Services Ohio, Inc. received $115,900 with
respect to the
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<PAGE> 151
U.S. Treasury Fund; $164,177 with respect to the Cash Management Fund; $24,166
with respect to the Bond Fund; $45,971 with respect to the Intermediate Bond
Fund; $69,023 with respect to the Equity Fund; $29,602 with respect to the
Intermediate Tax-Free Bond Fund; $32,147 with respect to Aggressive Growth Fund;
$10,419 with respect to the Short-Term Income Fund; and $21,229 with respect to
the Balanced Fund. As of August 31, 1997, the Growth Equity Fund had not
commenced operations.
AUDITORS
- --------
KPMG Peat Marwick LLP, Two Nationwide Plaza, Columbus, Ohio, 43215,
serves as independent public accountants for the Funds.
LEGAL COUNSEL
- -------------
Ropes & Gray, Suite 800 East, One Franklin Square, 1301 K Street, N.W.,
Washington, D.C. 20005 are counsel to the Funds.
ADDITIONAL INFORMATION
DESCRIPTION OF SHARES
- ---------------------
The Funds are separate series of a single Massachusetts business trust
which was organized on October 1, 1987 and began active operations in August of
1990. The Declaration of Trust was filed with the Secretary of State of the
Commonwealth of Massachusetts on October 2, 1987 and authorizes the Board of
Trustees to issue an unlimited number of Shares, which are units of beneficial
interest, with par value of $0.00001. The Funds currently comprise ten series of
Shares which represent interests in the U.S. Treasury Fund, the Cash Management
Fund, the Bond Fund, the Intermediate Bond Fund, the Intermediate Tax-Free Bond
Fund, the Equity Fund, the Aggressive Growth Fund, the Short-Term Income Fund,
the Balanced Fund and the Growth Equity Fund. The Declaration of Trust
authorizes the Board of Trustees to divide or redivide any unissued Shares of
the Funds into one or more additional series by setting or changing in any one
or more respects their respective preferences, conversion or other rights,
voting power, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption.
Shares have no subscription or preemptive rights and only such
conversion or exchange rights as the Board may grant in its discretion. When
issued for payment as described in the Prospectuses and this Statement of
Additional Information, the Funds' Shares will be fully paid and non-assessable.
In the event of a liquidation or dissolution of the Funds, Shares of a Fund are
entitled to receive the assets available for distribution belonging to the Fund,
and a
B-35
<PAGE> 152
proportionate distribution, based upon the relative asset values of the
respective Funds, of any general assets not belonging to any particular Fund
which are available for distribution.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Funds shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding Shares of
each Fund affected by the matter. For purposes of determining whether the
approval of a majority of the outstanding Shares of a Fund will be required in
connection with a matter, a Fund will be deemed to be affected by a matter
unless it is clear that the interests of each Fund in the matter are identical
(in which case the Shareholders of the Funds will vote in the aggregate), or
that the matter does not affect any interest of the Fund (in which case no vote
by the Shareholders of the Fund in question will be required). Under Rule 18f-2,
the approval of an investment advisory agreement or any change in investment
policy would be effectively acted upon with respect to a Fund only if approved
by a majority of the outstanding Shares of such Fund. However, Rule 18f-2 also
provides that the ratification of independent public accountants, the approval
of principal underwriting contracts, and the election of Trustees may be
effectively acted upon by Shareholders of the Funds voting without regard to
series.
SHAREHOLDER AND TRUSTEE LIABILITY
- ---------------------------------
Under Massachusetts law, holders of units of beneficial interest in a
business trust may, under certain circumstances, be held personally liable as
partners for the obligations of the trust. However, the Declaration of Trust
provides that Shareholders shall not be subject to any personal liability for
the obligations of the Funds, and that every written agreement, obligation,
instrument, or undertaking made by the Funds shall contain a provision to the
effect that the Shareholders are not personally liable thereunder. The
Declaration of Trust provides for indemnification out of the trust property of
any Shareholder held personally liable solely by reason of his being or having
been a Shareholder. The Declaration of Trust also provides that the Funds shall,
upon request, assume the defense of any claim made against any Shareholder for
any act or obligation of the Funds, and shall satisfy any judgment thereon.
Thus, the risk of a Shareholder incurring financial loss on account of
Shareholder liability is limited to circumstances in which the Funds themselves
would be unable to meet their obligations.
The Declaration of Trust states further that no Trustee, officer, or
agent of the Funds shall be personally liable in connection with the
administration or preservation of the assets of the trust or the conduct of the
Funds' business; nor shall any Trustee, officer, or agent be personally liable
to any person for any action or failure to act except for his own bad faith,
willful misfeasance, gross negligence, or reckless disregard of his duties. The
Declaration of Trust also provides that all persons having any claim against the
Trustees or the Funds shall look solely to the assets of the trust for payment.
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<PAGE> 153
CALCULATION OF PERFORMANCE DATA
- -------------------------------
Based on the seven-day period ended August 31, 1997 (the "base
period"), the yield of the Cash Management Fund was 5.07% and the Fund's
effective yield was 5.20%. Based on the same base period, the yield of the U.S.
Treasury Fund was 4.85% and the Fund's effective yield was 4.97%. Each Money
Market Fund's seven-day yield is computed by determining the percentage net
change, excluding capital changes, in the value of an investment in one share of
the Fund over the base period, and multiplying the net change by 365/7 (or
approximately 52 weeks). Each Money Market Fund's effective yield represents a
compounding of the yield by adding 1 to the number representing the percentage
change in value of the investment during the base period, raising that sum to a
power equal to 365/7, and subtracting 1 from the result.
Based on the thirty-day period ended August 31, 1997 ("30-day base
period"), the 30-day yields of the Bond Investment Funds were as follows: the
Bond Fund, 6.26% (without load) and 6.00% (with load); the Intermediate Bond
Fund, 5.81% (without load) and 5.63% (with load); and the Intermediate Tax-Free
Bond Fund, 4.18% (without load) and 4.06% (with load); the Short-Term Income
Fund, 6.21% (without load) and 6.08% (with load). The 30-day yield of each Bond
Investment Fund is calculated by dividing the net investment income per-share
earned during the 30-day base period by the maximum offering price per share on
the last day of the period, according to the following formula:
6
30-Day Yield = 2[(a-b +1) -1]
---
cd
In the above formula, "a" represents dividends and interest earned
during the 30-day base period; "b" represents expenses accrued for the 30-day
base period (net of reimbursements); "c" represents the average daily number of
shares outstanding during the 30-day base period that were entitled to receive
dividends; and "d" represents the maximum offering price per share on the last
day of the 30-day base period.
The tax equivalent yield for the Intermediate Tax-Free Bond Fund is
computed by dividing that portion of the Intermediate Tax Free Bond Fund's yield
which is tax-exempt by one minus a stated income tax rate and adding the product
to that portion, if any, of the yield of the Fund that is not tax-exempt. The
tax-equivalent yield for the Intermediate Tax-Free Bond Fund will generally be
computed based on an assumed effective Federal income tax rate of 39.6%.
The average annual total returns for the one-year period ended August
31, 1997 for the Bond Investment Funds, assuming the imposition of a sales load,
were as follows: the Bond Fund, 5.68%; the Intermediate Bond Fund, 5.12%; the
Intermediate Tax-Free Bond Fund, 3.55%; and the Short-Term Income Fund, 5.68%.
The average annual total returns for the one-year period ended August 31, 1997
for the Equity Investment Funds, assuming the imposition of a sales load, were
as follows: the Equity Fund, 34.64%; the Aggressive Growth Fund, 11.26%; and the
Balanced Fund, 21.28%.
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<PAGE> 154
The average annual total return of each Bond Investment and Equity
Investment Fund is determined by calculating the change in the value of a
hypothetical $1,000 investment in the Fund for each of the periods shown.
Average annual total return for each Fund was computed by determining the
average annual compounded rate of return over the applicable period that would
equate the initial amount invested to the ending redeemable value of the
investment. The ending redeemable value includes dividends and capital gain
distributions reinvested at net asset value. The resulting percentages indicated
the positive or negative investment results that an investor would have
experienced from changes in Share price and reinvestment of dividends and
capital gains distributions. The total return data above are calculated assuming
the imposition of the maximum sales charge for each respective Fund.
The average annual total returns, for Shareholders who are not subject
to a sales charge, for the one-year period ended August 31, 1997 were as
follows: the Equity Fund 40.23%, the Aggressive Growth 15.90%, the Bond Fund
10.30%, the Intermediate Bond Fund 8.38%, the Intermediate Tax-Free Bond Fund
6.79%, the Short-Term Income Fund 7.85%, and the Balanced Fund 26.33%.
The average annual total returns for the five-year period ended August
31, 1997 were: 6.06% (without sales charge) and 5.19% (as adjusted for maximum
sales charge) for the Bond Fund; 5.23% (without sales charge) and 4.59% (as
adjusted for maximum sales charge) for the Intermediate Bond Fund; 19.12%
(without sales charge) and 18.15% (as adjusted for maximum sales charge) for the
Equity Fund; 6.23% (without sales charge) and 5.59% (as adjusted for maximum
sales charge) for the International Tax-Free Bond Fund and 18.11% (without sales
charge) and 17.15% (as adjusted for maximum sales charge) for the Aggressive
Growth Fund.
The average annual total returns for the following Funds are: Bond Fund
from commencement of operations (September 28, 1990) to August 31, 1997, 8.06%
(without sales charge) and 7.42% (as adjusted for maximum sales charge);
Intermediate Bond Fund from commencement of operations (September 28, 1990) to
August 31, 1997, 7.17% (without sales charge) and 6.70% (as adjusted for maximum
sales charge); and Equity Fund from commencement of operations (September 28,
1990) to August 31, 1997, 16.42% (without sales charge) and 15.73% (as adjusted
for maximum sales charge).
The average annual total returns for the following Funds are:
Aggressive Growth Fund from commencement of operations (February 3, 1992) to
August 31, 1997, 12.51% (without sales charge) and 11.68% (as adjusted for
maximum sales charge); Short-Term Income Fund from commencement of operations
(October 19, 1994) to August 31, 1997 was 6.02% (without sales charge) and 5.29%
(as adjusted for maximum sales charge); Balanced Fund from commencement of
operations (June 1, 1995) to August 31, 1997 was 19.64% (without sales charge)
and 17.48% (as adjusted for maximum sales charge); and Intermediate Tax-Free
Bond Fund from commencement of operations (May 29, 1992) to August 31, 1997,
6.53% (without sales charge) and 5.92% (as adjusted for maximum sales charge).
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<PAGE> 155
Performance will fluctuate from time to time and is not necessarily
representative of future results. Accordingly, a Fund's performance may not
provide for comparison with bank deposits or other investments that pay a fixed
return for a stated period of time. Performance is a function of a Fund's
quality, composition, and maturity, as well as expenses allocated to the Fund.
Fees imposed upon Customer accounts by Participating Organizations will reduce a
Fund's effective yield to customers.
PERFORMANCE COMPARISONS
- -----------------------
Investors may judge the performance of the Funds by comparing their
performance to the performance of other mutual funds or mutual fund portfolios
with comparable investment objectives and policies through various mutual fund
or market indices such as the Morgan Stanley Capital International EAFE Index
and those prepared by Dow Jones & Co., Inc., Standard & Poor's Corporation,
Shearson Lehman Brothers, Inc. and The Russell 2000 Index and to data prepared
by Lipper Analytical Services, Inc., a widely recognized independent service
which monitors the performance of mutual funds, Morningstar, Inc. and the
Consumer Price Index. Comparisons may also be made to indices or data published
in Donoghue's MONEY FUND REPORT of Holliston, Massachusetts 01746, a nationally
recognized money market fund reporting service, Money Magazine, Forbes, Fortune,
Ibbotson Associates, Inc., CDA/Wiesenberger, American Banker, Institutional
Investor, Barron's, The Wall Street Journal, The Bond Buyer's Weekly 20-Bond
Index, The Bond Buyer's Index, The Bond Buyer, The New York Times, Business
Week, Pensions and Investments, U.S.A. Today and local newspapers. In addition
to performance information, general information about these Funds that appears
in a publication such as those mentioned above may be included in advertisements
and in reports to Shareholders.
From time to time, the Funds may include the following types of
information in advertisements, supplemental sales literature and reports to
Shareholders: (1) discussions of general economic or financial principles (such
as the effects of inflation, the power of compounding and the benefits of
dollar-cost averaging); (2) discussions of general economic trends; (3)
presentations of statistical data to supplement such discussions; (4)
descriptions of past or anticipated portfolio holdings for one or more of the
Funds within the Trust; (5) descriptions of investment strategies for one or
more of such Funds; (6) descriptions or comparisons of various savings and
investment products (including but not limited to insured bank products,
annuities, qualified retirement plans and individual stocks and bonds) which may
or may not include the Funds; (7) comparisons of investment products (including
the Funds) with relevant market or industry indices or other appropriate
benchmarks; (8) discussions of fund rankings or ratings by recognized rating
organizations; and (9) testimonials describing the experience of persons that
have invested in one or more of the Funds. In addition, with respect to the
Intermediate Tax-Free Bond Fund, the benefits of Tax-Free investments may be
communicated to shareholders. For example, the Intermediate Tax-Free Bond Fund
may present information on the yield that a taxable investment must earn at
various income brackets to produce after-tax yields equivalent to those of the
tax-exempt investments.
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<PAGE> 156
The Funds may also include calculations, such as hypothetical
compounding examples, which describe hypothetical investment results in such
communications. Such performance examples will be based on an express set of
assumptions and are not indicative of the performance of any of the Funds.
Morningstar, Inc., Chicago, Illinois, rates mutual funds on a one- to
five-star rating scale with five stars representing the highest rating. Such
ratings are based upon a fund's historical risk/reward ratio as determined by
Morningstar relative to other funds in that fund's class. Funds are divided into
classes based upon their respective investment objectives. The one- to five-star
ratings represent the following ratings by Morningstar, respectively: Lowest,
Below Average, Neutral, Above Average and Highest.
Current yields or performance will fluctuate from time to time and are
not necessarily representative of future results. Accordingly, a Fund's yield or
performance may not provide for comparison with bank deposits or other
investments that pay a fixed return for a stated period of time. Yield and
performance are functions of a Fund's quality, composition, and maturity, as
well as expenses allocated to the Fund.
Fees imposed on its affiliated or correspondent banks for cash
management services will reduce a Fund's effective yield to Customers.
MISCELLANEOUS
- -------------
The Funds are not required to hold a meeting of Shareholders for the
purpose of electing Trustees except that (i) the Funds are required to hold a
Shareholders' meeting for the election of Trustees at such time as less than a
majority of the Trustees holding office have been elected by Shareholders and
(ii) if, as a result of a vacancy on the Board of Trustees, less than two-thirds
of the Trustees holding office have been elected by the Shareholders, that
vacancy may only be filled by a vote of the Shareholders. In addition, Trustees
may be removed from office by a written consent signed by the holders of Shares
representing two-thirds of the outstanding Shares of the Funds at a meeting duly
called for the purpose, which meeting shall be held upon the written request of
the holders of Shares representing not less than 10% of the outstanding Shares
of the Funds. Upon written request by the holders of Shares representing 1% of
the outstanding Shares of the Funds stating that such Shareholders wish to
communicate with the other Shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a Trustee, the
Funds will provide a list of Shareholders or disseminate appropriate materials
(at the expense of the requesting Shareholders). Except as set forth above, the
Trustees may continue to hold office and may appoint successor Trustees.
The Funds are registered with the SEC as a management investment
company. Such registration does not involve supervision by the Commission of the
management or policies of the Funds.
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<PAGE> 157
The Prospectuses and this Statement of Additional Information omit
certain of the information contained in the Registration Statement filed with
the SEC. Copies of such information may be obtained from the Commission upon
payment of the prescribed fee.
The Prospectuses and this Statement of Additional Information are not
an offering of the securities herein described in any state in which such
offering may not lawfully be made. No salesman, dealer, or other person is
authorized to give any information or make any representation other than those
contained in the Prospectus and Statement of Additional Information.
As of November 18, 1997, Bank of Oklahoma, N.A. (Bank of Oklahoma
Tower, One Williams Center, Tulsa, Oklahoma 74103) and its bank affiliates were
the Shareholder of record of 99.58% of the U.S. Treasury Fund's Shares, 99.85%
of the Cash Management Fund's Shares, 98.59% of the Equity Fund's Shares, 96.10%
of the Aggressive Growth Fund's Shares, 99.35% of the Balanced Fund's Shares,
97.60% of the Bond Fund's Shares, 96.88% of the Intermediate Bond Fund's Shares,
99.19% of the Short-Term Income Fund's Shares, 81.64% of the Intermediate
Tax-Free Bond Fund's Shares and 99.69% of the Growth Equity Fund's Shares. As of
November 25, 1997 Bank of Oklahoma, N.A. and its bank affiliates possessed, on
behalf of its underlying accounts, voting and investment power with respect to
70.59% of the U.S. Treasury Fund's Shares, 56.55% of the Cash Management Fund's
Shares, 81.41% of the Equity Fund's Shares, 74.52% of the Aggressive Growth
Fund's Shares, 62.23% of the Balanced Fund's Shares, 84.53% of the Bond Fund's
Shares, 85.73% of the Intermediate Bond Fund's Shares, 97.97% of the Short-Term
Income Fund's Shares, 83.36% of the Intermediate Tax-Free Bond Fund's Shares and
99.83% of the Growth Equity Fund's Shares, and, as a consequence, Bank of
Oklahoma, N.A. and its bank affiliates may be deemed to be a controlling person
of each Fund under the 1940 Act.
As of November 18, 1997, the trustees and officers of the Funds, as a
group, owned less than one percent of the Shares of each of the Funds.
The following table indicates each additional person known by the Funds
to own beneficially five percent (5%) or more of the Shares of the Funds as of
November 25, 1997:
<TABLE>
<CAPTION>
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund
- ---------------- -------------------- -------
Cash Management Fund
--------------------
<S> <C> <C>
Superstar/Netlink 27,921,003.880 7.70%
7140 South Lewis Avenue
Tulsa, Oklahoma 74136-5422
</TABLE>
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<PAGE> 158
<TABLE>
<CAPTION>
U.S. Treasury Fund
------------------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund
- ---------------- ------------------ -------
<S> <C> <C>
Lawton Water Authority 19,045,974.190 5.26%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Bond Fund
---------
ONEOK, Thrift Plan 220,632.624 5.19%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Balanced Fund
-------------
Nordam AP Balanced Fund 131,469.404 5.52%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Hughes-Anderson 215,972.944 9.06%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
RCB Bank 401-K 257,622.198 10.81%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Aggressive Growth Fund
----------------------
BOK Thrift Plan 291,184.723 9.50%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
</TABLE>
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<PAGE> 159
FINANCIAL STATEMENTS
The Independent Auditors' Report for the American Performance Funds for
the year ended August 31, 1997 and Financial Statements for the American
Performance Funds for the five year period ended August 31, 1997, appearing in
the Annual Report are incorporated by reference in the Statement of Additional
Information. A copy of the Annual Report dated as of August 31, 1997, may be
obtained without charge by contacting the Distributor, BISYS Fund Services at
3435 Stelzer Road, Columbus, Ohio 43219 or by telephoning toll-free at
1-800-762-7085.
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<PAGE> 160
APPENDIX
The nationally recognized statistical rating organizations
(individually, an "NRSRO") that may be utilized by the Funds with regard to
portfolio investments for the Funds include Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Corporation ("S&P"), Duff & Phelps, Inc.
("Duff"), Fitch Investors Service, Inc. ("Fitch"), IBCA Limited and its
affiliate, IBCA Inc. (collectively, "IBCA"), and Thomson BankWatch, Inc.
("Thomson"). Set forth below is a description of the relevant ratings of each
such NRSRO. The NRSROs that may be utilized by the Funds and the description of
each NRSRO's ratings is as of the date of this Statement of Additional
Information, and may subsequently change.
Long-Term Debt Ratings (may be assigned, for example, to corporate and municipal
bonds)
Description of the five highest long-term debt ratings by Moody's (Moody's
applies numerical modifiers (1, 2, and 3) in each rating category to indicate
the security's ranking within the category):
Aaa Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edged." Interest payments
are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of
such issues.
Aa Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what
are generally known as high-grade bonds. They are rated lower
than the best bonds because margins of protection may not be
as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat
larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment some time in the
future.
Baa Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor
poorly secured). Interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured.
Often the protection of interest and
B-44
<PAGE> 161
principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times in the future.
Uncertainty of position characterizes bonds in this class.
Description of the five highest long-term debt ratings by S&P (S&P may apply a
plus (+) or minus (-) to a particular rating classification to show relative
standing within that classification):
AAA Debt rated AAA has the highest rating assigned by S&P.
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 higher 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 BB debt is regarded as having significant speculative
characteristics with respect to capacity to pay interest and
repay principal. BB indicates the least degree of speculation.
While such debt will likely have some quality and protective
characteristics, these may be outweighed by large
uncertainties or major exposure to adverse conditions.
Description of the three highest long-term debt ratings by Duff:
AAA Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.
AA+ High credit quality. Protection factors are strong.
AA Risk is modest but may vary slightly from time to
AA- time because of economic conditions.
A+ Protection factors are average but adequate. However,
A risk factors are more variable and greater in periods
A- of economic stress.
Description of the three highest long-term debt ratings by Fitch (plus or minus
signs are used with a rating symbol to indicate the relative position of the
credit within the rating category):
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<PAGE> 162
AAA Bonds and preferred stock considered to be investment grade
and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and/or dividends
and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA Bonds and preferred stock considered to be investment grade
and of very high credit quality. The obligor's ability to pay
interest and/or dividends and repay principal is very strong,
although not quite as strong as bonds rated "AAA." Because
bonds and preferred stock rated in the "AAA" and "AA"
categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issues is
generally rated "F-1+."
A Bonds and preferred stock considered to be investment grade
and of high credit quality. The obligor's ability to pay
interest and/or dividends and repay principal is considered to
be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than debt or preferred
securities with higher ratings.
IBCA's description of its three highest long-term debt ratings:
AAA Obligations for which there is the lowest expectation of
investment risk. Capacity for timely repayment of principal
and interest is substantial, such that adverse changes in
business, economic or financial conditions are unlikely to
increase investment risk significantly.
AA Obligations for which there is a very low expectation of
investment risk. Capacity for timely repayment of principal
and interest is substantial. Adverse changes in business,
economic, or financial conditions may increase investment
risk, albeit not very significantly.
A Obligations for which there is a low expectation of investment
risk. Capacity for timely repayment of principal and interest
is strong, although adverse changes in business, economic or
financial conditions may lead to increased investment risk.
Short-Term Debt Ratings (may be assigned, for example, to commercial paper,
master demand notes, bank instruments, and letters of credit)
Moody's description of its three highest short-term debt ratings:
Prime-1 Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often be evidenced
by many of the following characteristics:
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<PAGE> 163
-Leading market positions in well-established
industries.
-High rates of return on funds employed.
-Conservative capitalization structures with moderate
reliance on debt and ample asset protection.
-Broad margins in earnings coverage of fixed
financial charges and high internal cash generation.
-Well-established access to a range of financial
markets and assured sources of alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt
obligations. This will normally be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject
to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Prime-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market
compositions may be more pronounced. Variability in earnings
and profitability may result in changes in the level of debt
protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is
maintained.
S&P's description of its three highest short-term debt ratings:
A-1 This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to have
extremely strong safety characteristics are denoted with a
plus sign (+).
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as
high as for issues designated "A-1."
A-3 Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the
adverse effects of changes in circumstances than obligations
carrying the higher designations.
B-47
<PAGE> 164
Duff's description of its three highest short-term debt ratings (Duff
incorporates gradations of "1+" (one plus) and "1-" (one minus) to assist
investors in recognizing quality differences within the highest rating
category):
D-1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
D-1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
D-1- High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk
factors are very small.
D-2 Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs
may enlarge total financing requirements, access to capital
markets is good. Risk factors are small.
D-3 Satisfactory liquidity and other protection factors qualify
issues as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.
Fitch's description of its three highest short-term debt ratings:
F-1+ Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of
assurance for timely payment.
F-1 Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
F-2 Good Credit Quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as for issues assigned F-1+
or F-1 ratings.
F-3 Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for
timely payment is adequate, however, near-term adverse changes
could cause these securities to be rated below investment
grade.
IBCA's description of its three highest short-term debt ratings:
A1 Obligations supported by the highest capacity for timely
repayment. Where issues possess a particularly strong credit
feature, a rating of A1+ is assigned.
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<PAGE> 165
A2 Obligations supported by a satisfactory capacity for timely
repayment, although such capacity may be susceptible to
adverse changes in business, economic or financial conditions.
A3 Obligations supported by an adequate capacity for timely
repayment. Such capacity is more susceptible to adverse
changes in business, economic or financial conditions than for
obligations in higher categories.
Short-Term Loan/Municipal Note Ratings
- --------------------------------------
Moody's description of its two highest short-term loan/municipal note ratings:
MIG-1/VMIG-1 This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity
support or demonstrated broad-based access to the market for
refinancing.
MIG-2/VMIG-2 This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
S&P's description of its two highest municipal note ratings:
SP-1 Strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will
be given a plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over
the term of the notes.
Short-Term Debt Ratings
- -----------------------
Thomson BankWatch, Inc. ("TBW") ratings are based upon a qualitative and
quantitative analysis of all segments of the organization including, where
applicable, holding company and operating subsidiaries.
BankWatch(TM) Ratings do not constitute a recommendation to buy or sell
securities of any of these companies. Further, BankWatch does not suggest
specific investment criteria for individual clients.
The TBW Short-Term Ratings apply to commercial paper, other senior short-term
obligations and deposit obligations of the entities to which the rating has been
assigned.
The TBW Short-Term Ratings apply only to unsecured instruments that have a
maturity of one year or less.
B-49
<PAGE> 166
The TBW Short-Term Ratings specifically assess the likelihood of an untimely
payment of principal or interest.
TBW-1 The highest category; indicates a very high likelihood that
principal and interest will be paid on a timely basis.
TBW-2 The second highest category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as for
issues rated "TBW-1".
TBW-3 The lowest investment-grade category; indicates that while the
obligation is more susceptible to adverse developments (both
internal and external) than those with higher ratings,
capacity to service principal and interest in a timely fashion
is considered adequate.
TBW-4 The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.
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<PAGE> 167
REGISTRATION STATEMENT
OF
AMERICAN PERFORMANCE FUNDS
ON
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Included in Part A:
-- Financial Highlights.
Included in Part B:
The following financial statements have been incorporated by reference
into the Statement of Additional Information by reference to American
Performance Funds' Annual Report to Shareholders, dated August 31,
1997;
-- Independent Auditors' Report dated October 17, 1997.
-- Statements of Assets and Liabilities as of August 31, 1997
(audited).
-- Statements of Operations for the fiscal year ended August 31,
1997 (audited).
-- Statements of Changes in Net Assets for the years ended August
31, 1996 and 1997 (audited).
-- Schedules of Portfolio Investments dated August 31, 1997
(audited).
-- Notes to Financial Statements dated August 31, 1997 (audited).
-- Financial Highlights for each of the periods or years ended
August 31, 1993, August 31, 1994, August 31, 1995, August 31,
1996 and August 31, 1997 (audited).
<PAGE> 168
(b) Exhibits:
(1) Agreement and Declaration of Trust dated October 1, 1987, as
amended and restated on August 20, 1990 is incorporated by
reference to Exhibit 1 to Post-Effective Amendment No. 1 to
the Funds' Registration Statement (filed October 31, 1990).
(2)(a) Bylaws as approved and adopted by Registrant's Board of
Trustees is incorporated by reference to Exhibit 2 to
Post-Effective Amendment No. 1 to the Funds' Registration
Statement (filed October 31, 1990).
(2)(b) Certified Resolution of the Registrant's Board of Trustees
amending the Registrant's Bylaws as adopted by a unanimous
vote at a meeting of the Board of Trustees on October 25, 1991
is incorporated by reference to Exhibit 2(b) to Post-Effective
Amendment No. 3 to the Funds' Registration Statement (filed
November 26, 1991).
(3) None.
(4)(a) Article III, Section 4 and 5, Article V, Article VIII, Section
4, and Article IX, Sections 1, 4, 5 and 7 of the Agreement and
Declaration of Trust dated October 1, 1987, as amended and
restated on August 20, 1990 is incorporated by reference to
Exhibit 1 to Post-Effective Amendment No. 1 to the Funds'
Registration Statement (filed October 31, 1990).
(4)(b) Article 9, Article 10, Section 6 and Article 11 of the Bylaws
as approved and adopted by Registrant's Board of Trustees is
incorporated by reference to Exhibit 2 to Post-Effective
Amendment No. 1 to the Funds' Registration Statement (filed
October 31, 1990).
(4)(c) Certified Resolution of the Registrant's Board of Trustees
amending the Registrant's Bylaws as adopted by a unanimous
vote at a meeting of the Board of Trustees on October 25, 1991
is incorporated by reference to Exhibit 2(b) to Post-Effective
Amendment No. 3 to the Funds' Registration Statement (filed
November 26, 1991).
(5)(a) Investment Advisory Agreement between Registrant and Bank of
Oklahoma, N.A. (formerly BancOklahoma Trust Company) dated
October 1, 1994 is incorporated by reference to Exhibit (5)(a)
to Post-
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<PAGE> 169
Effective Amendment No. 11 to the Funds' Registration
Statement (filed February 13, 1995).
(5)(b) Sub-Investment Advisory Agreement between Bank of Oklahoma,
N.A. and AMR Investment Services, Inc. dated June 16, 1997 is
filed herewith.
(5)(c) Amended Schedule A to the Investment Advisory Agreement
between Registrant and Bank of Oklahoma, N.A. (formerly,
BancOklahoma Trust Company) dated October 1, 1994 is
incorporated by reference to Exhibit 5(c) to Post-Effective
Amendment No. 13 to the Funds' Registration Statement (filed
October 31, 1995).
(5)(d) Amended Schedule A to the Investment Advisory Agreement
between Registrant and Bank of Oklahoma, N.A. (formerly
BancOklahoma Trust Company) dated October 1, 1994 is filed
herewith.
(6)(a) Distribution Agreement between Registrant and BISYS Fund
Services, LP (formerly, The Winsbury Company Limited
Partnership) is incorporated by reference to Exhibit 6(a) to
Post-Effective Amendment No. 6 to the Funds' Registration
Statement (filed December 7, 1993).
(6)(b) Amended Schedules A and B to Distribution Agreement between
Registrant and BISYS Fund Services, LP (formerly, The Winsbury
Company Limited Partnership) dated October 1, 1993 are
incorporated by reference to Exhibit 6(b) to Post-Effective
Amendment No. 13 to the Funds' Registration Statement (filed
October 31, 1995).
(6)(c) Amended Schedules A and B to Distribution Agreement between
Registrant and BISYS Fund Services, LP (formerly, The Winsbury
Company Limited Partnership) dated October 1, 1993 are filed
herewith.
(7) None.
(8)(a) Custodian Agreement between Registrant and Bank of Oklahoma,
N.A. is incorporated by reference to Exhibit 8(a) to
Post-Effective Amendment No. 1 to the Funds' Registration
Statement (filed October 31, 1990).
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<PAGE> 170
(8)(b) Amended Schedule A to Custodian Agreement between Registrant
and Bank of Oklahoma, N.A. dated September 5, 1990 is
incorporated by reference to Exhibit 8(b) to Post-Effective
Amendment No. 13 to the Funds' Registration Statement (filed
October 31, 1995).
(8)(c) Amended Schedule A to Custodian Agreement between Registrant
and Bank of Oklahoma, N.A. is filed herewith.
(9)(a) Management and Administration Agreement between Registrant and
BISYS Fund Services, LP (formerly The Winsbury Company Limited
Partnership) dated September 5, 1990, as amended and restated
on May 12, 1995, is incorporated by reference to Exhibit 9(a)
to Post-Effective Amendment No. 13 to the Funds' Registration
Statement (filed October 31, 1995).
(9)(b) Schedule A to the Management and Administration Agreement
between Registrant and BISYS Fund Services, LP (formerly The
Winsbury Company Limited Partnership) dated September 5, 1990,
as amended and restated on May 12, 1995 is filed herewith.
(9)(c) Transfer Agency and Shareholder Service Agreement between
Registrant and BISYS Fund Services Ohio, Inc. (formerly, The
Winsbury Service Corporation) is incorporated by reference to
Exhibit 9(b) to Post-Effective Amendment No. 1 to the Funds'
Registration Statement (filed October 31, 1990).
(9)(d) Fund Accounting Agreement between Registrant and BISYS Fund
Services Ohio, Inc. (formerly, The Winsbury Service
Corporation) dated September 5, 1990, as amended and restated
May 12, 1995, is incorporated by reference to Exhibit 9(d) to
Post-Effective Amendment No. 15 to the Funds' Registration
Statement (filed June 24, 1997).
(9)(e) Amended Schedule A to Transfer Agency and Shareholder Service
Agreement between Registrant and BISYS Fund Services Ohio,
Inc. (formerly, The Winsbury Service Corporation) dated
September 5, 1990 is incorporated by reference to Exhibit 9(d)
to Post-Effective Amendment No. 13 to the Funds' Registration
Statement (filed October 31, 1995).
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<PAGE> 171
(9)(f) Sub-Administration Agreement between BISYS Fund Services, LP
and Bank of Oklahoma, N.A. dated July 25, 1997 is filed
herewith.
(9)(g) Amended Schedule A to Transfer Agency and Shareholder Service
Agreement between Registrant and BISYS Fund Services Ohio,
Inc. (formerly The Winsbury Service Corporation) dated
September 5, 1990 is filed herewith.
(9)(h) Amended Schedule A to Fund Accounting Agreement between
Registrant and BISYS Fund Services Ohio, Inc. (formerly, The
Winsbury Service Corporation) dated September 5, 1990, as
amended and restated May 12, 1995 is filed herewith.
(9)(i) Schedule A to Sub-Administration Agreement between BISYS Fund
Services, LP (formerly, The Winsbury Company Limited
Partnership) and Bank of Oklahoma, N.A. (formerly,
BancOklahoma Trust Company) dated May 12, 1995 is filed
herewith.
(10) Opinion of Ropes & Gray is filed herewith.
(11)(a) Consent of KPMG Peat Marwick LLP is filed herewith.
(11)(b) Consent of Ropes & Gray is filed herewith.
(12) None.
(13) Purchase Agreement dated August 3, 1990 between Registrant and
Winsbury Associates is incorporated by reference to Exhibit 13
to Post-Effective Amendment No. 1 to the Funds' Registration
Statement (filed October 31, 1990).
(14) None.
(15)(a) Amended and Restated Distribution and Shareholder Services
Plan dated October 1, 1993 is incorporated by reference to
Exhibit 15(a) to
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<PAGE> 172
Post-Effective Amendment No. 7 to the Funds' Registration
Statement (filed December 16, 1993).
(15)(b) Servicing Agreement with Respect to Shareholder Services to be
utilized in connection with Distribution and Shareholder
Services Plan is incorporated by reference to Exhibit 15(b) to
Pre-Effective Amendment No. 1 to the Funds' Registration
Statement (filed August 29, 1990).
(15)(c) Servicing Agreement with Respect to Distribution Assistance
and Shareholder Services to be utilized in connection with
Distribution and Shareholder Services Plan is incorporated by
reference to Exhibit 15(c) to Pre-Effective Amendment No. 1 to
the Funds' Registration Statement (filed August 29, 1990).
(15)(d) Amended Schedule A to Amended and Restated Distribution and
Shareholder Services Plan dated October 1, 1993 is
incorporated by reference to Exhibit 15(d) to Post-Effective
Amendment No. 13 to the Funds' Registration Statement (filed
October 31, 1995).
(15)(e) Schedule A to Amended and Restated Distribution and
Shareholder Services Plan dated October 1, 1993 is filed
herewith.
(16)(a) Performance Calculations Schedules for every Fund except the
Short-Term Income Fund and the Balanced Fund are incorporated
by reference to Exhibit 16 to Post-Effective Amendment No. 6
to the Funds' Registration Statement (filed December 7, 1993).
(16)(b) Performance Calculations Schedules for the Short-Term Income
Fund and the Balanced Fund are incorporated by reference to
Exhibit 16(b) to Post-Effective Amendment No. 13 to the Funds'
Registration Statement (filed October 31, 1995).
(17) Financial Data Schedules
(a) U.S. Treasury Fund
(b) Cash Management Fund
(c) Equity Fund
(d) Aggressive Growth Fund
(e) Balanced Fund
(f) Bond Fund
(g) Intermediate Bond Fund
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<PAGE> 173
(h) Intermediate Tax-Free Bond Fund
(i) Short-Term Income Fund
Item 25. Persons Controlled by or under Common Control with Registrant
-------------------------------------------------------------
There are no persons controlled or under common control with the
Registrant.
Item 26. Number of Holders of Securities
-------------------------------
As of November 30, 1997 the number of record holders of each series of
the Funds were as follows:
Title of Series Number of Record Holders
--------------- ------------------------
U.S. Treasury Fund 11
Cash Management Fund 31
Equity Fund 52
Aggressive Growth Fund 117
Bond Fund 17
Intermediate Bond Fund 60
Intermediate Tax-Free
Bond Fund 113
Short-Term Income Fund 5
Balanced Fund 7
Growth Equity Fund 4
Item 27. Indemnification
---------------
Article VIII of Registrant's Agreement and Declaration of Trust, filed
or incorporated by reference as Exhibit (1) hereto, provides for the
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<PAGE> 174
indemnification of Registrant's trustees and officers. Indemnification
of Registrant's principal underwriter is provided for in the Agreement
between Registrant and that service provider as filed or incorporated
by reference as Exhibits hereto. As of the effective date of this
Registration Statement, Registrant has obtained from a major insurance
carrier a trustees and officers' liability policy covering certain
types of errors and omissions. In no event will Registrant indemnify
any of its trustees, officers, employees, or agents against any
liability to which such person would otherwise be subject by reason of
his willful misfeasance, bad faith, or gross negligence in the
performance of his duties, or by reason of his reckless disregard of
the duties involved in the conduct of his office or under his agreement
with Registrant. Registrant will comply with Rule 484 under the
Securities Act of 1933 and Release 11330 under the Investment Company
Act of 1940 in connection with any indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers, and controlling
persons of Registrant pursuant to the foregoing provisions, or
otherwise, 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 Registrant of expenses incurred or paid by a
trustee, officer or controlling person of 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, 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 of 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 28. Business and Other Connections of Investment Adviser and Investment
-------------------------------------------------------------------
Sub-Adviser
-----------
Bank of Oklahoma, N.A. ("BOK") serves as Registrant's investment
adviser. AMR Investment Services, Inc. serves as the sub-investment
adviser to the American Performance Cash Management Fund.
To the knowledge of Registrant, none of the directors or officers of
BOK and AMR Investment Services, Inc. except those set forth below is
or has
C-8
<PAGE> 175
been, at any time during the past two calendar years, engaged in any
other business, profession, vocation or employment of a substantial
nature. Set forth below are the names and principal businesses of the
directors of BOK and AMR Investment Services, Inc. who are engaged in
any other business, profession, vocation or employment of a substantial
nature.
BANK OF OKLAHOMA, N.A.
----------------------
<TABLE>
<CAPTION>
Name and Position With Other
Bank of Oklahoma Substantial Type of
N.A. Occupation Business
- ---------------------- ----------- --------
<S> <C> <C>
W. Wayne Allen Chairman and Chief Executive Oil
Director Officer, Phillips Petroleum
Company, 18 Phillips Building,
Bartlesville, OK 74004
Keith E. Bailey Chairman, President and Chief Oil, Gas and
Director Executive Officer, The Williams Telecommunications
Companies, Inc., P.O. Box 2400,
Tulsa, OK 74102
Glenn A. Cox (Retired President and Chief Oil
Director Operating Officer, Phillips
Petroleum Company), 401 SE
Dewey, Suite 318, Bartlesville,
OK 74003
Stanley A. Lybarger None
Director, President and
Chief Executive Officer
Nancy J. Davies Community Leader, 2802 Volunteer
Director Meadowlark Lane, Enid, OK
73703
Dr. Robert H. Donaldson (Former President, University of Education
Director Tulsa), 6449 S. Richmond, Tulsa,
OK 74136
</TABLE>
C-9
<PAGE> 176
<TABLE>
<S> <C> <C>
James O. Goodwin Chief Executive Officer, The Publishing
Director Oklahoma Eagle Publ. Co., 624
East Archer, Tulsa, OK 74120
D. Joseph Graham Vice President and Chief Financial Oil
Director Officer, Kaiser-Francis Oil
Company, P.O. Box 21468, Tulsa,
OK 74121-1468
V. Burns Hargis Attorney, McAfee & Taft Law
Director Two Leadership Square,
10th Floor, 211 N. Robinson
Oklahoma City, OK 73102
Eugene A. Harris None
Director and Executive
Vice President
E. Carey Joullian IV President, Mustang Fuel Energy
Director Corporation, 2000 Classen Blvd.,
800E, Oklahoma City, OK 73106-
6036
George B. Kaiser President and Owner, Kaiser- Oil
Director and Francis Oil Co.
Chairman of the Board
David R. Lopez President, Oklahoma Telecommunications
Director Southwestern Bell Telephone, 800
North Harvey, Oklahoma, OK
73102
Frank A. McPherson (Retired Chairman and Chief Oil
Director Executive Officer Kerr-McGee
Corporation), The Oil Center,
2601 Northwest Expressway,
Suite 805E, Oklahoma City, OK
73112
</TABLE>
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<PAGE> 177
<TABLE>
<S> <C> <C>
J. Larry Nichols Chief Executive Officer and Energy
Director President, Devon Energy
Corporation, 20 North Broadway,
Suite 1500, Oklahoma City, OK
73102-8260
James W. Pielsticker President, Arrow Trucking Trucking
Director Company, 4230 South Elwood,
P.O. Box 3750, Tulsa, OK 74101
E.C. "Kip" Richards Senior Vice President of Oil
Director Operations, Sooner Pipe and
Supply Corporation,
MidContinent Tower, 10th Floor,
401 S. Boston, Tulsa, OK 74103
L. Francis Rooney, III Chairman and Chief Executive Construction
Director Officer, Manhattan Construction
Company, 111 W. 5th Street, Suite
1000, Tulsa, OK 74103-4253
James A. White None
Director, Executive Vice
President and Chief
Financial Officer
</TABLE>
The address of Bank of Oklahoma, N.A. is P.O. Box 2300, Tulsa, Oklahoma 74103.
The address of the BancOklahoma Corporation is One Williams Center, Bank of
Oklahoma Tower, Tulsa, Oklahoma 74103.
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<PAGE> 178
AMR INVESTMENT SERVICES, INC.
-----------------------------
<TABLE>
<CAPTION>
Name and Position with AMR Other Substantial Occupation Type of Business
- -------------------------- ---------------------------- ----------------
<S> <C> <C>
Robert L. Crandall Chairman, President and Chief Airline; Travel and
Director and Chairman Executive Officer, AMR Information Technology;
Corporation; Director, Chairman, Oil Service
and Chief Executive Officer,
American Airlines, Inc.; Director,
The Sabre Group, Inc. Mr.
Crandall also serves as an officer
and/or director of various
subsidiaries of AMR Corporation.
Director, Halliburton Company.
Gerard J. Arpey Senior Vice President and Chief Airline; Travel and
Director and Vice Chairman Financial Officer, AMR Information Technology
Corporation; Director, The
Sabre Group, Inc. Mr. Arpey
also serves as an officer and/or
director of various subsidiaries
of AMR Corporation.
Jeffrey M. Jackson Vice President of Corporate Airline
Vice President and Treasurer Development and Treasurer,
AMR Corporation, (March
1995-Present); Vice President
of Corporate Development,
AMR Corporation. Mr. Jackson
also serves as an officer and/or
director of various subsidiaries
of AMR Corporation.
</TABLE>
C-12
<PAGE> 179
<TABLE>
<S> <C> <C>
Charles D. Marlett Corporate Secretary, AMR Airline; Arts
Secretary Corporation; Corporate
Secretary, American Airlines,
Inc. Mr. Marlett also serves as
an officer and/or director of
various subsidiaries of AMR
Corporation. Director, Dallas
Summer Musicals.
Anne H. McNamara Senior Vice President and Airline; Travel and
Director General Counsel, AMR Information Technology;
Corporation; Senior Vice Energy
President, Administration and
General Counsel, American
Airlines, Inc.; Director, The
Sabre Group, Inc.; Ms.
McNamara also serves as an
officer and/or director of
various subsidiaries of AMR
Corporation. Director, LGE
Energy Corp.
William F. Quinn President, AMR Investment Investment Adviser;
President Services, Inc.; Chairman and Credit Union; REIT;
Director, American Airlines Airline
Employees Federal Credit
Union. Mr. Quinn also serves
as an officer and/or director of
various subsidiaries of AMR
Corporation. Trustee and
President, AMR Investment
Services Trust, American
AAdvantage Funds, American
AAdvantage Mileage Funds;
Director, Crescent Real Estate
Equities, Inc.
</TABLE>
The address of each director or officer of AMR Investment Services,
Inc. is 4333 Amon Carter Boulevard, Ft. Worth, Texas 76155.
C-13
<PAGE> 180
Item 29. Principal Underwriter
---------------------
(a) BISYS Fund Services acts as distributor and administrator for
Registrant. BISYS Fund Services also distributes the
securities of the following investment companies: The
Riverfront Funds, Inc., The Victory Portfolios, AmSouth Mutual
Funds, The Parkstone Group of Funds, The Sessions Group, the
MarketWatch Funds, the BB&T Mutual Funds Group, The Coventry
Group, Pacific Capital Funds, The ARCH Fund, Inc., M.S.D.&T.
Funds, Inc., MMA Praxis Mutual Funds, Summit Investment Trust,
the Fountain Square Funds, HSBC Family of Funds, The Infinity
Mutual Funds Inc., The Kent Funds, the Parkstone Advantage
Funds, Pegasus Funds, the Republic Funds Trust, The Republic
Adviser Funds Trust, SBSF Funds Inc., The Time Horizon Funds,
First Choice Funds Trust, InTrust Fund Trusts, Minerva Fund,
Inc., Empire Builder Tax Free Bond Fund, Hirtle Callaghan
Trust, Meyers Sheppard Investment Trust, Sefton Funds, and
Emerald Funds, The One Group Funds, Barr Rosenburg Funds,
Centura Funds, CVD China Funds, ESC Strategic Funds, Eureka
Funds, IBJ Funds, Magna Funds, LifeCycle Funds, Performance
Funds and Pro Funds.
(b) Partners of BISYS Fund Services as of the date of this Part C
are as follows:
C-14
<PAGE> 181
<TABLE>
<CAPTION>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address BISYS Fund Services Registrant
- ------------------ ------------------- -------------
<S> <C> <C>
BISYS Fund Services, Inc. Sole General Partner None
150 Clove Road
Little Falls, NJ 07424
WC Subsidiary Corporation Sole Limited Partner None
150 Clove Road
Little Falls, NJ 07424
</TABLE>
Each of these corporations is a subsidiary of The BISYS Group, Inc., 150 Clove
Road, Little Falls, NJ 07424.
Item 30. Location of Accounts and Records
--------------------------------
(1) Bank of Oklahoma, N.A., Bank of Oklahoma Tower, Tulsa,
Oklahoma 74103 (records relating to its functions as
Investment Adviser).
(2) AMR Investment Services, Inc., P.O. Box 619003, Dallas/Ft.
Worth Airport, Texas 75261-9003 (records relating to its
function as Sub-Investment Adviser).
(3) BISYS Fund Services, LP, 3435 Stelzer Road, Columbus, Ohio
43219 (records relating to its functions as Administrator and
Distributor).
(4) BISYS Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus,
OH 43219 (records relating to its functions as Transfer Agent
and Fund Accountant).
(5) Bank of Oklahoma, N.A., Bank of Oklahoma Tower, Tulsa,
Oklahoma 74103 (records relating to its functions as
Custodian).
(6) Ropes & Gray, One Franklin Square, 1301 K Street, N.W., Suite
800 East, Washington, D.C. 20005 (Agreement and Declaration of
Trust, Bylaws and Minute Books).
Item 31. Management Services
-------------------
N/A.
C-15
<PAGE> 182
Item 32. Undertakings
------------
(a) Registrant undertakes to call a meeting of shareholders, at
the request of holders of 10% of the Registrant's outstanding
shares, for the purpose of voting upon the question of removal
of a trustee or trustees and undertakes to assist in
communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
(b) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest
annual report to shareholders upon request and without charge.
(c) Registrant undertakes on behalf of the American Performance
Growth Equity Fund to file a post-effective amendment,
including financial statements which need not be certified,
within four to six months from the commencement of operations
of the Growth Equity Fund.
C-16
<PAGE> 183
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all the requirements for effectiveness of this Post-Effective Amendment
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment No. 16 to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Washington,
District of Columbia on the 15th day of December, 1997.
American Performance Funds
Registrant
*/s/Walter B. Grimm
-------------------------
Walter B. Grimm
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 16 to the Registration Statement has been signed
below by the following persons in the capacity and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
*/s/Walter B. Grimm Chairman, President
- -------------------------- and Trustee December 15, 1997
Walter B. Grimm
*/s/Thomas E. Line Treasurer December 15, 1997
- --------------------------
Thomas E. Line
*/s/Michael J. Hall Trustee December 15, 1997
- --------------------------
Michael J. Hall
*/s/Perry A. Wimpey Trustee December 15, 1997
- --------------------------
Perry A. Wimpey
*/s/I. Edgar Hendrix Trustee December 15, 1997
- --------------------------
I. Edgar Hendrix
* By: /s/Alan G. Priest
- --------------------------
Alan G. Priest, As
Attorney-in-Fact Pursuant
to Powers of Attorney Filed Herewith.
</TABLE>
C-17
<PAGE> 184
POWER OF ATTORNEY
-----------------
Walter B. Grimm, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Maryellen M. Lundquist, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, each individually, may
deem necessary or advisable or which may be required to enable the American
Performance Funds (the "Trust"), to comply with the Investment Company Act of
1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and any
rules, regulations or requirements of the Securities and Exchange Commission in
respect thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A pursuant to said Acts, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a trustee and/or officer of
the Trust any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
thereof.
Dated: November 12, 1993 /s/ Walter B. Grimm
------------------- ----------------------------
Walter B. Grimm
<PAGE> 185
POWER OF ATTORNEY
-----------------
Thomas E. Line whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Maryellen M. Lundquist, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, each individually, may
deem necessary or advisable or which may be required to enable the American
Performance Funds (the "Trust"), to comply with the Investment Company Act of
1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and any
rules, regulations or requirements of the Securities and Exchange Commission in
respect thereof, in connection with the filing and effectiveness of any and all
amendments to the Trust's Registration Statement on Form N-1A pursuant to said
Acts, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign in the name and on behalf of the
undersigned as a trustee and/or officer of the Trust any and all such amendments
filed with the Securities and Exchange Commission under said Acts, and any other
instruments or documents related thereto, and the undersigned does hereby ratify
and confirm all that said attorneys and agents, or either of them, shall do or
cause to be done by virtue thereof.
Dated: April 23, 1997 /s/ Thomas E. Line
------------------- ----------------------------
Thomas E. Line
<PAGE> 186
POWER OF ATTORNEY
-----------------
Michael J. Hall, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Charles B. Mathias, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, each individually, may
deem necessary or advisable or which may be required to enable the American
Performance Funds (the "Trust"), to comply with the Investment Company Act of
1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and any
rules, regulations or requirements of the Securities and Exchange Commission in
respect thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A pursuant to said Acts, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a trustee and/or officer of
the Trust any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
thereof.
Dated: August 7, 1990 /s/ Michael J. Hall
------------------- ----------------------------
Michael J. Hall
<PAGE> 187
POWER OF ATTORNEY
-----------------
Perry A. Wimpey, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Charles B. Mathias, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, each individually, may
deem necessary or advisable or which may be required to enable the American
Performance Funds (the "Trust"), to comply with the Investment Company Act of
1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and any
rules, regulations or requirements of the Securities and Exchange Commission in
respect thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A pursuant to said Acts, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a trustee and/or officer of
the Trust any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
thereof.
Dated: July 25, 1990 /s/ Perry A. Wimpey
------------------- ----------------------------
Perry A. Wimpey
<PAGE> 188
POWER OF ATTORNEY
-----------------
I. Edgar Hendrix, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Maryellen M. Lundquist, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, each individually, may
deem necessary or advisable or which may be required to enable the American
Performance Funds (the "Trust"), to comply with the Investment Company Act of
1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and any
rules, regulations or requirements of the Securities and Exchange Commission in
respect thereof, in connection with the filing and effectiveness of any and all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A pursuant to said Acts, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a trustee and/or officer of
the Trust any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
thereof.
Dated: July 25, 1990 /s/ I. Edgar Hendrix
------------------- ----------------------------
I. Edgar Hendrix
<PAGE> 189
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE NO.
- ------- ----------- --------
<S> <C> <C>
(5)(b) Sub-Investment Advisory Agreement.
(5)(d) Amended Schedule A to the Investment Advisory Agreement.
(6)(c) Amended Schedules A and B to Distribution Agreement.
(8)(c) Amended Schedule A to Custodian Agreement.
(9)(b) Schedule A to the Management and Administration Agreement.
(9)(f) Sub-Administration Agreement.
(9)(g) Amended Schedule A to Transfer Agency and Shareholder Service
Agreement.
(9)(h) Amended Schedule A to Fund Accounting Agreement.
(9)(i) Schedule A to Sub-Administration Agreement.
(10) Opinion of Ropes & Gray.
(11)(a) Consent of KPMG Peat Marwick LLP.
(11)(b) Consent of Ropes & Gray.
(15)(e) Schedule A to Amended and Restated Distribution and
Shareholder Services Plan.
(27) Financial Data Schedules
(a) U.S. Treasury Fund
(b) Cash Management Fund
(c) Equity Fund
(d) Aggressive Growth Fund
(e) Balanced Fund
(f) Bond Fund
(g) Intermediate Bond Fund
(h) Intermediate Tax-Free Bond Fund
(i) Short Term Income Fund
</TABLE>
<PAGE> 1
EXHIBIT 5(b)
SUB-INVESTMENT ADVISORY AGREEMENT
<PAGE> 2
SUB-INVESTMENT ADVISORY AGREEMENT
AMERICAN PERFORMANCE CASH MANAGEMENT FUND
AGREEMENT executed as of June 16, 1997 by and between BANK OF OKLAHOMA,
N.A. ("Bank of Oklahoma"), and AMR INVESTMENT SERVICES, INC. ("Sub-Adviser").
WHEREAS, Bank of Oklahoma is the investment adviser to the American
Performance Cash Management Fund (the "Fund"), an investment portfolio of the
American Performance Funds (the "Trust"); and
WHEREAS, Bank of Oklahoma desires to retain the Sub-Adviser to furnish
investment advisory services in connection with the Fund; and
WHEREAS, Sub-Adviser is willing to make available to Bank of Oklahoma
and to the Fund certain sub-investment advisory services;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT. Bank of Oklahoma hereby appoints the Sub-Adviser to
provide certain sub-investment advisory services for the period and on the terms
set forth in this Agreement. The Sub-Adviser accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. Bank of Oklahoma has furnished the
Sub-Adviser with copies properly certified or authenticated of each of the
following:
(a) the Trust's Agreement and Declaration of Trust, as filed
with the Secretary of State of The Commonwealth of
Massachusetts on October 1, 1987, and all amendments thereto
or restatements thereof (such Declaration, as presently in
effect and as it shall from time to time be amended or
restated, is herein called the "Declaration of Trust");
(b) the Trust's Bylaws and any amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing
the appointment of the Sub-Adviser and approving this
Agreement;
<PAGE> 3
(d) the Trust's Notification of Registration on Form N-8A
under the Investment Company Act of 1940 (the "1940 Act") as
filed with the Securities and Exchange Commission (the "SEC")
on June 1, 1990, and all amendments thereto;
(e) the Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended ("1933 Act") (File No.
33-35190) and under the 1940 Act (File No. 811-6114) as filed
with the Securities and Exchange Commission and all amendments
thereto; and
(f) the Trust's most recent prospectus for the Fund and its
Statement of Additional Information (such prospectus and
Statement of Additional Information, as presently in effect,
and all amendments and supplements thereto, are herein
collectively called the "Prospectus").
Bank of Oklahoma will promptly furnish the Sub-Adviser with copies of
all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject always to the supervision of Bank of Oklahoma
and the Trust's Board of Trustees, the Sub-Adviser will furnish an investment
program in respect of, and make investment decisions for, the Fund, and place
all orders for the purchase and sale of securities for the Fund. In the
performance of its duties, the Sub-Adviser will comply with the provisions of
the Trust's Declaration of Trust and Code of Regulations, and the stated
investment objectives, policies and restrictions of the Fund, will use its best
efforts to safeguard and promote the welfare of the Fund, and will comply with
other policies which the Trustees or Bank of Oklahoma, as the case may be, may
from time to time determine and provide notification to the Sub-Adviser in
writing. The Sub-Adviser and Bank of Oklahoma shall each make its officers and
employees available to the other from time to time to review investment policies
for the Fund and to consult with each other regarding the investment affairs of
the Fund. The Sub-Adviser shall report to the Board of Trustees and to Bank of
Oklahoma with respect to the implementation of such program.
The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such
services as it uses in providing services to other accounts
for which it has investment management responsibilities;
(b) will conform with all applicable rules and regulations of
the Securities and Exchange Commission and in addition will
conduct its activities under this
2
<PAGE> 4
Agreement in accordance with any applicable regulations
pertaining to the investment advisory activities of the
Sub-Adviser;
(c) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or
with any broker or dealer. In placing orders with brokers and
dealers, the Sub-Adviser will attempt to obtain the best
combination of prompt execution of orders in an effective
manner and at the most favorable price. Consistent with this
obligation, when the execution and price offered by two or
more brokers or dealers are comparable, the Sub- Adviser may,
in its discretion, purchase and sell portfolio securities to
and from brokers and dealers who provide the Sub-Adviser with
research advice and other services. In no instance will the
Fund's portfolio securities be purchased from or sold to BISYS
Fund Services, Bank of Oklahoma, the Sub-Adviser or any
affiliated person of the Trust, Bank of Oklahoma, BISYS Fund
Services, or the Sub-Adviser, except as may be permitted under
the 1940 Act. Bank of Oklahoma and BISYS Fund Services will
provide to the Sub-Adviser, from time to time, a list of their
respective affiliated persons;
(d) will, at the reasonable request of Bank of Oklahoma or the
Trust, report to the Trust and to Bank of Oklahoma and will
make appropriate persons available for the purpose of
reviewing with representatives of Bank of Oklahoma the
management of the Fund, including, without limitation, review
of the general investment strategy of the Fund, interest rate
considerations and general conditions affecting the
marketplace;
(e) will furnish the Trust's Board of Trustees such periodic
and special reports as the Board may request;
(f) will treat confidentially and as proprietary information
of the Trust all records and other information relative to the
Trust, and will not use records and information for any
purpose other than 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 the
Sub-Adviser 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;
(g) will receive and comply with any written recommendations
that Bank of Oklahoma may make, from time to time, with
respect to the investment and reinvestment of the assets of
the Fund; and
3
<PAGE> 5
(h) will provide advice and recommendations with respect to
other aspects of the business and affairs of the Fund and
perform such other functions related to the provision of
investment management services as Bank of Oklahoma may
reasonably request.
4. BOOKS AND RECORDS. In compliance with Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the Trust
on behalf of Bank of Oklahoma are the property of the Trust and further agrees
to surrender promptly to the Trust or to Bank of Oklahoma any of such records
upon request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 adopted under the 1940 Act all records required to be
maintained by Sub-Adviser on behalf of Bank of Oklahoma under Rule 31a-1 adopted
under the 1940 Act.
5. EXPENSES. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Fund.
6. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, Bank of Oklahoma will pay the Sub-Adviser and the
Sub-Adviser will accept as full compensation therefor a fee computed daily and
paid monthly in arrears at an annual rate not less than fifteen one-hundredths
of one percent (.15%) nor more than forty one-hundredths of one percent (.40%)
of the Fund's average daily net assets.
7. SERVICES TO OTHERS. Bank of Oklahoma understands, and has advised
the Trust's Board of Trustees, that the Sub-Adviser now acts, and/or may in the
future act, as an investment adviser to managed accounts and as an investment
adviser, sub-adviser, or administrator to other investment companies. Bank of
Oklahoma has no objection to Sub-Adviser's acting in such capacities, provided
that whenever the Fund and one or more accounts or investment companies advised
by the Sub-Adviser have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula believed by
the Sub-Adviser to be equitable to each such account or company.
Bank of Oklahoma recognizes, and has advised the Trust's Board of
Trustees, that in some cases this procedure may adversely affect the size of the
position that the Fund may obtain in a particular security. In addition, Bank of
Oklahoma understands, and has advised the Trust's Board of Trustees, that the
persons employed by the Sub-Adviser to assist in the Sub-Adviser's duties under
this Agreement will not devote their full time to such service and nothing
contained in this Agreement will be deemed to limit or restrict the right of the
Sub-Adviser or any of its affiliates to engage in other businesses or render
services of whatever kind or nature.
4
<PAGE> 6
8. LIMITATION OF LIABILITY. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by Bank of Oklahoma
or by the Fund in connection with the performance of this Agreement, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. In no case
shall the Sub-Adviser be liable for any actions taken or non-actions with
respect to the performance of services under this Agreement based upon specific
information, instructions, or requests given or made to the Sub-Adviser in
writing by a representative of Bank of Oklahoma thereunto duly authorized, which
information, instructions, or requests are properly executed or acted upon by
the Sub-Adviser.
9. DURATION AND TERMINATION. This Agreement will become effective as of
the date first written above, provided that it shall have been approved by vote
of a majority of the outstanding voting securities of the Fund, in accordance
with the require-ments under the 1940 Act, and, unless sooner terminated as
provided herein, shall continue in effect until August 1, 1998.
Thereafter, if not terminated, this Agreement shall continue in effect
for successive one-year periods ending on August 1, PROVIDED that such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Trust's Board of Trustees who are not
interested persons of the Trust, the Sub-Adviser, or Bank of Oklahoma, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the vote of a majority of the Trust's Board of Trustees or by the vote of a
majority of all votes attributable to the outstanding Shares of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated at any time on
sixty days' written notice, without the payment of any penalty, by the Trust (by
vote of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund), by Bank of Oklahoma, or by the Sub-
Adviser. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the meaning
ascribed to such terms in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
11. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
5
<PAGE> 7
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the laws of the Commonwealth of Massachusetts.
12. NOTICE. The name the "American Performance Funds" and "Trustees of
the American Performance Funds" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated as of October 1, 1987, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of State of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of the "American Performance Funds" entered into in the
name or on behalf thereof by any of the Trustees, representatives or agents are
made not individually, but in such capacities and are not binding upon any of
the Trustees, Shareholders or representatives of the Trust personally, but bind
only the assets of the Trust, and all persons dealing with any Fund of the Trust
must look solely to the assets of the Trust belonging to such Fund for the
enforcement of any claims against the Trust.
13. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall constitute an original and each of which, collectively, shall
constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
BANK OF OKLAHOMA, N.A.
By: /s/ H. James Holloman
-------------------------
Title: Executive Vice President
-------------------------
AMR INVESTMENT SERVICES, INC.
By: /s/ W. F. Quinn
-------------------------
Title: President
-------------------------
6
<PAGE> 1
EXHIBIT 5(d)
AMENDED SCHEDULE A TO THE INVESTMENT ADVISORY AGREEMENT
<PAGE> 2
Amended Schedule A
to the Investment Advisory Agreement between
American Performance Funds and Bank of Oklahoma, N.A.
(formerly BancOklahoma Trust Company)
dated October 1, 1994
<TABLE>
<CAPTION>
Name of Fund Compensation*
- ------------ -------------
<S> <C>
American Performance U.S. Annual rate of forty one-hundredths of one
Treasury Fund percent (.40%) of American Performance
U.S. Treasury Fund's average daily net assets.
American Performance Cash Annual rate of forty one-hundredths of one
Management Fund percent (.40%) of American Performance
Cash Management Fund's average daily net assets.
American Performance Bond Annual rate of fifty-five one-hundredths of one
Bond Fund hundredths of one percent (.55%) of American
Performance Bond Fund's average daily net assets.
American Performance Annual rate of fifty-five one-hundredths of one
Intermediate Bond Fund percent (.55%) of American Performance
Intermediate Bond Fund's average daily net assets.
American Performance Annual rate of fifty-five one-hundredths of one
Intermediate Tax-Free percent (.55%) of American Performance
Bond Fund Intermediate Tax-Free Bond Fund's average daily net
assets.
American Performance Annual rate of fifty-five one-hundredths of one
Short-Term Income Fund percent (.55%) of American Performance Short-Term
Income Fund's average daily net assets.
</TABLE>
<PAGE> 3
Amended Schedule A
to the Investment Advisory Agreement between
American Performance Funds and Bank of Oklahoma, N.A.
(formerly BancOklahoma Trust Company)
dated October 1, 1994
<TABLE>
<CAPTION>
Name of Fund Compensation*
- ------------ -------------
<S> <C>
American Performance Equity Annual rate of sixty-nine one-hundredths of one
Fund percent (.69%) of American Performance Equity Fund's
average daily net assets.
American Performance Annual rate of sixty-nine one-hundredths of one
Aggressive Growth Fund percent (.69%) of American Performance Aggressive
Growth Fund's average daily net assets.
American Performance Annual rate of seventy-four one-hundredths of one
Balanced Fund percent (.74%) of American Performance Balanced
Fund's average
daily net assets.
American Performance Annual rate of sixty-nine one-hundredths of one
Growth Equity Fund percent (.69%) of American Performance Growth Equity
Fund's average daily net assets.
</TABLE>
[SEAL] American Performance Funds
By: /s/ D'Ray Moore
------------------------
Date: August 22, 1997
[SEAL] Bank of Oklahoma, N.A.
By: /s/ H. J. Holloman
------------------------
Date: July 18, 1997
- -------------
* All fees are computed daily and paid monthly.
<PAGE> 1
EXHIBIT 6(c)
AMENDED SCHEDULES A AND B TO DISTRIBUTION AGREEMENT
<PAGE> 2
Amended Schedule A
to the Distribution Agreement
between American Performance Funds and
BISYS Fund Services Limited Partnership
(formerly, The Winsbury Company Limited Partnership)
dated October 1, 1993
Name of Fund
- ------------
American Performance U.S. Treasury Fund
American Performance Cash Management Fund
American Performance Bond Fund
American Performance Intermediate Bond Fund
American Performance Intermediate Tax-Free Bond Fund
American Performance Equity Fund
American Performance Aggressive Growth Fund
American Performance Short-Term Income Fund
American Performance Balanced Fund
American Performance Growth Equity Fund
American Performance Funds
By: /s/ D'Ray Moore
-------------------------
Title: Vice President
------------------------
Date: July 25, 1997
BISYS Fund Services Limited
Partnership
By: BISYS Fund Services, Inc.
General Partner
By: /s/ George O. Martinez
-------------------------
Title: Senior Vice President
------------------------
Date: July 25, 1997
<PAGE> 3
Amended Schedule B
to the Distribution Agreement
between American Performance Funds and
BISYS Fund Services Limited Partnership
(formerly, The Winsbury Company Limited Partnership)
dated October 1, 1993
Name of Load Fund
- -----------------
American Performance Bond Fund
American Performance Intermediate Bond Fund
American Performance Intermediate Tax-Free Bond Fund
American Performance Equity Fund
American Performance Aggressive Growth Fund
American Performance Short-Term Income Fund
American Performance Balanced Fund
American Performance Growth Equity Fund
American Performance Funds
By: /s/ D'Ray Moore
-------------------------
Title: Vice President
----------------------
Date: July 25, 1997
BISYS Fund Services Limited
Partnership
By: BISYS Fund Services, Inc.
General Partner
By: /s/ George O. Martinez
-------------------------
Title: Senior Vice President
----------------------
Date: July 25, 1997
<PAGE> 1
EXHIBIT 8(c)
AMENDED SCHEDULE A TO CUSTODIAN AGREEMENT
<PAGE> 2
Form of Amended Schedule A
to the Custodian Agreement
between American Performance Funds and
Bank of Oklahoma, N.A.
September 5, 1990
Name of Fund
- ------------
American Performance Cash Management Fund
American Performance U.S. Treasury Fund
American Performance Bond Fund
American Performance Intermediate Bond Fund
American Performance Intermediate Tax-Free Bond Fund
American Performance Equity Fund
American Performance Aggressive Growth Fund
American Performance Short-Term Income Fund
American Performance Balanced Fund
American Performance Growth Equity Fund
[SEAL] American Performance Funds
By: /s/ D'Ray Moore
------------------------
Date: July 25, 1997
[SEAL] Bank of Oklahoma, N.A.
By: /s/ H. J. Holloman
------------------------
Date: July 25, 1997
<PAGE> 1
EXHIBIT 9(b)
SCHEDULE A TO THE MANAGEMENT AND ADMINISTRATION AGREEMENT
<PAGE> 2
Schedule A
to the Amended and Restated Management and Administration Agreement
between American Performance Funds and
BISYS Fund Services Limited Partnership
(Formerly, The Winsbury Company Limited Partnership)
dated May 12, 1995
Name of Fund Compensation*
- ------------ -------------
American Performance Cash Management Fund Annual rate of twenty one-
hundredths of one percent (.20%)
of American Performance Cash
Management Fund's average daily
net assets.
American Performance U.S. Treasury Fund Annual rate of twenty one-
hundredths of one percent (.20%)
of American Performance U.S.
Treasury Fund's average daily
net assets.
American Performance Bond Fund Annual rate of twenty
one-hundredths of one percent
(.20%) of American Performance
Bond Fund's average daily net
assets.
American Performance Intermediate Bond Fund Annual rate of twenty
one-hundredths of one percent
(.20%) of American Performance
Intermediate Bond Fund's average
daily net assets.
American Performance Intermediate Tax-Free Annual rate of twenty one-
Bond Fund hundredths of one percent (.20%)
of American Performance
Intermediate Tax-Free Bond
Fund's average daily net assets.
A-1
<PAGE> 3
Schedule A (Continued)
to the Amended and Restated Management and Administration Agreement
between American Performance Funds and
BISYS Fund Services Limited Partnership
(Formerly, The Winsbury Company Limited Partnership)
dated May 12, 1995
Name of Fund Compensation*
- ------------ -------------
American Performance Equity Fund Annual rate of twenty
one-hundredths of one percent
(.20%) of American Performance
Equity Fund's average daily net
assets.
American Performance Aggressive Growth Fund Annual rate of twenty
one-hundredths of one percent
(.20%) of American Performance
Aggressive Growth Fund's average
daily net assets.
American Performance Short-Term Income Fund Annual rate of twenty
one-hundredths of one percent
(.20%) of American Performance
Short-Term Income Fund's
average daily net assets.
American Performance Balanced Fund Annual rate of twenty
one-hundredths of one percent
(.20%) of American Performance
Balanced Fund's average daily
net assets.
A-2
<PAGE> 4
Schedule A (Continued)
to the
Amended and Restated Management and Administration Agreement
between American Performance Funds and
BISYS Fund Services Limited Partnership
(Formerly, The Winsbury Company Limited Partnership)
dated May 12, 1995
American Performance Growth Equity Fund Annual rate of twenty
one-hundredths of one percent
(.20%) of American Performance
Growth Equity Fund's average
daily net assets.
American Performance Funds
By: /s/ D'Ray Moore
-----------------------------
Title: Vice President
--------------------------
Date: July 25, 1997
BISYS Fund Services Limited Partnership
By: BISYS Fund Services, Inc.
General Partner
By: /s/ George O. Martinez
-----------------------------
Title: Senior Vice President
--------------------------
Date: July 25, 1997
- ----------------------
* All fees are computed daily and paid periodically.
A-3
<PAGE> 1
Exhibit 9(f)
SUB-ADMINISTRATION AGREEMENT
----------------------------
AGREEMENT made this 25th day of July, 1997, between BISYS FUND SERVICES
LIMITED PARTNERSHIP, d/b/a BISYS Fund Services (the "Administrator"), a
partnership organized under the laws of the State of Ohio and having its
principal place of business at 3435 Stelzer Road, Columbus, OH 43219, and BANK
OF OKLAHOMA, N.A., or its successors and assigns, (the "Sub-Administrator"), a
national bank with its principal office at One Williams Center, Tulsa, OK 74103.
WHEREAS, the Administrator has entered into a Management and
Administration Agreement, dated September 5, 1990, as amended and restated on
May 12, 1995 (the "Management and Administration Agreement"), with the American
Performance Funds (the "Trust"), a Massachusetts business trust having its
principal place of business at 3435 Stelzer Road, Columbus, OH 43219, concerning
the provision of management and administrative services for the investment
portfolios of the Trust identified on Schedule A hereto, as such Schedule shall
be amended from time to time (individually referred to herein as a "Fund" and
collectively as the "Funds"); and
WHEREAS, the Administrator desires to retain the Sub-Administrator to
assist it in performing administrative services with respect to each Fund and
the Sub-Administrator is willing to perform such services on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Sub-Administrator. As provided herein, the
Sub-Administrator will perform the following duties:
(i) assist the Administrator in the supervision of all aspects of
the operations of the Funds except those performed by the
distributor for the Funds under its Distribution Agreement,
the transfer agent for the Funds under its Transfer Agency
Agreement and the fund accountant under its Fund Accounting
Agreement;
(ii) serve as on-site liaison between the Trust and its Tulsa,
Oklahoma-based service providers;
<PAGE> 2
(iii) furnish statistical and research data;
(iv) assist the Administrator in the preparation of compliance
filings pursuant to state securities laws with the advice of
the Trust's counsel and coordinate with the transfer agent to
monitor the sale of the Funds' shares;
(v) assist the Administrator to the extent requested by the
Administrator in the preparation, mailing, and filing of the
Trust's Annual and Semi-Annual Reports to Shareholders and its
Registration Statements;
(vi) assist the Administrator in the preparation of Proxy
Statements and related documents with the advice of Trust's
counsel and coordinate the distribution of such documents; and
(vii) provide Trustee Board meeting support, including the
preparation of documents related thereto.
2. Compensation; Reimbursement of Expenses. The Administrator shall pay
the Sub-Administrator for the services provided under this Agreement a fee with
respect to each Fund calculated at the annual rate of five one-hundredths of one
percent (.05%) of such Fund's average daily net assets. The fee payable
hereunder shall be calculated and paid on a monthly basis. The fee for the
period from the day of the month this Agreement is entered into until the end of
that month shall be prorated according to the proportion which such period bears
to the full monthly period. Upon any termination of this Agreement before the
end of any month, the fee for such part of a month shall be prorated according
to the proportion which such period bears to the full monthly period and shall
be payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to Administrator, the value
of the net assets of a particular Fund shall be computed in the manner described
in the Trust's Agreement and Declaration of Trust or in the prospectus or
Statement of Additional Information respecting the Fund as from time to time in
effect for the computation of the value of such net assets in connection with
the determination of the liquidating value of the shares of such Fund.
-2-
<PAGE> 3
3. Effective Date. This Agreement shall become effective with respect
to a Fund as of the date first written above (or, if a particular Fund is not in
existence on that date, on the date specified in the amendment to Schedule A to
this Agreement relating to such Fund or, if no date is specified, the date on
which such amendment is executed) (the "Effective Date").
4. Term. This Agreement shall continue in effect with respect to a Fund
for such time as the Management and Administration Agreement shall be in effect
with respect to such Fund.
5. Standard of Care; Reliance on Records and Instructions;
Indemnification. The Sub-Administrator shall use its best efforts to insure the
accuracy of all services performed under this Agreement, but shall not be liable
to the Administrator or the Trust for any action taken or omitted by the
Sub-Administrator in the absence of bad faith, willful misfeasance, negligence
or from reckless disregard by it of its obligations and duties. The
Administrator agrees to indemnify and hold harmless the Sub-Administrator, its
employees, agents, directors, officers and nominees from and against any and all
claims, demands, actions and suits, whether groundless or otherwise, and from
and against any and all judgments, liabilities, losses, damages, costs, charges,
counsel fees and other expenses of every nature and character arising out of or
in any way relating to the Sub-Administrator's actions taken or nonactions with
respect to the performance of services under this Agreement with respect to a
Fund or based, if applicable, upon reasonable reliance on information, records,
instructions or requests with respect to such Fund given or made to the
Sub-Administrator by a duly authorized representative of the Administrator;
provided that this indemnification shall not apply to actions or omissions of
the Sub-Administrator in cases of its own bad faith, willful misfeasance,
negligence or from reckless disregard by it of its obligations and duties, and
further provided that prior to confessing any claim against it which may be the
subject of this indemnification, the Sub-Administrator shall give the
Administrator written notice of and reasonable opportunity to defend against
said claim in its own name or in the name of the Sub-Administrator.
6. Record Retention and Confidentiality. The Sub-Administrator shall
keep and maintain on behalf of the Trust all books and records which the Trust
and the Sub- Administrator are, or may be, required to keep and maintain in
connection with the services to be provided hereunder pursuant to any applicable
statutes, rules and regulations, including without limitation Rules 31a-1 and
31a-2 under the 1940 Act. The Sub-Administrator further
-3-
<PAGE> 4
agrees that all such books and records shall be the property of the Trust and to
make such books and records available for inspection by the Trust, by the
Administrator, or by the Securities and Exchange Commission at reasonable times
and otherwise to keep confidential all books and records and other information
relative to the Trust and its shareholders; except when requested to divulge
such information by duly-constituted authorities or court process.
7. Uncontrollable Events. The Sub-Administrator assumes no
responsibility hereunder, and shall not be liable, for any damage, loss of data,
delay or any other loss whatsoever caused by events beyond its reasonable
control.
8. Rights of Ownership. All computer programs and procedures developed
to perform the services to be provided by the Sub-Administrator under this
Agreement are the property of the Sub-Administrator. All records and other data
except such computer programs and procedures are the exclusive property of the
Trust and all such other records and data will be furnished to the Administrator
and/or the Trust in appropriate form as soon as practicable after termination of
this Agreement for any reason.
9. Return of Records. The Sub-Administrator may at its option at any
time, and shall promptly upon the demand of the Administrator and/or the Trust,
turn over to the Administrator and/or the Trust and cease to retain the
Sub-Administrator's files, records and documents created and maintained by the
Sub-Administrator pursuant to this Agreement which are no longer needed by the
Sub-Administrator in the performance of its services or for its legal
protection. If not so turned over to the Administrator and/or the Trust, such
documents and records will be retained by the Sub-Administrator for six years
from the year of creation. At the end of such six-year period, such records and
documents will be turned over to the Administrator and/or the Trust unless the
Trust authorizes in writing the destruction of such records and documents.
10. Notices. Any notice provided hereunder shall be sufficiently given
when sent by registered or certified mail to the Administrator at the following
address: 3435 Stelzer Road, Columbus, OH 43219, and to the Sub-Administrator at
the following address: One Williams Center, Tulsa, OK 74103, or at such other
address as either party may from time to time specify in writing to the other
party pursuant to this Section.
-4-
<PAGE> 5
11. Headings. Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
12. Assignment. This Agreement and the rights and duties hereunder
shall not be assignable with respect to a Fund by either of the parties hereto
except by the specific written consent of the other party and with the specific
written consent of the Trust.
13. Governing Law. This Agreement shall be governed by and provisions
shall be construed in accordance with the laws of The Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: BISYS Fund Services, Inc.,
General Partner
By: /s/ George O. Martinez
----------------------------
Title: Sr. Vice President
-------------------------
Date: July 18, 1997
BANK OF OKLAHOMA, N.A.
By: /s/ H. J. Holloman
----------------------------
Title: Executive Vice President
-------------------------
Dated: July 18, 1997
-5-
<PAGE> 1
EXHIBIT 9(g)
AMENDED SCHEDULE A TO
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENT
<PAGE> 2
Amended Schedule A
to the
Transfer Agency and Shareholder Service Agreement
Between BISYS Fund Services Ohio, Inc.
(formerly, The Winsbury Service Corporation)
and American Performance Funds
Dated September 5, 1990
Name of Fund
------------
American Performance U.S. Treasury Fund
American Performance Cash Management Fund
American Performance Bond Fund
American Performance Intermediate Bond Fund
American Performance Intermediate Tax-Free Bond Fund
American Performance Equity Fund
American Performance Aggressive Growth Fund
American Performance Short-Term Income Fund
American Performance Balanced Fund
American Performance Growth Equity Fund
Seal American Performance Funds
By: /s/ D'Ray Moore
------------------------
Date: July 25, 1997 Title: Secretary
---------------------
BISYS Fund Services Ohio, Inc.
By: /s/ George O. Martinez
------------------------
Date: July 25, 1997 Title: Vice President
---------------------
A-1
<PAGE> 1
EXHIBIT 9(h)
AMENDED SCHEDULE A TO FUND ACCOUNTING AGREEMENT
<PAGE> 2
Amended Schedule A
to the
Fund Accounting Agreement
between BISYS Fund Services Ohio, Inc.
(formerly the Winsbury Service Corporation) and
American Performance Funds
as amended and restated May 12, 1995
Name of the Fund
----------------
American Performance U.S. Treasury Fund
American Performance Cash Management Fund
American Performance Bond Fund
American Performance Intermediate Bond Fund
American Performance Intermediate Tax-Free Bond Fund
American Performance Equity Fund
American Performance Aggressive Growth Fund
American Performance Short-Term Income Fund
American Performance Balanced Fund
American Performance Growth Equity Fund
Seal American Performance Funds
By: /s/ D'Ray Moore
----------------------
Date: July 25, 1997
BISYS Fund Services Ohio, Inc.
By: /s/ George O. Martinez
----------------------
Date: July 25, 1997
A-1
<PAGE> 1
Exhibit 9(i)
<PAGE> 2
FORM OF SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES LIMITED PARTNERSHIP
AND BANK OF OKLAHOMA, N.A.
DATED JULY 25, 1997
NAME OF FUND
------------
American Performance U.S. Treasury Fund
American Performance Cash Management Fund
American Performance Bond Fund
American Performance Intermediate Bond Fund
American Performance Short-Term Income Fund
American Performance Intermediate Tax-Free Bond Fund
American Performance Equity Fund
American Performance Aggressive Growth Fund
American Performance Balanced Fund
American Performance Growth Equity Fund
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: BISYS Fund Services, Inc.
General Partner
By: /s/ George O. Martinez
----------------------------
Title: Sr. Vice President
-------------------------
Date: July 18, 1997
BANK OF OKLAHOMA, N.A.
By: /s/ H. J. Holloman
----------------------------
Title: Executive Vice President
-------------------------
Dated: July 18, 1997
<PAGE> 1
EXHIBIT (10)
Opinion of Ropes & Gray
<PAGE> 2
[ROPES & GRAY LETTERHEAD]
December 16, 1997
American Performance Funds
3435 Stelzer Road
Columbus, Ohio 43219
Gentlemen:
You have registered under the Securities Act of 1933, as amended (the
"1933 Act") an indefinite number of shares of beneficial interest ("Shares") of
the American Performance Funds ("Trust"), as permitted by Rule 24f-2 under the
Investment Company Act of 1940, as amended (the "1940 Act"). You propose to
file a post-effective amendment on Form N-1A (the "Post-Effective Amendment")
to your Registration Statement as required by Section 10(a)(3) of the 1933 Act
and the Rules thereunder and Section 8(b) of the 1940 Act and the rules
thereunder. The purpose of this filing is to update disclosure with regard to
each Fund of the Trust described in said Registration Statement (each a
"Series").
We have examined your Agreement and Declaration of Trust on file in the
office of the Secretary of The Commonwealth of Massachusetts and the Clerk of
the City of Boston. We have also examined a copy of your Bylaws and such other
documents, receipts and records as we have deemed necessary for the purpose of
this opinion.
Based upon the foregoing, we are of the opinion that the issue and sale of
the authorized but unissued Shares of the Series have been duly authorized
under Massachusetts law. Upon the original issue and sale of your authorized
but unissued Shares and upon receipt of the authorized consideration therefor
in an amount not less than the net asset value of the Shares established and in
force at the time of their sale, the Shares issued will be validly issued,
fully paid and non-assessable.
The American Performance Funds is an entity of the type commonly known as
a "Massachusetts business trust." Under Massachusetts law, shareholders could,
under certain circumstances, be held personally liable for the obligations of
the Trust. However, the Agreement and Declaration of Trust provides for
indemnification out of the property of a particular series of
<PAGE> 3
ROPES & GRAY
American Performance Funds
December 16, 1997
Page 2
Shares for all loss and expenses of any shareholder of that series held
personally liable solely by reason of his being or having been a shareholder.
Thus, the risk of shareholder liability is limited to circumstances in which
that series of Shares itself would be unable to meet its obligations.
We understand that this opinion is to be used in connection with the
filing of the Post-Effective Amendment. We consent to the filing of this
opinion with and as part of your Post-Effective Amendment.
Sincerely,
/s/ Ropes & Gray
Ropes & Gray
<PAGE> 1
EXHIBIT (11)(a)
Consent of KPMG Peat Marwick LLP
<PAGE> 2
Exhibit 11(a)
Independent Auditors' Consent
The Board of Trustees of
the American Performance Funds:
We consent to the use of our report dated October 17, 1997 and incorporated by
reference for the American Performance Funds as of August 31, 1997 and for the
periods indicated therein and to the reference to our firm under the headings
"Financial Highlights" in the Prospectuses and "Auditors" in the Statements of
Additional Information.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Columbus, Ohio
December 15, 1997
<PAGE> 1
EXHIBIT (11)(b)
Consent of Ropes & Gray
<PAGE> 2
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference to our firm
under the caption "Legal Counsel" included in or made a part of the
Post-Effective Amendment No. 16 to the Registration Statement of American
Performance Funds on Form N-1A under the Securities Act of 1933, as amended.
/s/ ROPES & GRAY
ROPES & GRAY
Washington, D.C.
December 16, 1997
<PAGE> 1
EXHIBIT 15(e)
FORM OF SCHEDULE A TO AMENDED AND RESTATED
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
<PAGE> 2
SCHEDULE A
TO THE AMENDED AND RESTATED
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
BETWEEN THE AMERICAN PERFORMANCE FUNDS AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
(FORMERLY, THE WINSBURY COMPANY LIMITED PARTNERSHIP)
DATED OCTOBER 1, 1993
Name of Fund Compensation*
- ------------ -------------
American Performance Cash Annual rate of twenty-five one-hundredths
Management Fund of one percent (.25%) of American
Performance Cash Management Fund's
average daily net assets.
American Performance U.S. Annual rate of twenty-five one-hundredths
Treasury Fund of one percent (.25%) of American
Performance U.S. Treasury Fund's average
daily net assets.
American Performance Annual rate of twenty-five one-hundredths
Bond Fund of one percent (.25%) of American
Performance Bond Fund's average daily net
assets.
American Performance Annual rate of twenty-five one-hundredths
Intermediate Bond Fund of one percent (.25%) of American
Performance Intermediate Bond Fund's
average daily net assets.
American Performance Annual rate of twenty-five one-hundredths
Intermediate Tax-Free Bond Fund of one percent (.25%) of American
Performance Intermediate Tax-Free Bond
Fund's average daily net assets.
American Performance Annual rate of twenty-five one-hundredths
Equity Fund of one percent (.25%) of American
Performance Equity Fund's average daily
net assets.
A-1
<PAGE> 3
SCHEDULE A (CONTINUED)
TO THE AMENDED AND RESTATED
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
BETWEEN THE AMERICAN PERFORMANCE FUNDS AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
(FORMERLY, THE WINSBURY COMPANY LIMITED PARTNERSHIP)
DATED OCTOBER 1, 1993
Name of Fund Compensation*
- ------------ -------------
American Performance Annual rate of twenty-five one-hundredths
Aggressive Growth Fund of one percent (.25%) of American
Performance Aggressive Growth Fund's
average daily net assets.
American Performance Annual rate of twenty-five one-hundredths
Short-Term Income Fund of one percent (.25%) of American
Performance Short-Term Income Fund's
average daily net assets.
American Performance Annual rate of twenty-five one-hundredths
Balanced Fund of one percent (.25%) of American
Performance Balanced Fund's average daily
net assets.
American Performance Annual rate of twenty-five one-hundredths
Growth Equity Fund of one percent (.25%) of American
Performance Growth Equity Fund's average
daily net assets.
[SEAL] AMERICAN PERFORMANCE FUNDS
By: /s/ D'Ray Moore
------------------------
Title: Vice President
---------------------
Date: July 25, 1997
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: BISYS Fund Services, Inc.,
General Partner
By: /s/ George O. Martinez
------------------------
Title: Senior Vice President
---------------------
Date: July 25, 1997
- -----------------------
* All fees are computed daily and paid monthly.
A-2
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 01
<NAME> CASH MANAGEMENT FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 330614708
<INVESTMENTS-AT-VALUE> 330614708
<RECEIVABLES> 2228238
<ASSETS-OTHER> 4081
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 332847027
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1751617
<TOTAL-LIABILITIES> 1751617
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 331100389<F1>
<SHARES-COMMON-STOCK> 331100389
<SHARES-COMMON-PRIOR> 375797212
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 4977
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 2
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 331095410
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20869655
<OTHER-INCOME> 0
<EXPENSES-NET> 2660831
<NET-INVESTMENT-INCOME> 18208824
<REALIZED-GAINS-CURRENT> (3389450)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14819374
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 18208824
<DISTRIBUTIONS-OF-GAINS> 10335
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918306763
<NUMBER-OF-SHARES-REDEEMED> 963038828
<SHARES-REINVESTED> 35242
<NET-CHANGE-IN-ASSETS> (44702084)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 282
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1476099
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3583393
<AVERAGE-NET-ASSETS> 369024709
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .049
<PER-SHARE-GAIN-APPREC> (.01)
<PER-SHARE-DIVIDEND> .049
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .01<F2>
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> .72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>A capital contribution of 3394524 was made to the Fund.
</FN>
<FN>
<F2>Represents per share amount from capital contribution.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 02
<NAME> U.S. TREASURY FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 299674389
<INVESTMENTS-AT-VALUE> 299674389
<RECEIVABLES> 103798
<ASSETS-OTHER> 2674
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 299780861
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1356431
<TOTAL-LIABILITIES> 1356431
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 298381287
<SHARES-COMMON-STOCK> 298381286
<SHARES-COMMON-PRIOR> 217406387
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 43143
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 298424430
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 13225793
<OTHER-INCOME> 0
<EXPENSES-NET> 1778549
<NET-INVESTMENT-INCOME> 11447244
<REALIZED-GAINS-CURRENT> 43118
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 11490362
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 11447244
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 722431270
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<SHARES-REINVESTED> 28693
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<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 130
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-EXPENSE> 2394102
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<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .046
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<PER-SHARE-DIVIDEND> .046
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<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> .72
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 03
<NAME> BOND FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 34710586
<INVESTMENTS-AT-VALUE> 35161971
<RECEIVABLES> 506115
<ASSETS-OTHER> 374
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35668460
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 214309
<TOTAL-LIABILITIES> 214309
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35446230
<SHARES-COMMON-STOCK> 3815832
<SHARES-COMMON-PRIOR> 3648782
<ACCUMULATED-NII-CURRENT> 17925
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 461389
<ACCUM-APPREC-OR-DEPREC> 451385
<NET-ASSETS> 35454151
<DIVIDEND-INCOME> 24571
<INTEREST-INCOME> 2352446
<OTHER-INCOME> 0
<EXPENSES-NET> 308905
<NET-INVESTMENT-INCOME> 2068112
<REALIZED-GAINS-CURRENT> 125115
<APPREC-INCREASE-CURRENT> 989409
<NET-CHANGE-FROM-OPS> 3182676
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2068112
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<NUMBER-OF-SHARES-SOLD> 1139743
<NUMBER-OF-SHARES-REDEEMED> 1122919
<SHARES-REINVESTED> 150226
<NET-CHANGE-IN-ASSETS> 2647462
<ACCUMULATED-NII-PRIOR> 7424
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 831117
<GROSS-ADVISORY-FEES> 180705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 374616
<AVERAGE-NET-ASSETS> 32855338
<PER-SHARE-NAV-BEGIN> 8.99
<PER-SHARE-NII> .58
<PER-SHARE-GAIN-APPREC> .3
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.29
<EXPENSE-RATIO> .94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 04
<NAME> INTERMEDIATE BOND FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 76660959
<INVESTMENTS-AT-VALUE> 77035657
<RECEIVABLES> 730616
<ASSETS-OTHER> 709
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 77766982
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 448430
<TOTAL-LIABILITIES> 448430
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77707080
<SHARES-COMMON-STOCK> 7555440
<SHARES-COMMON-PRIOR> 6305377
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 19520
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 743706
<ACCUM-APPREC-OR-DEPREC> 374698
<NET-ASSETS> 77318552
<DIVIDEND-INCOME> 36266
<INTEREST-INCOME> 4334536
<OTHER-INCOME> 0
<EXPENSES-NET> 596072
<NET-INVESTMENT-INCOME> 3774730
<REALIZED-GAINS-CURRENT> 86579
<APPREC-INCREASE-CURRENT> 1499963
<NET-CHANGE-FROM-OPS> 5361272
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3774730
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2699433
<NUMBER-OF-SHARES-REDEEMED> 1606065
<SHARES-REINVESTED> 156695
<NET-CHANGE-IN-ASSETS> 14230746
<ACCUMULATED-NII-PRIOR> 6635
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 835778
<GROSS-ADVISORY-FEES> 352311
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 724185
<AVERAGE-NET-ASSETS> 64056533
<PER-SHARE-NAV-BEGIN> 10.01
<PER-SHARE-NII> .60
<PER-SHARE-GAIN-APPREC> .22
<PER-SHARE-DIVIDEND> .60
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.23
<EXPENSE-RATIO> .93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 05
<NAME> EQUITY FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 128057189
<INVESTMENTS-AT-VALUE> 170734597
<RECEIVABLES> 560227
<ASSETS-OTHER> 1229
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 171296053
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 409526
<TOTAL-LIABILITIES> 409526
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 110007181
<SHARES-COMMON-STOCK> 9861376
<SHARES-COMMON-PRIOR> 6289664
<ACCUMULATED-NII-CURRENT> 2135
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18199803
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 42677408
<NET-ASSETS> 170886527
<DIVIDEND-INCOME> 2342324
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1281653
<NET-INVESTMENT-INCOME> 1060671
<REALIZED-GAINS-CURRENT> 20769620
<APPREC-INCREASE-CURRENT> 16959674
<NET-CHANGE-FROM-OPS> 38789965
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1098507<F1>
<DISTRIBUTIONS-OF-GAINS> 8951022
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4071242
<NUMBER-OF-SHARES-REDEEMED> 1171162
<SHARES-REINVESTED> 671632
<NET-CHANGE-IN-ASSETS> 84534469
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 6381205
<OVERDISTRIB-NII-PRIOR> 3935
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 833640
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1511207
<AVERAGE-NET-ASSETS> 120817480
<PER-SHARE-NAV-BEGIN> 13.73
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 5.03
<PER-SHARE-DIVIDEND> .14<F1>
<PER-SHARE-DISTRIBUTIONS> 1.42
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.33
<EXPENSE-RATIO> 1.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Includes Distributions In Excess of Net Investment Income
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 06
<NAME> AGGRESSIVE GROWTH FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 42600224
<INVESTMENTS-AT-VALUE> 59432099
<RECEIVABLES> 342653
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 59774752
<PAYABLE-FOR-SECURITIES> 738188
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54535
<TOTAL-LIABILITIES> 792723
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36413912
<SHARES-COMMON-STOCK> 3123579
<SHARES-COMMON-PRIOR> 2655987
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 24108
<ACCUMULATED-NET-GAINS> 5760350
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16831875
<NET-ASSETS> 58982029
<DIVIDEND-INCOME> 200414
<INTEREST-INCOME> 36021
<OTHER-INCOME> 0
<EXPENSES-NET> 488165
<NET-INVESTMENT-INCOME> (251730)
<REALIZED-GAINS-CURRENT> 6976334
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<NUMBER-OF-SHARES-SOLD> 1209715
<NUMBER-OF-SHARES-REDEEMED> 742123
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<NET-CHANGE-IN-ASSETS> 15704338
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 311765
<OVERDIST-NET-GAINS-PRIOR> 1215984
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<GROSS-EXPENSE> 573983
<AVERAGE-NET-ASSETS> 45167584
<PER-SHARE-NAV-BEGIN> 16.29
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> 2.65
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.88
<EXPENSE-RATIO> 1.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 07
<NAME> INTERMEDIATE TAX-FREE BOND FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 26078600
<INVESTMENTS-AT-VALUE> 26994181
<RECEIVABLES> 351382
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27345563
<PAYABLE-FOR-SECURITIES> 493110
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 308644
<TOTAL-LIABILITIES> 801754
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25472900
<SHARES-COMMON-STOCK> 2462508
<SHARES-COMMON-PRIOR> 2935146
<ACCUMULATED-NII-CURRENT> 15281
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 140047
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 915581
<NET-ASSETS> 26543809
<DIVIDEND-INCOME> 22269
<INTEREST-INCOME> 1432474
<OTHER-INCOME> 0
<EXPENSES-NET> 200247
<NET-INVESTMENT-INCOME> 1254496
<REALIZED-GAINS-CURRENT> 192740
<APPREC-INCREASE-CURRENT> 392909
<NET-CHANGE-FROM-OPS> 1840145
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1254496
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 311848
<NUMBER-OF-SHARES-REDEEMED> 806989
<SHARES-REINVESTED> 22503
<NET-CHANGE-IN-ASSETS> 4492634
<ACCUMULATED-NII-PRIOR> 12585
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 49996
<GROSS-ADVISORY-FEES> 149771
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 322787
<AVERAGE-NET-ASSETS> 27231016
<PER-SHARE-NAV-BEGIN> 10.57
<PER-SHARE-NII> .49
<PER-SHARE-GAIN-APPREC> .21
<PER-SHARE-DIVIDEND> .49
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.78
<EXPENSE-RATIO> .74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 08
<NAME> SHORT-TERM INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 15577443
<INVESTMENTS-AT-VALUE> 15620337
<RECEIVABLES> 127689
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15748026
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 89816
<TOTAL-LIABILITIES> 89816
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15652900
<SHARES-COMMON-STOCK> 1578925
<SHARES-COMMON-PRIOR> 1470128
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 7371
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 30213
<ACCUM-APPREC-OR-DEPREC> 42894
<NET-ASSETS> 15658210
<DIVIDEND-INCOME> 21588
<INTEREST-INCOME> 930586
<OTHER-INCOME> 0
<EXPENSES-NET> 49171
<NET-INVESTMENT-INCOME> 903003
<REALIZED-GAINS-CURRENT> (11257)
<APPREC-INCREASE-CURRENT> 213958
<NET-CHANGE-FROM-OPS> 1105704
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 917314<F1>
<DISTRIBUTIONS-OF-GAINS> 1214<F2>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 408000
<NUMBER-OF-SHARES-REDEEMED> 349764
<SHARES-REINVESTED> 50561
<NET-CHANGE-IN-ASSETS> 1258827
<ACCUMULATED-NII-PRIOR> 2085
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 14105
<GROSS-ADVISORY-FEES> 80882
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 171230
<AVERAGE-NET-ASSETS> 14705877
<PER-SHARE-NAV-BEGIN> 9.79
<PER-SHARE-NII> .61
<PER-SHARE-GAIN-APPREC> .14
<PER-SHARE-DIVIDEND> .62<F1>
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.92
<EXPENSE-RATIO> .33
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Includes Distributions In Excess of Net Investment Income
<F2>Distributions In Excess of Net Realized Gains
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 09
<NAME> BALANCED FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 26376397
<INVESTMENTS-AT-VALUE> 30333101
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<TOTAL-ASSETS> 30529130
<PAYABLE-FOR-SECURITIES> 48705
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 231769
<TOTAL-LIABILITIES> 280474
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24008296
<SHARES-COMMON-STOCK> 2260903
<SHARES-COMMON-PRIOR> 2002657
<ACCUMULATED-NII-CURRENT> 684
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2282972
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3956704
<NET-ASSETS> 30248656
<DIVIDEND-INCOME> 352978
<INTEREST-INCOME> 629945
<OTHER-INCOME> 0
<EXPENSES-NET> 95234
<NET-INVESTMENT-INCOME> 887689
<REALIZED-GAINS-CURRENT> 2584874
<APPREC-INCREASE-CURRENT> 2714005
<NET-CHANGE-FROM-OPS> 6186568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 893840<F1>
<DISTRIBUTIONS-OF-GAINS> 752189
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 502409
<NUMBER-OF-SHARES-REDEEMED> 378764
<SHARES-REINVESTED> 134601
<NET-CHANGE-IN-ASSETS> 7656227
<ACCUMULATED-NII-PRIOR> 2362
<ACCUMULATED-GAINS-PRIOR> 451628
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 196422
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 365978
<AVERAGE-NET-ASSETS> 26543485
<PER-SHARE-NAV-BEGIN> 11.28
<PER-SHARE-NII> .41
<PER-SHARE-GAIN-APPREC> 2.46
<PER-SHARE-DIVIDEND> .41
<PER-SHARE-DISTRIBUTIONS> .36
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.38
<EXPENSE-RATIO> .36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Includes Distributions in excess of Net Investment Income
</FN>
</TABLE>
