<PAGE> 1
Registration Nos. 33-35190 and 811-6114
As filed with the Securities and Exchange Commission on October 29, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 20 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
Amendment No. 18
--------------
AMERICAN PERFORMANCE FUNDS
--------------------------
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road, Columbus, Ohio 43219
---------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
800-762-7085
------------
Jeffrey Shiverdecker, Treasurer
American Performance Funds
3435 Stelzer Road, Columbus, Ohio 43219
---------------------------------------
(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
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: CONTINUOUS
- ---------------------------------------------------------
It is proposed that this filing become effective (check appropriate box)
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] On [Date] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ X ] On January 1, 2000 pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment
- -----------------------------------------------------------------------------
TITLE OF SECURITIES BEING REGISTERED: SHARES OF BENEFICIAL INTEREST
- ---------------------------------------------------------------------
<PAGE> 2
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Prospectus
January 1, 2000
MONEY MARKET FUNDS
U.S. Treasury Fund
Cash Management Fund
BOND FUNDS
Bond Fund
Intermediate Bond Fund
Intermediate Tax-Free Bond Fund
Short-Term Income Fund
EQUITY FUNDS
Equity Fund
Balanced Fund
Growth Equity Fund
Small Cap Equity Fund
APPLE BUSHEL ARTWORK
THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
APPLE LOGO
<PAGE> 3
HOW TO READ THIS PROSPECTUS
This prospectus is arranged into different sections so that you can easily
review this important information. The next page contains general information
you should know about investing in the Funds.
If you would like more detailed information about each Fund, please see:
<TABLE>
<S> <C>
U.S. Treasury Fund 2
Cash Management Fund 6
Bond Fund 10
Intermediate Bond Fund 15
Intermediate Tax-Free Bond Fund 21
Short-Term Income Fund 28
Equity Fund 33
Balanced Fund 38
Growth Equity Fund 43
Small Cap Equity Fund 48
</TABLE>
If you would like more information about the following topics, please see:
<TABLE>
<S> <C>
YOUR ACCOUNT 52
How sales Charges are Calculated 52
Sales Charge Waivers 53
Sales Charge Reductions 54
Rule 12b-1 Fees 55
Opening An Account 55
Buying Shares 57
Selling Shares 59
Exchanging Shares 61
Transaction Policies 62
Additional Investor Services 62
Dividends and Distributions 63
Taxes 64
INVESTMENT MANAGEMENT 66
FINANCIAL HIGHLIGHTS 70
ADDITIONAL INVESTMENT PRACTICES AND
RISKS 71
GLOSSARY OF INVESTMENT TERMS 81
</TABLE>
To obtain more information about the American Performance Funds please refer to
the back cover of the prospectus
January 1, 2000
APPLE LOGO
<PAGE> 4
PROSPECTUS
1
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
INTRODUCTION
Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities like stocks and
bonds. Before you invest, you should know a few things about investing in mutual
funds.
The value of your investment in a Fund is based on the market prices of the
securities the Fund holds. These prices change daily due to economic and other
events that affect securities markets generally, as well as those that affect
particular companies or governments. These price movements, sometimes called
volatility, will vary depending on the types of securities a Fund owns and the
markets where these securities trade.
LIKE OTHER INVESTMENTS, YOU COULD LOSE MONEY ON YOUR INVESTMENT IN A FUND. YOUR
INVESTMENT IN A FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK. IT IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY.
Each Fund has its own investment goal and strategies for reaching that goal.
However, it cannot be guaranteed that a Fund will achieve its goal. Before
investing, make sure that the Fund's goal matches your own.
The portfolio manager invests each Fund's assets in a way that the manager
believes will help the Fund achieve its goal. A manager's judgments about the
bond and stock markets, economy and companies, and his method of investment
selection, may cause a Fund to underperform other funds with similar objectives.
<PAGE> 5
PROSPECTUS
2
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
FUND SUMMARY
MONEY MARKET FUNDS
U.S. Treasury Fund
------------------------------------------------
INVESTMENT GOAL
Current income with liquidity and stability of
principal
INVESTMENT FOCUS
U.S. Treasury obligations and repurchase
agreements
PRINCIPAL INVESTMENT STRATEGY
Invests in short-term obligations of the U.S.
Treasury
SHARE PRICE VOLATILITY
Low
APPLE LOGO INVESTOR PROFILE
Short-term or highly risk averse investors who
want the added security of a U.S. Treasury money
market fund
INVESTMENT STRATEGY
The U.S. Treasury Fund seeks 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, all of which may be subject to
repurchase agreements. The Fund normally invests
at least 65% of its assets in U.S. Treasury
obligations, some of which may be repurchase
agreements. The Fund currently maintains an
average weighted portfolio maturity of 60 days
or less.
MATURITY: A
portfolio's
level of
interest rate exposure
is commonly indicated
by the term maturity.
Generally speaking, the
longer a portfolio's
maturity, the greater
its level of interest
rate exposure and, in
turn, its risk/return
potential.
<PAGE> 6
PROSPECTUS
3
U.S. Treasury Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Your investment in the Fund may be subject to the following principal risks:
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
Fund's yield will decrease due to a decline in interest rates.
- - NET ASSET VALUE RISK -- The risk that the Fund will be unable to meet its goal
of a constant $1 per share.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IT IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER SHARE, IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
graph
<CN>
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %.
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
<PAGE> 7
U.S. Treasury Fund (continued)
PROSPECTUS
4
FUND SUMMARIES
This table shows the Fund's average annual total returns for periods ending
December 31, 1998.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/5/90)
- --------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Fund % % %
- --------------------------------------------------------------------
</TABLE>
YIELD
All mutual funds must use the same formulas to calculate yield and effective
yield. The Fund typically advertises performance in terms of a 7-day yield and
7-day effective yield and may advertise total return. The 7-day yield quotation
more closely reflects current earnings of the Fund than the total return
quotation. The 7-day effective yield will be slightly higher than the yield
because of the compounding effect of the assumed reinvestment. Current yields
and effective yields fluctuate daily and will vary due to factors such as
interest rates and the quality, length of maturities, and type of investments in
the portfolio. The 7-day yield for the period ended , was %.
You may obtain the most current yield information for the Fund by calling
1-800-762-7085.
<PAGE> 8
PROSPECTUS
5
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
September 5, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
n/a
AMERICAN PERFORMANCE
FUND NUMBER
002
CUSIP NUMBER
028846109
TICKER SYMBOL
APGXX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 0%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%
(as a percentage of net asset value)
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.40%
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.31%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.96%*
- ------------------------------------------------
* During the last fiscal year, the Distributor
agreed to waive Distribution/Service (12b-1)
Fees by 0.25%. This fee waiver is expected to
continue through December 31, 2000.
Accordingly, actual annual fund operating
expenses were as follows:
Investment Advisory Fees 0.40%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.31%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.71%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 9
PROSPECTUS
6
FUND SUMMARIES
Cash Management Fund
------------------------------------------------
INVESTMENT GOAL
Current income with liquidity and stability of
principal
INVESTMENT FOCUS
High-quality money market instruments
PRINCIPAL INVESTMENT STRATEGY
Invests in high-quality, short-term debt
instruments
SHARE PRICE VOLATILITY
Low
INVESTOR PROFILE
Short-term or risk averse investors who are
looking for a money market fund that invests in
high-quality instruments
INVESTMENT STRATEGY
The Cash Management Fund seeks current income
with liquidity and stability of principal by
investing in money market instruments which
present minimal credit risks. The Fund invests
primarily in high-quality instruments including
obligations issued by the U.S. government or its
agencies or instrumentalities, commercial paper
APPLE LOGO (including Canadian Commercial Paper and
Europaper), dium-term notes, certificates of
deposit, time deposits, bankers' acceptances
and repurchase agreements. These obligations
may be variable or floating rate instruments or
variable amount master demand notes. To be
considered high- quality, a security must be
rated in one of the two highest credit quality
categories for short-term securities or
determined by the Fund's Adviser to be of
comparable quality. The Fund currently
maintains an average weighted portfolio
maturity of 35 to 75 days.
The Fund may, from time to time, concentrate its
investments in certain securities issued by U.S.
banks, U.S. branches of foreign banks and
foreign branches of U.S. banks.
MATURITY: A
portfolio's
level of
interest rate exposure
is commonly indicated
by the term maturity.
Generally speaking, the
longer a portfolio's
maturity, the greater
its level of interest
rate exposure and, in
turn, its risk/return
potential.
<PAGE> 10
PROSPECTUS
7
Cash Management Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Your investment in the Fund may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility that an issuer cannot make
timely interest and principal payments on its securities. Because the Fund
will only invest in securities believed to pose minimal credit risk, it is
unlikely that losses due to credit risk will cause a decline in the value of
your investment. However, even if not severe enough to cause such a decline in
principal value, credit losses could reduce the Fund's yield. In general,
lower-rated securities have higher credit risks.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
Fund's yield will decrease due to a decline in interest rates.
- - NET ASSET VALUE RISK -- The risk that the Fund will be unable to meet its goal
of a constant $1 per share.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IT IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER SHARE, IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
[GRAPH]
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %.
<PAGE> 11
Cash Management Fund (continued)
PROSPECTUS
8
FUND SUMMARIES
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
This table shows the Fund's average annual total returns for periods ending
December 31, 1998.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/21/90)
- --------------------------------------------------------------------
<S> <C> <C> <C>
Cash Management Fund % % %
- --------------------------------------------------------------------
</TABLE>
YIELD
All mutual funds must use the same formulas to calculate yield and effective
yield. The Fund typically advertises performance in terms of a 7-day yield and
7-day effective yield and may advertise total return. The 7-day yield quotation
more closely reflects current earnings of the Fund than the total return
quotation. The 7-day effective yield will be slightly higher than the yield
because of the compounding effect of the assumed reinvestment. Current yields
and effective yields fluctuate daily and will vary due to factors such as
interest rates and the quality, length of maturities, and type of investments in
the portfolio. For the period ended , the 7-day yield was %.
You may obtain the most current yield information for the Fund by calling
1-800-762-7085.
<PAGE> 12
PROSPECTUS
9
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
September 21, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
n/a
AMERICAN PERFORMANCE
FUND NUMBER
001
CUSIP NUMBER
028846202
TICKER SYMBOL
APCXX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 0%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%
(as a percentage of net asset value)
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.40%*
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.30%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.95%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.02% of its Investment Advisory Fees,
the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees, and the
Administrator waived 0.03% of Other Expenses.
These fee waivers are expected to continue
through December 31, 2000. Accordingly, actual
annual fund operating expenses were as
follows:
Investment Advisory Fees 0.38%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.27%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.65%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 13
PROSPECTUS
10
FUND SUMMARIES
Bond Fund
------------------------------------------------
APPLE LOGO
INVESTMENT GOAL
Total return
INVESTMENT FOCUS
U.S. government and investment grade corporate
debt securities and mortgage related securities
PRINCIPAL INVESTMENT STRATEGY
Attempts to allocate assets among various
markets, securities, and maturities which offer
the greatest potential return without assuming
unnecessary risk
SHARE PRICE VOLATILITY
Medium
INVESTOR PROFILE
Investors who are willing to accept higher price
fluctuations in order to receive income from
their investment that is typically higher than
that of an intermediate bond fund
INVESTMENT STRATEGY
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. To pursue this goal, the Fund
normally invests at least 65% of its assets in
bonds. The Fund invests primarily in investment
grade or comparable quality debt obligations
such as bonds, notes and debentures, and bills
issued by U.S. corporations or by the U.S.
government, its agencies, or instrumentalities,
mortgage-related securities, municipal
securities, asset-backed securities, and
derivatives. The Fund invests in debt
obligations only if they carry a rating within
the three highest rating categories assigned by
a nationally recognized statistical ratings
organization (e.g., at least "A" from Moody's or
Standard & Poor's). The Fund also invests in
money market instruments. If the rating of a
security is downgraded after purchase, the
Adviser will determine whether it is in the best
interest of the Fund's shareholders to continue
to hold the security. The Fund will seek to
increase the value of your investment through a
combination of income and capital gains.
CREDIT QUALITY:
A bond's credit
quality depends on the
issuer's ability to pay
interest on the bond
and to repay the debt.
Bonds issued or backed
by the U.S. government
offer maximum credit
protection; bonds
issued or backed by
foreign governments can
carry considerably more
risk. The lower the
bond's credit rating by
a rating agency (for
example, Moody's or
Standard & Poor's), the
greater the chance that
the bond issuer will
default, or fail to
meet its payment
obligations. The lower
a bond's credit rating,
the higher its yield
should be to compensate
investors for assuming
additional risk. Bonds
rated in one of the
four highest rating
categories are
considered "investment
grade."
<PAGE> 14
PROSPECTUS
11
The Fund will maintain a dollar-weighted average
portfolio maturity of seven years or more and,
generally, of no longer than ten years. The
APPLE LOGO average portfolio maturity will fluctuate
depending on the outlook for interest rate
changes. The ability to change the average
portfolio maturity allows the Fund to meet its
objective of maximizing total return.
In managing the portfolio, the manager uses a
"top down" investment management approach
focusing on actual or anticipated changes or
trends in interest rates, the financial markets,
or the economy.
In addition to the securities described above,
the Fund may invest in other debt securities.
The Fund may, from time to time, take temporary
defensive positions that are inconsistent with
the Fund's principal investment strategies in
attempting to respond to adverse market,
economic, political, or other conditions. In
these and in other cases, the Fund may not
achieve its investment goal.
APPLE LOGO
BOND
MATURITIES: A
bond is issued
with a specific
maturity date -- the
date when the bond's
issuer, or seller, must
pay back the bond's
initial value. Bond
maturities generally
range from less than
one year (short-term)
to 30 years
(long-term). The longer
a bond's maturity, the
more risk you, as a
bond investor, face as
interest rates
rise -- but also the
more interest you could
receive. Long-term
bonds are more suitable
for investors willing
to take greater risks
in hope of higher
yields; short-term bond
investors should be
willing to accept lower
yields in return for
less fluctuation in the
value of their
investment.
INTEREST RATES:
One of the most
significant
factors affecting the
performance of a bond
fund is the rise and
fall of interest rates.
When interest rates
rise, a bond's value
generally declines.
When interest rates
fall, its value
generally increases. As
a result, the greater a
fund's exposure to
interest rates, the
greater its risk and
return potential.
<PAGE> 15
PROSPECTUS
12
FUND SUMMARIES
Bond Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility that an issuer cannot make
timely interest and principal payments on its debt obligations, such as bonds.
In general, lower-rated bonds have higher credit risks. However, because the
Fund invests in investment grade debt obligations, credit risk is minimized.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
value of the Fund's investments will decline due to an increase in interest
rates. In general, the longer a security's maturity, the greater the interest
rate risk.
- - PREPAYMENT/CALL RISK -- Prepayment risk is the chance that the repayment of
mortgages backing a security will occur sooner than expected. Call risk is the
possibility that during periods of falling interest rates, a bond issuer will
"call" -- or repay -- its high-yielding bond before the bond's maturity date.
In each case, the Fund may be forced to reinvest in securities with a lower
yield. It may also lose any premium paid for the bond. Changes in
prepayment/call rates can result in greater price and yield volatility.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %. Sales charges are not
reflected in the bar chart and, if they were reflected, returns would be less
than those shown.
<PAGE> 16
Bond Fund (continued)
PROSPECTUS
13
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
This table compares the Fund's average annual total returns for periods ending
December 31, 1998 to those of the Salomon Brothers Broad (Investment Grade) Bond
Index.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/28/90)
- --------------------------------------------------------------------
<S> <C> <C> <C>
Bond Fund (reflects maximum sales
charge of 4.00%) % % %
- --------------------------------------------------------------------
Salomon Brothers Broad (Investment
Grade) Bond Index(1) % % %
- --------------------------------------------------------------------
</TABLE>
(1) The Salomon Brothers Broad (Investment Grade) Bond Index is an unmanaged
index comprised of investment grade corporate and U.S. government bonds.
<PAGE> 17
PROSPECTUS
14
FUND SUMMARIES
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
September 28, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform Bond
AMERICAN PERFORMANCE
FUND NUMBER
005
CUSIP NUMBER
028846301
TICKER SYMBOL
APBDX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 4.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge is imposed
against a redemption request relating to
shares purchased without a sales charge in
reliance upon the waiver accorded to
purchases in the amount of $1 million or
more, if the redemption request is made
within one year of the purchase date. Please
refer to the section titled "Your Account --
How Sales Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.55%*
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.37%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.17%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.20% of its Investment Advisory Fee.
This fee waiver is expected to continue
through December 31, 2000. Accordingly,
actual annual fund operating expenses were as
follows:
Investment Advisory Fees 0.35%
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.37%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.97%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 18
PROSPECTUS
15
Intermediate Bond Fund
------------------------------------------------
INVESTMENT GOAL
APPLE LOGO Total return
INVESTMENT FOCUS
U.S. government and investment grade corporate
debt securities and mortgage related securities
PRINCIPAL INVESTMENT STRATEGY
Attempts to allocate assets among various
markets, securities, and maturities which offer
the greatest potential return without assuming
unnecessary risk
SHARE PRICE VOLATILITY
Low to medium
INVESTOR PROFILE
Investors who are willing to accept price
fluctuation in order to receive income from
their investment that is typically higher than
that of a short-term bond fund or a money market
fund
INVESTMENT STRATEGY
The Intermediate Bond Fund seeks to maximize
total return by investing primarily in an
actively managed, diversified portfolio of
intermediate bond and other fixed income
securities. To pursue this goal, the Fund
normally invests at least 65% of its assets in
bonds. The Fund invests primarily in investment
grade or comparable quality debt obligations
such as bonds, notes and debentures, and bills
issued by U.S. corporations or the U.S.
government, its agencies, or instrumentalities,
mortgage-related securities, municipal
securities, asset-backed securities, and
derivatives. The Fund invests in debt
obligations only if they carry a rating within
the three highest rating categories assigned by
a nationally recognized statistical ratings
organization (e.g., at least "A" from Moody's or
Standard & Poor's). The Fund also invests in
money market instruments. If the rating of a
security is downgraded after purchase, the
Adviser will determine whether it is in the best
interest of the Fund's shareholders to continue
to hold the security. The Fund will seek to
increase the value of your investment through a
combination of income and capital gains.
CREDIT QUALITY:
A bond's credit
quality depends on the
issuer's ability to pay
interest on the bond
and to repay the debt.
Bonds issued or backed
by the U.S. government
offer maximum credit
protection; bonds
issued or backed by
foreign governments can
carry considerably more
risk. The lower the
bond's credit rating by
a rating agency (for
example, Moody's or
Standard & Poor's), the
greater the chance that
the bond issuer will
default, or fail to
meet its payment
obligations. The lower
a bond's credit rating,
the higher its yield
should be to compensate
investors for assuming
additional risk. Bonds
rated in one of the
four highest rating
categories are
considered "investment
grade."
<PAGE> 19
PROSPECTUS
16
FUND SUMMARIES
The Fund will maintain a dollar-weighted average
portfolio maturity from three to ten years, and
generally of no longer than five years. The
APPLE LOGO average portfolio maturity will fluctuate
depending on the outlook for interest rate
changes. The ability to change the average
portfolio maturity allows the Fund to meet its
objective of maximizing total return.
In managing the portfolio, the manager uses a
"top down" investment management approach
focusing on actual or anticipated changes or
trends in interest rates, the financial markets,
or the economy.
In addition to the securities described above,
the Fund may invest in other debt securities.
The Fund may from time to time, take temporary
defensive positions that are inconsistent with
the Fund's principal investment strategies in
attempting to respond to adverse market,
economic, political, or other conditions. In
these and in other cases, the Fund may not
achieve its investment goal.
APPLE LOGO
BOND
MATURITIES: A
bond is issued
with a specific
maturity date -- the
date when the bond's
issuer, or seller, must
pay back the bond's
initial value. Bond
maturities generally
range from less than
one year (short-term)
to 30 years
(long-term). The longer
a bond's maturity, the
more risk you, as a
bond investor, face as
interest rates
rise -- but also the
more interest you could
receive. Long-term
bonds are more suitable
for investors willing
to take greater risks
in hope of higher
yields; short-term bond
investors should be
willing to accept lower
yields in return for
less fluctuation in the
value of their
investment.
INTEREST RATES:
One of the most
significant
factors affecting the
performance of a bond
fund is the rise and
fall of interest rates.
When interest rates
rise, a bond's value
generally declines.
When interest rates
fall, its value
generally increases. As
a result, the greater a
fund's exposure to
interest rates, the
greater its risk and
return potential.
<PAGE> 20
PROSPECTUS
17
Intermediate Bond Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility that an issuer cannot make
timely interest and principal payments on its debt obligations, such as bonds.
In general, lower-rated bonds have higher credit risks. However, because the
Fund invests in investment grade debt obligations, credit risk is minimized.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
value of the Fund's investments will decline due to an increase in interest
rates. In general, the longer a security's maturity, the greater the interest
rate risk.
- - PREPAYMENT/CALL RISK -- Prepayment risk is the chance that the repayment of
mortgages backing a security will occur sooner than expected. Call risk is the
possibility that during periods of falling interest rates, a bond issuer will
"call" -- or repay -- its high-yielding bond before the bond's maturity date.
In each case, the Fund may be forced to reinvest in securities with a lower
yield. It may also lose any premium paid for the bond. Changes in
prepayment/call rates can result in greater price and yield volatility.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
GRAPH
<PAGE> 21
Intermediate Bond Fund (continued)
PROSPECTUS
18
FUND SUMMARIES
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %. Sales charges are not
reflected in the bar chart and, if they were reflected, returns would be less
than those shown.
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
This table compares the Fund's average annual total returns for periods ending
December 31, 1998 to those of the Lehman Brothers Intermediate
Government/Corporate Bond Index.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/28/90)
- --------------------------------------------------------------------
<S> <C> <C> <C>
Intermediate Bond Fund (reflects % % %
maximum sales charge of 3.00%)
- --------------------------------------------------------------------
Lehman Brothers Intermediate % % %
Government/Corporate Bond
Index(1)
- --------------------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Intermediate Government/Corporate Bond Index is an
unmanaged index comprised of investment grade government and corporate debt
securities with maturities between 1 and 10 years.
<PAGE> 22
PROSPECTUS
19
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
September 28, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform IntBd
AMERICAN PERFORMANCE
FUND NUMBER
006
CUSIP NUMBER
028846400
TICKER SYMBOL
APFBX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 3.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge is imposed
against a redemption request relating to
shares purchased without a sales charge in
reliance upon the waiver accorded to
purchases in the amount of $1 million or
more, if the redemption request is made
within one year of the purchase date. Please
refer to the section titled "Your
Account -- How Sales Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.55%*
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.37%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.17%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.20% of its Investment Advisory Fees.
This waiver is expected to continue through
December 21, 2000. Accordingly, actual annual
fund operating expenses were as follows:
Investment Advisory Fees 0.35%
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.37%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.97%
- ------------------------------------------------
<PAGE> 23
PROSPECTUS
20
FUND SUMMARIES
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 24
PROSPECTUS
21
Intermediate Tax-Free Bond Fund
------------------------------------------------
INVESTMENT GOAL
High current income exempt from federal income
APPLE LOGO tax
INVESTMENT FOCUS
Municipal securities
PRINCIPAL INVESTMENT STRATEGY
Invests in investment grade municipal securities
SHARE PRICE VOLATILITY
Low to medium
INVESTOR PROFILE
Investors who want income exempt from federal
income tax
INVESTMENT STRATEGY
The Intermediate Tax-Free Bond Fund seeks
current income, consistent with the preservation
of capital, that is exempt from federal income
taxes, by investing in a diversified portfolio
of intermediate term bonds and other fixed
income securities.
In pursuing this goal, the Fund invests at least
65% of its assets in investment grade or
comparable quality municipal bonds and
debentures. Additionally, the Fund will normally
invest at least 80% of its assets in municipal
securities which pay interest that is not
subject to federal income tax or federal
alternative minimum tax for shareholders who are
individuals. The Fund invests in municipal
securities which are within the three highest
rating groups assigned by a nationally
recognized statistical ratings organization
(NRSRO), in the case of bonds (e.g. at least A
APPLE LOGO 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., "VMIG-1" by Moody's).
CREDIT QUALITY:
A bond's credit
quality depends
on the issuer's
ability to pay interest
on the bond and to
repay the debt. Bonds
issued or backed by the
U.S. government offer
maximum credit
protection; bonds
issued or backed by
foreign governments can
carry considerably more
risk. The lower the
bond's credit rating by
a rating agency (for
example, Moody's or
Standard & Poor's), the
greater the chance that
the bond issuer will
default, or fail to
meet its payment
obligations. The lower
a bond's credit rating,
the higher its yield
should be to compensate
investors for assuming
additional risk. Bonds
rated in one of the
four highest rating
categories are
considered "investment
grade."
MUNICIPAL BONDS
are securities
issued by state
and local
governments and
regional governmental
authorities as a way of
raising money for
public construction
projects (for example,
highways, airports, or
housing); for operating
expenses; or for loans
to public institutions
and facilities.
<PAGE> 25
PROSPECTUS
22
FUND SUMMARIES
Corporate shareholders will be required to
include all tax-exempt interest dividends in
determining their federal alternative minimum
APPLE LOGO tax. The Fund will generally invest in two
principal classifications of municipal
securities: general obligation securities and
revenue securities. The Fund will also utilize
credit enhancers. The Fund also invests in money
market instruments. If the rating of a security
is downgraded after purchase, the adviser will
determine whether it is in the best interest of
the Fund's shareholders to continue to hold the
security.
APPLE LOGO
GENERAL
OBLIGATION
SECURITIES AND
REVENUE SECURITIES.
General obligation
securities are
municipal securities
backed by the full
faith and credit and
taxing power of a
municipality for the
payment of their
principal and interest.
In contrast, revenue
securities are
municipal securities
issued to finance
public works and
payable only from the
revenues derived from
the project being
financed.
CREDIT
ENHANCER: Debt
issuers utilize
credit enhancers to
raise the credit rating
of their offering,
thereby lower their
interest costs. A
municipality may have
their bond insured by a
large insurance
company, thereby
raising the bond's
credit rating to AAA. A
corporate bond issuer
may arrange for a bank
letter of credit to
back its issue, raising
its rating to AAA.
<PAGE> 26
PROSPECTUS
23
The Fund will maintain a dollar-weighted average
portfolio maturity between three to ten years.
The average portfolio maturity will fluctuate
APPLE LOGO depending on the outlook for interest rate
changes. The ability to change the average
portfolio maturity allows the Fund to meet its
objective of providing high current income with
preservation of capital.
In managing the portfolio, the manager uses a
"top down" investment management approach
focusing on actual or anticipated changes or
trends in interest rates, the financial markets,
or the economy.
In addition to the securities described above,
the Fund may invest in other debt securities.
The Fund may, from time to time, take temporary
defensive positions that are inconsistent with
the Fund's principal investment strategies in
attempting to respond to adverse market,
economic, political, or other conditions. In
these and in other cases, the Fund may not
achieve its investment goal.
APPLE LOGO
BOND
MATURITIES: A
bond is issued
with a specific
maturity date -- the
date when the bond's
issuer, or seller, must
pay back the bond's
initial value. Bond
maturities generally
range from less than
one year (short-term)
to 30 years
(long-term). The longer
a bond's maturity, the
more risk you, as a
bond investor, face as
interest rates
rise -- but also the
more interest you could
receive. Long-term
bonds are more suitable
for investors willing
to take greater risks
in hope of higher
yields; short-term bond
investors should be
willing to accept lower
yields in return for
less fluctuation in the
value of their
investment.
INTEREST RATES:
One of the most
significant
factors affecting the
performance of a bond
fund is the rise and
fall of interest rates.
When interest rates
rise, a bond's value
generally declines.
When interest rates
fall, its value
generally increases. As
a result, the greater a
fund's exposure to
interest rates, the
greater its risk and
return potential.
<PAGE> 27
PROSPECTUS
24
FUND SUMMARIES
Intermediate Tax-Free Bond Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - CREDIT ENHANCEMENT RISK -- Credit enhancement risk involves the possibility
that a "credit enhancer," such as a letter of credit, declines in quality and
therefore leads to a decrease in the value of the Fund's investments.
- - CREDIT RISK -- Credit risk is the possibility that an issuer cannot make
timely interest and principal payments on its debt obligations, such as bonds.
In general, lower-rated bonds have higher credit risks. However, because the
Fund invests in investment grade debt obligations, credit risk is minimized.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
value of the Fund's investments will decline due to an increase in interest
rates. In general, the longer a security's maturity, the greater the interest
rate risk.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
[GRAPH]
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %. Sales charges are not
reflected in the bar chart and, if they were reflected, returns would be less
than those shown.
<PAGE> 28
Intermediate Tax-Free Bond Fund (continued)
PROSPECTUS
25
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
This table compares the Fund's average annual total returns for periods ending
December 31, 1998 to those of the Lehman Brothers Municipal Bond Index.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (5/29/92)
- --------------------------------------------------------------------
<S> <C> <C> <C>
Intermediate Tax-Free Bond Fund % % %
(reflects maximum sales charge of
3.00%)
- --------------------------------------------------------------------
Lehman Brothers Municipal Bond % % %
Index(1)
- --------------------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Municipal Bond Index is an unmanaged index considered to
be representative of the municipal bond market as a whole.
<PAGE> 29
PROSPECTUS
26
FUND SUMMARIES
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
May 29, 1992
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
No
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform IntmTxF
AMERICAN PERFORMANCE
FUND NUMBER
003
CUSIP NUMBER
028846509
TICKER SYMBOL
APTFX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 3.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge is imposed
against a redemption request relating to
shares purchased without a sales charge in
reliance upon the waiver accorded to
purchases in the amount of $1 million or
more, if the redemption request is made
within one year of the purchase date. Please
refer to the section titled "Your Account --
How Sales Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.55%*
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.40%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.20%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.20% of its Investment Advisory Fees
and the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees. These fee
waivers are expected to continue through
December 31, 2000. Accordingly, actual annual
fund operating expenses were as follows:
Investment Advisory Fees 0.35%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.40%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.75%
- ------------------------------------------------
<PAGE> 30
PROSPECTUS
27
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 31
PROSPECTUS
28
FUND SUMMARIES
Short-Term Income Fund
------------------------------------------------
APPLE LOGO
INVESTMENT GOAL
Total return
INVESTMENT FOCUS
U.S. government and investment grade corporate
debt securities and mortgage related securities
PRINCIPAL INVESTMENT STRATEGY
Attempts to allocate assets among various
markets, securities, and maturities which offer
the greatest potential return without assuming
unnecessary risk
SHARE PRICE VOLATILITY
Low to Medium
INVESTOR PROFILE
Investors who are willing to accept price
fluctuation in order to receive income from
their investment that is typically higher than
that of a money market fund
INVESTMENT STRATEGY
The Short-Term Income Fund seeks to maximize
total return by investing primarily in an
actively managed, diversified portfolio of
short-term bonds and other fixed income
securities. To pursue this goal, the Fund
normally invests at least 65% of its assets in
bonds. The Fund invests primarily in investment
grade or comparable quality debt obligations
such as bonds, notes and debentures, and bills
issued by U.S. corporations or by the U.S.
government, its agencies, or instrumentalities,
mortgage-related securities, municipal
securities, asset-backed securities, and
derivatives. The Fund invests in debt
obligations only if they carry a rating within
the three highest rating categories assigned by
a nationally recognized statistical ratings
organization (e.g., at least "A" from Moody's or
Standard & Poor's). The Fund also invests in
money market instruments. If the rating of a
security is downgraded after purchase, the
Adviser will determine whether it is in the best
interest of the Fund's shareholders to continue
to hold the security. The Fund will seek to
increase the value of your investment through a
combination of income and capital gains.
CREDIT QUALITY:
A bond's credit
quality depends on the
issuer's ability to pay
interest on the bond
and to repay the debt.
Bonds issued or backed
by the U.S. government
offer maximum credit
protection; bonds
issued or backed by
foreign governments can
carry considerably more
risk. The lower the
bond's credit rating by
a rating agency (for
example, Moody's or
Standard & Poor's), the
greater the chance that
the bond issuer will
default, or fail to
meet its payment
obligations. The lower
a bond's credit rating,
the higher its yield
should be to compensate
investors for assuming
additional risk. Bonds
rated in one of the
four highest rating
categories are
considered "investment
grade."
<PAGE> 32
PROSPECTUS
29
The Fund will maintain a dollar-weighted average
portfolio maturity of three years or less. The
average portfolio maturity will fluctuate
APPLE LOGO depending on the outlook for interest rate
changes. The ability to change the average
portfolio maturity allows the Fund to meet its
objective of maximizing total return.
In managing the portfolio, the manager uses a
"top down" investment management approach
focusing on actual or anticipated changes or
trends in interest rates, the financial markets,
or the economy.
In addition to the securities described above,
the Fund may invest in other debt securities.
The Fund may from time to time, take temporary
defensive positions that are inconsistent with
the Fund's principal investment strategies in
attempting to respond to adverse market,
economic, political, or other conditions. In
these and in other cases, the Fund may not
achieve its investment goal.
APPLE LOGO
BOND
MATURITIES: A
bond is issued
with a specific
maturity date -- the
date when the bond's
issuer, or seller, must
pay back the bond's
initial value. Bond
maturities generally
range from less than
one year (short-term)
to 30 years
(long-term). The longer
a bond's maturity, the
more risk you, as a
bond investor, face as
interest rates
rise -- but also the
more interest you could
receive. Long-term
bonds are more suitable
for investors willing
to take greater risks
in hope of higher
yields; short-term bond
investors should be
willing to accept lower
yields in return for
less fluctuation in the
value of their
investment.
INTEREST RATES:
One of the most
significant
factors affecting the
performance of a bond
fund is the rise and
fall of interest rates.
When interest rates
rise, a bond's value
generally declines.
When interest rates
fall, its value
generally increases. As
a result, the greater a
fund's exposure to
interest rates, the
greater its risk and
return potential.
<PAGE> 33
PROSPECTUS
30
FUND SUMMARIES
Short-Term Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility that an issuer cannot make
timely interest and principal payments on its debt obligations, such as bonds.
In general, lower-rated bonds have higher credit risks. However, because the
Fund invests in investment grade debt obligations, credit risk is minimized.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
value of the Fund's investments will decline due to an increase in interest
rates. In general, the longer a security's maturity, the greater the interest
rate risk.
- - PREPAYMENT/CALL RISK -- Prepayment risk is the chance that the repayment of a
mortgage will occur sooner than expected. Call risk is the possibility that
during periods of falling interest rates, a bond issuer will "call" -- or
repay -- its high-yielding bond before the bond's maturity date. In each case,
the Fund may be forced to reinvest in securities with a lower yield. Changes
in prepayment/call rates can result in greater price and yield volatility.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
[GRAPH]
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/99 to 9/30/99 was %. Sales charges are not
reflected in the bar chart and, if they were reflected, returns would be less
than those shown.
<PAGE> 34
Short-Term Fund (continued)
PROSPECTUS
31
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
This table compares the Fund's average annual total returns for periods ending
December 31, 1998 to those of the Merrill Lynch U.S. Government/Corporate Bond
Index.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/28/90)
- --------------------------------------------------------------------
<S> <C> <C> <C>
Short-Term Income Fund (reflects a
maximum sales charge of 2.00%) % % %
- --------------------------------------------------------------------
Merrill Lynch U.S.
Government/Corporate 1-5 Year
Bond Index(1) % % %
- --------------------------------------------------------------------
</TABLE>
(1) The Merrill Lynch U.S. Government/Corporate 1-5 Year Bond Index is an
unmanaged index comprised of investment grade government and corporate debt
securities with maturities between 1 and 5 years.
<PAGE> 35
PROSPECTUS
32
FUND SUMMARIES
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
October 19, 1994
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform ShTrInc
AMERICAN PERFORMANCE
FUND NUMBER
008
CUSIP NUMBER
028846806
TICKER SYMBOL
APSTX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 2.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge is imposed
against a redemption request relating to
shares purchased without a sales charge in
reliance upon the waiver accorded to
purchases in the amount of $1 million or
more, if the redemption request is made
within one year of the purchase date. Please
refer to the section titled "Your Account --
How Sales Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.55%*
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.44%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.24%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.55% of its Investment Advisory Fee
and the Distributor waived % of its
Distribution/Service (12b-1) Fees. These
waivers are expected to continue through
December 31, 2000. Accordingly, actual annual
fund operating expenses were as follows:
Investment Advisory Fees 0.00%
Distribution/Service (12b-1) Fees %
Other Expenses %
TOTAL ANNUAL FUND OPERATING EXPENSES 0.56%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 36
PROSPECTUS
33
Equity Fund
------------------------------------------------
INVESTMENT GOAL
Growth of capital. Income is secondary.
INVESTMENT FOCUS
U.S. common stocks
PRINCIPAL INVESTMENT STRATEGY
Attempts to identify stocks of both undervalued
companies and growth companies using a
quantitative securities selection process
SHARE PRICE VOLATILITY
APPLE LOGO Medium to high
INVESTOR PROFILE
Investors with long-term investment goals who
are looking primarily for growth of capital and
secondarily for income
INVESTMENT STRATEGY
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.
To pursue this goal, the Fund invests primarily
in equity securities of U.S. companies, focusing
on large capitalization value and growth stocks.
The Fund employs a quantitative investment
approach whereby individual stocks are ranked
according to their relative price strength,
relative value, earnings momentum, and earnings
estimate revisions. Additional criteria the
manager uses to select particular stocks include
volatility, momentum, size, trading activity,
growth, earnings yield, value, earnings
variability, leverage, currency sensitivity, and
dividend yield. Economic conditions may warrant
the consideration of other factors when ranking
individual stocks.
THE S&P 500
INDEX consists
of 500 domestic stocks
chosen for market size,
liquidity and industry
group representations.
As of the date of this
Prospectus, the S&P 500
Index statistics were
as follows: the
smallest company had a
market value of $505
million, the largest
company a market value
of $472 billion, the
mean market value was
$22 billion, and the
weighted average market
value was $107 billion.
<PAGE> 37
PROSPECTUS
34
FUND SUMMARIES
Equity Fund (continued)
In managing the Fund's portfolio, the manager attempts to match the risk
characteristics of the stocks comprising the S&P 500 Index. The Fund does not
seek to match the performance of the S&P 500 Index, nor does it limit its
investments to stocks in that index.
In addition to the securities described above, the Fund may invest in money
market instruments, U.S. Treasury obligations, and other types of equity and
debt securities.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with the Fund's principal investment strategies in attempting to
respond to adverse market, economic, political, or other conditions. In these
and in other cases, the Fund may not achieve its investment goal.
The Fund intends to refocus its investment strategy to an exclusively value
investment style in the upcoming fiscal year. Shareholders will be informed upon
the implementation of this refinement.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - INVESTMENT STYLE RISK -- Investment style risk is the possibility that returns
from large capitalization stocks will trail returns from other asset classes
or the overall stock market.
- - MARKET RISK -- Market risk is the possibility that the Fund's investments in
equity securities will decline because of drops in the stock market. Stock
markets tend to move in cycles, with periods of either rising or falling
prices. The value of your investment will go up or down in response to these
movements.
- - The Fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and may increase the amount of taxes that
you pay.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
<PAGE> 38
Equity Fund (continued)
PROSPECTUS
35
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
[GRAPH]
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %. Sales charges are not
reflected in the bar chart and, if they were reflected, returns would be less
than those shown.
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
This table compares the Fund's average annual total returns for periods ending
December 31, 1998 to those of the S&P 500 Index.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/21/90)
- --------------------------------------------------------------------
<S> <C> <C> <C>
Equity Fund (reflects maximum sales
charge of 5.00%) % % %
- --------------------------------------------------------------------
S&P 500 Index (1) % % %
- --------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index generally representative of the
performance of large companies in the U.S. stock market.
<PAGE> 39
PROSPECTUS
36
FUND SUMMARIES
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
quarterly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
September 28, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform Equity
AMERICAN PERFORMANCE
FUND NUMBER
004
CUSIP NUMBER
028846608
TICKER SYMBOL
APEQX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 5.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge is imposed
against a redemption request relating to
shares purchased without a sales charge in
reliance upon the waiver accorded to
purchases in the amount of $1 million or
more, if the redemption request is made
within one year of the purchase date. Please
refer to the section titled "Your Account --
How Sales Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.69%*
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.33%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.27%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.19% of its Investment Advisory Fees.
This fee waiver is expected to continue
through December 31, 2000. Accordingly, actual
annual fund operating expenses were as
follows:
Investment Advisory Fees 0.50%
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.33%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.08%
- ------------------------------------------------
<PAGE> 40
PROSPECTUS
37
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$-- $ -- $ -- $ --
</TABLE>
<PAGE> 41
PROSPECTUS
38
FUND SUMMARIES
Balanced Fund
------------------------------------------------
INVESTMENT GOAL
Capital appreciation and income
INVESTMENT FOCUS
U.S. common stocks and investment grade bonds
PRINCIPAL INVESTMENT STRATEGY
Maintain an optimal mix of stocks and debt
securities to maximize capital appreciation and
income
SHARE PRICE VOLATILITY
APPLE LOGO Moderate
INVESTOR PROFILE
Investors who want the growth potential of
equities combined with the lower volatility of
fixed income securities
INVESTMENT STRATEGY
The Balanced Fund seeks capital appreciation and
income by investing primarily in a broadly
diversified portfolio of securities, including
common stocks, preferred stocks and bonds. To
pursue this goal, the Fund normally invests
between 50% and 75% of its assets in equity
securities and at least 25% of its assets in
investment grade or comparable quality debt
obligations.
The equity portion of the Fund primarily
consists of large and small capitalization
stocks of both undervalued companies and
companies with above average growth potential.
In selecting equity securities, the Fund employs
a quantitative investment approach whereby
individual stocks are ranked according to their
relative price strength, relative value,
earnings momentum, and earnings estimate
revisions. Economic conditions may warrant the
consideration of other factors when ranking
individual stocks.
BALANCED FUNDS
are generally
"middle-of-the-road"
investments that seek
to provide some
combination of growth,
income, and
conservation of capital
by investing in a mix
of stocks, bonds,
and/or money market
instruments. Because
the prices of stocks
and bonds often move in
different directions,
balanced funds are able
to use rewards from one
type of investment to
help offset the
risks from another.
<PAGE> 42
PROSPECTUS
39
Balanced Fund (continued)
The debt portion of the Fund primarily consists of bonds, notes and debentures,
and bills issued by U.S. corporations or the U.S. government, its agencies, or
instrumentalities, mortgage-related securities, and asset-backed securities. The
Fund also invests in money market instruments. If the rating of a security is
downgraded after purchase, the Adviser will determine whether it is in the best
interest of the Fund's shareholders to continue to hold the security.
The portion of the Fund's assets invested in equity and debt securities will
vary in accordance with economic conditions, the level of stock prices, interest
rates, and the risk associated with each investment medium.
In addition to the securities described above, the Fund may invest in other
equity and debt securities. The Fund may from time to time, take temporary
defensive positions that are inconsistent with the Fund's principal investment
strategies in attempting to respond to adverse market, economic, political, or
other conditions. In these and in other cases, the Fund may not achieve its
investment goal.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility that an issuer cannot make
timely interest and principal payments on its debt obligations, such as bonds.
In general, lower-rated bonds have higher credit risks. However, because the
Fund invests in investment grade debt obligations, credit risk is minimized.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
value of the Fund's investments will decline due to an increase in interest
rates. Generally, an increase in the average maturity of the fixed income
portion of the Fund will make it more sensitive to interest rate risk.
- - MARKET RISK -- Market risk is the possibility that the Fund's investments in
equity securities will decline because of drops in the stock market. Stock
markets tend to move in cycles, with periods of either rising or falling
prices. The value of your investment will go up or down in response to these
movements.
- - PORTFOLIO BALANCING RISK -- Portfolio balancing risk is the possibility that
the portfolio manager will not accurately assess the optimal mix of stocks and
debt securities and therefore will underperform other balanced funds.
- - To the extent that the Fund makes investments with additional risks, those
risks could increase volatility or reduce performance. The Fund may trade
securities actively, which could increase its transaction costs (thus lowering
performance) and may increase the amount of taxes that you pay.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
<PAGE> 43
Balanced Fund (continued)
PROSPECTUS
40
FUND SUMMARIES
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
[GRAPH]
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %. Sales charges are not
reflected in the bar chart and, if they were reflected, returns would be less
than those shown.
<TABLE>
<S> <C> <C>
Best Quarter
Worst Quarter
</TABLE>
This table compares the Fund's average annual total returns for periods ending
December 31, 1998 to those of the S&P 500 Index and the Salomon Brothers Broad
(Investment Grade) Bond Index.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year (6/1/95)
- -------------------------------------------------------------------
<S> <C> <C>
Balanced Fund (reflects maximum sales charge
of 5.00%) % %
- -------------------------------------------------------------------
S&P 500 Index(1) % %
- -------------------------------------------------------------------
Salomon Brothers Broad (Investment Grade)
Bond Index(2) % %
- -------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index generally representative of the
performance of large companies in the U.S. stock market.
(2) The Salomon Brothers Broad (Investment Grade) Bond Index is an unmanaged
index comprised of investment-grade corporate and U.S. government bonds.
<PAGE> 44
PROSPECTUS
41
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
quarterly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
June 1, 1995
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform Balan
AMERICAN PERFORMANCE
FUND NUMBER
009
CUSIP NUMBER
028846889
TICKER SYMBOL
APBAX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 5.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge is imposed
against a redemption request relating to
shares purchased without a sales charge in
reliance upon the waiver accorded to
purchases in the amount of $1 million or
more, if the redemption request is made
within one year of the purchase date. Please
refer to the section titled "Your Account --
How Sales Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.74%*
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses %
TOTAL ANNUAL FUND OPERATING EXPENSES 1.35%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived % of its Investment Advisory Fees
and the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees. These fee
waivers are expected to continue through
December 31, 2000. Accordingly, actual annual
fund operating expenses were as follows:
Investment Advisory Fees %
Distribution/Service (12b-1) Fees 0.00%
Other Expenses %
TOTAL ANNUAL FUND OPERATING EXPENSES 0.67%
- ------------------------------------------------
<PAGE> 45
PROSPECTUS
42
FUND SUMMARIES
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$-- $ -- $ -- $ --
</TABLE>
<PAGE> 46
PROSPECTUS
43
Growth Equity Fund
------------------------------------------------
INVESTMENT GOAL
Long-term capital appreciation
APPLE LOGO
INVESTMENT FOCUS
U.S. common stocks
PRINCIPAL INVESTMENT STRATEGY
Attempts to identify large capitalization stocks
with above-average growth potential using a
quantitative securities selection process
SHARE PRICE VOLATILITY
Moderate to high
INVESTOR PROFILE
Investors with long-term investments goals who
are looking for capital appreciation and who do
not need current income
INVESTMENT STRATEGY
The Growth Equity Fund seeks long-term capital
appreciation by investing primarily in a
diversified portfolio of common stocks and
securities convertible into common stocks.
To pursue this goal, the Fund invests primarily
in a universe of equity securities of large U.S.
APPLE LOGO companies above a given market capitalization,
currently $1 billion, which exhibit growth
characteristics.
The Fund employs a quantitative investment
approach whereby individual stocks are ranked
according to their relative price strength,
relative value, earnings momentum, earnings
estimate revisions, return on equity, past
growth, earnings per share and sales per share,
and future estimated earnings per share growth.
Economic conditions may warrant the
consideration of other factors when ranking
individual stocks. The Fund will exhibit
volatility similar to the S&P 500/BARRA Growth
Index and slightly higher than the S&P 500
Index.
GROWTH FUNDS:
Growth
investing
focuses on
companies
believed to have
above-average potential
for growth in revenue
and earnings.
Reflecting the market's
high expectations for
superior growth, the
prices of such stocks
are typically above-
average in relation to
such measures as
revenue, earnings, book
value, and dividends.
In general, growth
funds appeal to
investors who will
accept more volatility
in hopes of a greater
increase in share
price. Growth funds may
also appeal to
investors with taxable
accounts who want a
higher proportion of
returns to come as
capital gains (which
may be taxed at lower
rates than dividend
income).
THE S&P 500/
BARRA GROWTH
INDEX consists
of those
domestic stocks
included in the S&P 500
Index which adhere to a
growth investment
style. As of the date
of this Prospectus, the
S&P 500/ BARRA Growth
Index statistics were
as follows: the
smallest company had a
market value of $692
million, the largest
company a market value
of $472 billion, the
mean market value was
$45 billion, and the
weighted average market
value was $157 billion.
<PAGE> 47
PROSPECTUS
44
FUND SUMMARIES
Growth Equity Fund (continued)
In addition to the securities described above, the fund may invest in money
market instruments, U.S. Treasury obligations and other types of equity and debt
securities.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with the Fund's principal investment strategies, in attempting to
respond to adverse market, economic, political, or other conditions. In these
and in other cases, the Fund may not achieve its investment goal.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - INVESTMENT STYLE RISK -- Investment style risk is the possibility that returns
from large capitalization growth stocks will trail returns from other asset
classes or the overall stock market.
- - MARKET RISK -- Market risk is the possibility that the Fund's investments in
equity securities will decline because of drops in the stock market. Stock
markets tend to move in cycles, with periods of either rising or falling
prices. The value of your investment will go up or down in response to these
movements.
- - The Fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and may increase the amount of taxes that
you pay.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
The bar chart and the performance table below give some indication of the risks
and volatility of an investment in the Fund. Of course, the Fund's past
performance does not necessarily indicate how the Fund will perform in the
future.
<PAGE> 48
Growth Equity Fund (continued)
PROSPECTUS
45
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
[GRAPH]
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %. Sales charges are not
reflected in the bar chart and, if they were reflected, returns would be less
than those shown.
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
This table compares the Fund's average annual total returns for periods ending
December 31, 1998 to those of the S&P 500 Index and the S&P/BARRA Growth Index.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year (11/1/97)
- -------------------------------------------------------------------
<S> <C> <C>
Growth Equity Fund
(reflects a maximum sales charge of 5.00%) % %
- -------------------------------------------------------------------
S&P 500 Index(1) % %
- -------------------------------------------------------------------
S&P 500/BARRA Growth Index(2) % %
- -------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index generally representative of the
performance of large companies in the U.S. stock market.
(2) The S&P 500/BARRA Growth Index is an unmanaged index generally
representative of the performance of large growth companies in the U.S.
stock market.
<PAGE> 49
PROSPECTUS
46
FUND SUMMARIES
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
quarterly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
November 1, 1997
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform GroEq
AMERICAN PERFORMANCE
FUND NUMBER
010
CUSIP NUMBER
028846871
TICKER SYMBOL
APGEX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 5.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge is imposed
against a redemption request relating to
shares purchased without a sales charge in
reliance upon the waiver accorded to
purchases in the amount of $1 million or
more, if the redemption request is made
within one year of the purchase date. Please
refer to the section titled "Your Account --
How Sales Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.69%*
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.34%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.28%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.19% of its Investment Advisory Fees.
This fee waiver is expected to continue
through December 31, 2000. Accordingly, actual
annual fund operating expenses were as
follows:
Investment Advisory Fees 0.50%
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.34%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.09%
- ------------------------------------------------
<PAGE> 50
PROSPECTUS
47
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 51
PROSPECTUS
48
FUND SUMMARIES
Small Cap Equity Fund
------------------------------------------------
INVESTMENT GOAL
Long-term capital appreciation and, secondarily,
income
APPLE LOGO
INVESTMENT FOCUS
U.S. small cap common stocks
PRINCIPAL INVESTMENT STRATEGY
Attempts to identify stocks of both undervalued
small capitalization companies and small
capitalization companies with above average
growth potential using a quantitative securities
selection process
SHARE PRICE VOLATILITY
High
INVESTOR PROFILE
Risk tolerant investors who are looking for
capital appreciation
INVESTMENT STRATEGY
The Small Cap Equity Fund seeks long-term
capital appreciation and, secondarily, income by
investing primarily in a diversified portfolio
of common stocks and securities convertible into
APPLE LOGO common stocks of small-size companies. To pursue
this goal, the Fund primarily invests in equity
securities of small capitalization U.S.
companies believed to be undervalued, or present
above average growth potential. The Fund employs
a quantitative investment approach whereby
individual stocks are ranked according to their
relative price strength, earnings estimate
revisions, book-to-price, sales-to-price, and
cash flow to price. Additional criteria the
manager uses to select particular stocks include
volatility, momentum, size, trading activity,
growth, earnings yield, value, earnings
variability, leverage, currency sensitivity, and
dividend yield. Economic conditions may warrant
the consideration of other factors when ranking
individual stocks.
In managing the Fund's portfolio, the portfolio
will be constructed to exhibit investment
characteristics of the stocks comprising the S&P
Small Cap 600 Index, and investments in stocks
will be limited to the stocks within the Index.
SMALL-CAP
STOCKS: Stocks
of publicly
traded companies -- and
mutual funds that hold
these stocks -- can be
classified by the
companies' market
value, or
capitalization.
Small-cap funds
typically hold stocks
of companies with a
market value of less
than $1 billion.
THE S&P SMALL
CAP 600 INDEX
consists of 600
domestic stocks chosen
for market size,
liquidity and industry
group representations.
As of the date of this
Prospectus, the S&P 600
Index statistics were
as follows: the
smallest company had a
market value of $25
million, the largest
company a market value
of $2.6 billion, the
mean market value was
$558 million, and the
weighted average market
value was
$872 million.
<PAGE> 52
PROSPECTUS
49
Small Cap Equity Fund (continued)
In addition to the securities described above, the Fund may invest in money
market instruments, U.S. Treasury obligations, and other types of equity and
debt securities.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with the Fund's principal investment strategies in attempting to
respond to adverse market, economic, political, or other conditions. In these
and in other cases, the Fund may not achieve its investment goal.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - INVESTMENT STYLE RISK -- Investment style risk is the possibility that returns
from small capitalization value and growth stocks will trail returns from
other asset classes or the overall stock market.
- - MARKET RISK -- Market risk is the possibility that the Fund's investments in
equity securities will decline because of drops in the stock market. Stock
markets tend to move in cycles, with periods of either rising or falling
prices. The value of your investment will go up or down in response to these
movements.
- - SMALL CAP SECURITIES RISK -- Small cap securities risk involves the greater
risk of investing in smaller, less well-known companies, especially those that
have a narrow product line or are traded infrequently, than investing in
established companies with proven track records.
- - The Fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and may increase the amount of taxes that
you pay.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
A bar chart and the performance are not included for the Small Cap Equity Fund
because the Fund did not commence operations until 2/17/99. However, the Fund's
total return, excluding sales charges, from 2/17/99 through 9/30/99 was %.
Of course, the Fund's past performance does not necessarily indicate how the
Fund will perform in the future.
<PAGE> 53
PROSPECTUS
50
FUND SUMMARIES
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
quarterly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE:
February 17, 1999
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
n/a
AMERICAN PERFORMANCE
FUND NUMBER
011
CUSIP NUMBER
028846863
TICKER SYMBOL
n/a
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 5.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge is imposed
against a redemption request relating to
shares purchased without a sales charge in
reliance upon the waiver accorded to
purchases in the amount of $1 million or
more, if the redemption request is made
within one year of the purchase date. Please
refer to the section titled "Your Account --
How Sales Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.69%*
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.56%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.50%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.69% of its Investment Advisory Fees
and the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees. These fee
waivers are expected to continue through
December 31, 2000. Accordingly, actual annual
fund operating expenses were as follows:
Investment Advisory Fees 0.00%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.56%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.56%
- ------------------------------------------------
<PAGE> 54
PROSPECTUS
51
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 55
PROSPECTUS
52
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Your Account
HOW SALES CHARGES ARE CALCULATED
Shares of each Fund are sold at their public offering price, which includes the
initial sales charge. Therefore, part of the money you invest will be used to
pay the sales charge. The remainder is invested in Fund shares. The sales charge
decreases with larger purchases. There is no sales charge on reinvested
dividends and distributions or on purchases of the Money Market Funds.
The current sales charge rates are as follows:
FOR THE EQUITY FUND, THE BALANCED FUND, THE GROWTH EQUITY FUND, AND THE SMALL
CAP EQUITY FUND
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Net Investment
- ---------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 5.00% 5.26%
$50,000 up to $99,999 3.75% 3.90%
$100,000 up to $249,999 2.75% 2.83%
$250,000 up to $499,999 2.00% 2.04%
$500,000 up to $999,999 1.75% 1.78%
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
</TABLE>
FOR THE BOND FUND
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Net Investment
- ---------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 4.00% 4.17%
$50,000 up to $99,999 3.25% 3.36%
$100,000 up to $249,999 2.50% 2.56%
$250,000 up to $499,999 2.00% 2.04%
$500,000 up to $999,999 1.50% 1.52%
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
</TABLE>
<PAGE> 56
PROSPECTUS
53
FOR THE INTERMEDIATE BOND FUND AND THE INTERMEDIATE TAX-FREE BOND FUND
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE
AS A % OF AS A % OF
YOUR INVESTMENT OFFERING PRICE YOUR NET INVESTMENT
- ---------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 3.00% 3.09%
$50,000 up to $99,999 2.50% 2.56%
$100,000 up to $249,999 2.00% 2.04%
$250,000 up to $499,999 1.50% 1.52%
$500,000 up to $999,999 1.25% 1.27%
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
</TABLE>
FOR THE SHORT-TERM INCOME FUND
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Net Investment
- ---------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 2.00% 2.04%
$50,000 up to $99,999 1.50% 1.52%
$100,000 up to $249,999 1.25% 1.27%
$250,000 up to $499,999 1.00% 1.01%
$500,000 up to $999,999 0.75% 0.76%
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
</TABLE>
(1) There is no initial sales charge on purchases of $1 million or more.
However, a contingent deferred sales charge (CDSC) of up to 1.00% of the
purchase price will be charged to the shareholder if shares are redeemed in
the first year after purchase. This charge will be based on the lower of
your cost for the shares or their NAV at the time of redemption. There will
be no CDSC on reinvested distributions.
SALES CHARGE WAIVERS
The Distributor may periodically waive the sales charges for all customers with
respect to any of the Equity Funds or Bond 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;
<PAGE> 57
PROSPECTUS
54
YOUR ACCOUNT
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 Funds within their trust
accounts and purchase additional shares outside of these trust
relationships;
7. investors within wrap accounts;
8. investors who purchase in connection with 401(k) plans, 403(b) plans, and
other employer-sponsored, qualified retirement plans; and
9. investors who purchase in connection with non-transactional fee fund
programs and programs offered by fee-based financial planners and other
types of financial institutions.
Each investor described in paragraphs (2), (3), (4), (6), (8), and (9) 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.
SALES CHARGE REDUCTIONS
Reduced sales charges are available to shareholders with investments of $50,000
or more (please see the previous section titled "How Sales Charges are
Calculated."). In addition, you may qualify for reduced sales charges under the
following circumstances.
- - Letter of Intent. You inform the Funds in writing that you intend to purchase
enough shares over a 13-month period to qualify for a reduced sales charge.
You must include a minimum of 5% of the total amount you intend to purchase
with your letter of intent.
- - Right of Accumulation. When the value of shares you already own plus the
amount you intend to invest reaches the amount needed to qualify for reduced
sales charges, your added investment will qualify for the reduced sales
charge.
<PAGE> 58
PROSPECTUS
55
- - Combination Privilege. Combine accounts of multiple Funds (excluding the Money
Market Funds) or accounts of immediate family household members (spouse and
children under 21) and businesses owned by you as sole proprietorship to
achieve reduced sales charges.
- - Concurrent Purchases. For purposes of qualifying for a reduced sales charge,
investors have the privilege of:
(a) combining concurrent purchases of, and holdings in, shares of any of
the American Performance Funds purchased from a broker or dealer
selling the American Performance Funds, sold with a sales charge
("Eligible Shares"); or
(b) combining concurrent purchases of shares of any funds purchased from a
broker or dealer selling the American Performance Funds, sold with a
sales charge ("Other Shares") with concurrent purchases of 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 and Other 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.
Reinstatement Privilege. If you have sold shares and decide to reinvest in the
Fund within a 90 day period, you will not be charged the applicable sales load
on amounts up to the value of the shares you sold. You must provide a written
reinstatement request and payment within 90 days of the date your instructions
to sell were processed.
RULE 12b-1 FEES
The Funds have adopted a plan under Rule'12b-1 that allows each Fund to pay
distribution and service fees for the sale and distribution of its shares and
for services provided to shareholders. Because these fees are paid out of a
Fund's assets continuously, over time, these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. The
maximum distribution fee is 0.25% of the average daily net assets of a Fund.
OPENING AN ACCOUNT
1.Read this prospectus carefully.
2.Determine how much you want to invest. The minimum investment for the American
Performance Funds is as follows:
- INITIAL PURCHASE: -- $1,000 for each Fund
- ADDITIONAL PURCHASES: -- $100 for each Fund
<PAGE> 59
PROSPECTUS
56
YOUR ACCOUNT
These minimums may be waived if purchases are made in connection with
Individual Retirement Accounts, Keoghs, qualified pension plans, similar
plans, or other employer plans. For more information on IRAs, Keoghs, or
similar plans, contact the Bank of Oklahoma, N.A. at (800) 762-7085. The
minimum investment in the Automatic Investment Program is $100. Please refer
to the section titled "Automatic Investment Program."
3. Complete the appropriate parts of the Account Registration Form, carefully
following the instructions. You must submit additional documentation when
opening trust, corporate or power of attorney accounts. For more information,
please contact your financial representative or call the Funds at
1-800-762-7085.
<PAGE> 60
PROSPECTUS
57
BUYING SHARES
<TABLE>
<CAPTION>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
By Mail
- - Make out a check, bank draft, - Make out a check, bank draft, or money
or money order for the order for the investment amount payable
investment amount (at least (at least $100) to the appropriate
$1,000), payable to the American Performance Fund.
appropriate American
Performance Fund.
- - Deliver the check, bank - Deliver the check, bank draft, or money
draft, or money order and order and investment slip attached to
your completed Account your account statement (or, if
Registration Form to the unavailable, provide the Fund name,
Funds' Custodian at Bank of share class, amount invested, account
Oklahoma, N.A., Attention: name, and account number) to the Funds'
American Performance Funds, Custodian at Bank of Oklahoma, N.A.,
Department 12, Tulsa, Attention: American Performance Funds,
Oklahoma 74182. Department 12, Tulsa, Oklahoma 74182.
- -----------------------------------------------------------------------------------
By Overnight Mail
- - Make out a check, bank draft, - Make out a check, bank draft, or money
or money order for the order for the investment amount payable
investment amount (at least (at least $100) to the appropriate
$1,000), payable to the American Performance Fund.
appropriate American
Performance Fund.
- - Deliver the check, bank - Deliver the check, bank draft, or money
draft, or money order and order and investment slip attached to
your completed Account your account statement (or, if
Registration Form to c/o unavailable, provide the Fund name,
BISYS Fund Services, Attn: TA share class, amount invested, account
Operations, American name, and account number) to c/o BISYS
Performance Funds, 3435 Fund Services, Attn: TA Operations,
Stelzer Road, Columbus, Ohio American Performance Funds, 3435 Stelzer
43219-3035. Road, Columbus, Ohio 43219-3035.
- -----------------------------------------------------------------------------------
All purchases made by check should be in U.S. dollars.
Third party checks, credit card checks or cash will not be accepted.
</TABLE>
<PAGE> 61
PROSPECTUS
58
YOUR ACCOUNT
<TABLE>
<CAPTION>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ------------------------------------------------------------------------------
<S> <C> <C>
By Telephone or Wire Transfer
- - Call (800) 762-7085 for a - Deliver your completed Account
confirmation number and Registration Form to the Distributor.
instructions for returning your - To place an order by telephone call
completed Account Registration the Funds at (800) 762-7085. Payment
Form. for shares may be made by check.
- Instruct your bank to wire the amount
of your investment to:
Federal Reserve
Bank of Oklahoma
Trust Department
ABA# 1039000036
DDA# 600024642
- Specify the fund name, your account
number, the name(s) in which the
account is registered and your
confirmation number.
- After initiating the wire, call (800)
762-7085 to advise us of the amount
being wired and the name of your
bank.
- Your bank may charge a fee to wire
funds.
- ------------------------------------------------------------------------------
By Electronic Funds Transfer
- - Your bank must participate in - Establish the electronic purchase
the Automated Clearing House option on your Account Registration
and must be a U.S. bank. Form or call (800) 762-7085.
- Call (800) 762-7085 to arrange an
electronic purchase.
- Your bank may charge a fee to
electronically transfer funds.
- ------------------------------------------------------------------------------
</TABLE>
<PAGE> 62
PROSPECTUS
59
SELLING SHARES
<TABLE>
<CAPTION>
DESIGNED FOR TO SELL SOME OR ALL OF YOUR SHARES
<S> <C>
- ------------------------------------------------------------------------------------
By Mail
- - Accounts of any type. - Write a letter of instruction
indicating the fund name, your account
- - Sales of any amount. number, the name(s) in which the
account is registered and the dollar
value or number of shares you wish to
sell.
- Include the account owner
signature(s).
- Mail the materials to the Funds'
Custodian at Bank of Oklahoma, N.A.,
Attention: American Performance Funds,
Department 12, Tulsa, Oklahoma, 74182.
- A check will be mailed to the name(s)
and address in which the account is
registered, or otherwise according to
your letter of instruction.
- ------------------------------------------------------------------------------------
By Overnight Mail
- - Accounts of any type. - Write a letter of instruction
indicating the fund name, your account
- - Sales of any amount. number, the name(s) in which the
account is registered and the dollar
value or number of shares you wish to
sell.
- Include the account owner
signature(s).
- Mail the materials to American
Performance Funds, c/o BISYS Fund
Services, Attn: T.A. Operations, 3435
Stelzer Road, Columbus, Ohio
43219-3035.
- A check will be mailed to the name(s)
and address in which the account is
registered, or otherwise according to
your letter of instruction.
</TABLE>
<PAGE> 63
PROSPECTUS
60
YOUR ACCOUNT
<TABLE>
<CAPTION>
DESIGNED FOR TO SELL SOME OR ALL OF YOUR SHARES
<S> <C>
- ------------------------------------------------------------------------------------
By Phone
- - Accounts of any type. - Call (800) 762-7085 with instructions
as to how you wish to receive your
- - Sales of any amount. funds (mail, wire, electronic
transfer).
- ------------------------------------------------------------------------------------
By Wire
- - Accounts of any type which have elected - Call (800) 762-7085 to request a wire
the wire option on the Account transfer.
Registration Form.
- If you call by 4 p.m. Eastern time,
- - Sales of any amount. your payment will normally be wired to
your bank on the next business day.
- The Fund may charge a wire fee.
- Your bank may charge a fee to wire
funds.
- ------------------------------------------------------------------------------------
</TABLE>
Selling Shares in Writing. In certain circumstances, you may need to include a
signature guarantee, which protects you against fraudulent orders. You will need
a signature guarantee unless:
- - the redemption check is payable to the shareholder(s) of record, and
- - the check is mailed to the shareholder(s) of record and mailed to the address
of record.
You should be able to obtain your signature guarantee from a bank, broker,
dealer, credit union, securities exchange or association, clearing agency, or
savings association. A notary public CANNOT provide a signature guarantee.
Receiving Your Money. Normally, payment of your redemption proceeds will be made
as promptly as possible and, in any event, within seven calendar days after the
redemption order is received. At various times, however, a Fund may be requested
to redeem shares for which it has not yet received good payment; collection of
payment may take ten or more days. In these circumstances, the redemption
request will be rejected by the Fund. Once a Fund has received good payment for
the shares a shareholder may submit another request for redemption. If you have
made your initial investment by check, you cannot redeem any portion of it until
that check has cleared (which may require up to 10 business days). You can avoid
this delay by purchasing shares with a certified check.
Involuntary Sales of Your Shares. Due to the relatively high costs of handling
small investments, each Fund reserves the right to redeem your shares at net
<PAGE> 64
PROSPECTUS
61
asset value if your account balance in any Fund drops below $500. Before any
Fund exercises its right to redeem your shares you will be given at least 60
days written notice to give you time to add to your account and avoid selling
your shares.
Refusal of Redemption Request. The Funds may postpone payment for shares at
times when the New York Stock Exchange is closed or under any emergency
circumstances as determined by the Securities and Exchange Commission. If you
experience difficulty making a telephone redemption during periods of drastic
economic or market change, you can send the Funds your request by regular or
express mail. Follow the instructions above under "Selling Your Shares" in this
section.
Redemption In Kind. The Funds reserve the right to make payment in securities
rather than cash, known as "redemption in kind." This could occur under
extraordinary circumstances, such as a very large redemption that could affect
Fund operations (for example, more than 1% of a Fund's net assets). If a Fund
deems it advisable for the benefit of all shareholders, redemption in kind will
consist of securities equal in market value to your shares. When you convert
these securities to cash, you will pay brokerage charges.
Undeliverable Redemption Checks. For any shareholder who chooses to receive
distributions in cash: If distribution checks (1) are returned and marked as
"undeliverable" or (2) remain uncashed for six months, your account will be
changed automatically so that all future distributions are reinvested in your
account. Checks that remain uncashed for six months will be canceled and the
money reinvested in the appropriate Fund.
EXCHANGING SHARES
How to Exchange Your Shares. Shares of any 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 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. 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
<PAGE> 65
PROSPECTUS
62
YOUR ACCOUNT
Prospectus of the Fund in which he or she wishes to invest before the exchange
will be effected.
TRANSACTION POLICIES
Valuation of Shares. The net asset value per share of a Fund is determined by
dividing the total market value of the Fund's investments and other assets, less
any liabilities, by the total number of outstanding shares of the Fund.
MONEY MARKET FUNDS
- - The net asset value of each of the Money Market Funds is determined on each
business day 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 day in which the NYSE is open for trading, and the Federal
Reserve Bank of Kansas City is open.
- - The assets in each Money Market Fund are valued based upon the amortized cost
method. For further information about valuation of investments, see the
Statement of Additional Information
- - The net asset value of each of the Money Market Funds is expected to remain at
a constant $1.00 per share, although there is no assurance that this will be
maintained.
BOND AND EQUITY FUNDS
- - The net asset value of each of the Bond and Equity Funds is determined on each
business day as of the close of regular trading of the NYSE (generally 4:00
p.m. Eastern time) on each day in which the NYSE is open for trading, and the
Federal Reserve Bank of Kansas City is open.
- - The assets in each of the Bond and Equity Funds are valued at market value. If
market quotations are not readily available, the securities will be valued at
fair value. For further information about valuation of investments, see the
Statement of Additional Information.
Buy and Sell Prices. When you buy shares, you pay the net asset value next
determined after your order is received plus any applicable sales charges, as
described earlier. When you sell shares, you receive the net asset value next
determined after your order is received minus any applicable deferred sales
charges.
ADDITIONAL INVESTOR SERVICES
Auto Invest Plan (AIP). AIP lets you set up periodic additional investments in
the Funds of your choice through automatic deductions from your bank account,
through payroll deductions or from your federal employment, Social Security
Income or other periodic government checks. The minimum investment amount is $50
per month or quarter per Fund. To establish, complete the
<PAGE> 66
PROSPECTUS
63
appropriate section in the Account Registration Form. The minimum initial
investment in the AIP is $100 and the minimum for subsequent investments is $50.
To participate in AIP from your paycheck or government check call (800) 762-7085
for an enrollment form. To participate in AIP from your bank account, please
attach a voided check to your Account Registration Form.
Directed Dividend Option. By selecting the appropriate box in the Account
Registration Form, you can elect to receive your distributions in cash (check)
or have distributions (capital gains and dividends) reinvested in another
American Performance Fund without a sales charge. You must maintain the minimum
balance in each Fund into which you plan to reinvest dividends or the
reinvestment will be suspended and your dividends paid to you. The Fund may
modify or terminate this reinvestment option without notice. You can change or
terminate your participation in the reinvestment option at any time.
Systematic Withdrawal Plan (SWP). If you have at least $10,000 in your account,
you may use SWP, which allows you to receive regular distributions from your
account. Under the plan you may elect to receive automatic payments via check of
at least $100 per Fund or more on a monthly or quarterly basis. You may arrange
to receive regular distributions from your account via check by completing the
appropriate section in the Account Registration Form and attaching a voided
check or by calling (800) 762-7085. The maximum withdrawal per year is 12% of
the account value at the time of election.
DIVIDENDS AND DISTRIBUTIONS
As a mutual fund shareholder, you may receive capital gains and/or income from
your investment. The Money Market Funds and the Bond Funds declare dividends
daily and pay income dividends monthly. The Equity Funds declare and pay
dividends quarterly. The Funds distribute any capital gains they have realized
at least once a year.
We will automatically reinvest any income and capital gains distributions you
are entitled to in additional shares of your Fund(s) unless you notify our
Distributor that you want to receive your distributions in cash. To do so, send
a letter with your request, including your name and account number to:
American Performance Funds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Your request will become effective for distributions having record dates after
our Distributor receives your request. Note that the IRS treats dividends paid
in additional Fund shares the same as it treats dividends paid in cash.
TAXES
Your mutual fund investments may have a considerable impact on your tax
situation. We've summarized some of the main points you should know below.
<PAGE> 67
PROSPECTUS
64
YOUR ACCOUNT
Note, however, that the following is general information and will not apply to
you if you are investing through a tax-deferred account such as an IRA or a
qualified employee benefit plan. In addition, if you are not a resident of the
United States, you may have to pay taxes besides those described here, such as
U.S. withholding and estate taxes.
Important Note: If you have not done so already, be sure to provide us with your
correct taxpayer identification number OR certify that it is correct. Unless we
have that information, the Funds may be required by law to withhold 31% of the
taxable distributions you would otherwise be entitled to receive from your Fund
investments as well as any proceeds you would normally receive from selling Fund
shares.
We will send you a statement each year showing the tax status of all your
distributions. The laws governing taxes change frequently, however, so please
consult your tax adviser for the most up-to-date information and specific
guidance regarding your particular tax situation. You can find more information
about the potential tax consequences of mutual fund investing in our Statement
of Additional Information.
Taxes on Fund Distributions. You may owe taxes on Fund distributions even if
they represent income or capital gains the Fund earned before you invested in it
(for example, if such income or capital gains were included in the price you
initially paid for your shares). Note that you will generally have to pay taxes
on Fund distributions whether you received them in the form of cash or
additional Fund shares. The Internal Revenue Service treats most mutual fund
distributions as ordinary income. One exception is gains from the sale of assets
held by a Fund for more than one year, which, for an individual shareholder are
typically taxed at a lower rate than ordinary income regardless of how long such
shareholder has held Fund shares.
State and Local Taxes. In addition to federal taxes, you may have to pay state
and local taxes on the dividends or capital gains you receive from a Fund, as
well as on any capital gains you realized from selling or exchanging Fund
shares.
Dividends and Short-Term Capital Gains. The IRS treats any dividends and
short-term capital gains you receive from the Funds as ordinary income.
Special Considerations for Shareholders of the Intermediate Tax-Free Bond Fund.
Shareholders of the Intermediate Tax-Free Bond Fund should note the following:
- - The Fund's portfolio managers expect that virtually all of the income it
generates will be exempt from federal income taxes. If, however, you receive
Social Security or railroad retirement benefits, you should consult your tax
adviser to determine whether an investment in the Fund may affect the federal
taxation of your benefits.
<PAGE> 68
PROSPECTUS
65
- - It is expected that the dividends you receive from the Fund will be exempt
from federal income tax, however, any short-term capital gains you receive
from the Fund will be taxed as ordinary income.
- - Some of the Fund's income may be subject to the alternative minimum tax for
individual shareholders.
- - Corporate shareholders must include all tax-exempt interest income dividends
in determining their federal alternative minimum tax.
Funds Investing in Foreign Securities: If your Fund invests in foreign
securities, the income those securities generate may be subject to foreign
withholding taxes, which may decrease their yield. Foreign governments may also
impose taxes on other payments or gains your Fund earns on these securities. In
general, shareholders in these Funds will not be entitled to claim a credit or
deduction for these foreign taxes on their U.S. tax return. (There are some
exceptions, however; please consult your tax adviser for more information.) In
addition, foreign investments may prompt a fund to distribute ordinary income
more frequently and/or in greater amounts than purely domestic funds, which
could increase your tax liability.
Tax Consequences of Selling or Exchanging Shares. If you sell or exchange Fund
shares (including shares of the Intermediate Tax-Free Bond Fund), you will
generally have to report any capital gain you realize as income and any capital
loss as a deduction on your federal income tax return. For more specific
information about your own tax situation, consult your tax adviser.
The portfolio managers of the Funds do not actively consider tax consequences
when making investment decisions. From time to time, the Funds may realize
capital gains as by-products of ordinary investment activities. As a result, the
amount and timing of Fund distributions may vary considerably from year to year.
THESE TAX CONSIDERATIONS MAY OR MAY NOT APPLY TO YOU. PLEASE CONSULT YOUR TAX
ADVISER TO DETERMINE WHETHER THESE CONSIDERATIONS ARE RELEVANT TO YOUR
PARTICULAR INVESTMENTS AND TAX SITUATION. MORE INFORMATION ABOUT TAXES IS IN OUR
STATEMENT OF ADDITIONAL INFORMATION.
<PAGE> 69
PROSPECTUS
66
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Investment Management
INVESTMENT ADVISER
Bank of Oklahoma, N.A. serves as the investment adviser to each of the Funds
and, subject to the supervision of Board of Trustees of the American Performance
Funds, is responsible for the day-to-day management of their investment
portfolios.
Bank of Oklahoma, N.A. 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. 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.
The investment advisory fees paid to Bank of Oklahoma, N.A., after voluntary fee
reductions, by the Funds for the fiscal year ended August 31, 1999, were as
follows:
<TABLE>
<CAPTION>
FUND % OF AVERAGE NET ASSETS
<S> <C>
- - U.S. Treasury Fund 0.40%
- Cash Management Fund 0. %*
- Bond Fund 0.35%
- Intermediate Bond Fund 0.35%
- Intermediate Tax-Free Bond Fund 0.35%
- Short-Term Income Fund 0.00%
- Equity Fund 0.50%
- Balanced Fund 0.17%
- Growth Equity Fund 0.50%
</TABLE>
* AMR Investment Services, Inc., P.O. Box 619003 Dallas/Ft. Worth Airport, Texas
75261-9003, served as sub-adviser to the Cash Management Fund through April
30, 1999.
The persons primarily responsible for the day-to-day management of each Fund, as
well as their previous business experience, are as follows:
<TABLE>
<CAPTION>
PORTFOLIO MANAGER BUSINESS EXPERIENCE
----------------- --------------------------------
<S> <C>
William Bequette Co-Manager of the Intermediate
Tax-Free Bond Fund since its
inception. Since 1963, Mr.
Bequette has been a portfolio
manager for Bank of Oklahoma,
N.A.
</TABLE>
<PAGE> 70
PROSPECTUS
67
<TABLE>
<CAPTION>
PORTFOLIO MANAGER BUSINESS EXPERIENCE
----------------- --------------------------------
<S> <C>
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 Bank of
Oklahoma, N.A. as a Government
Securities Trader and was named
Investment Officer of the
Capital Market Division in 1992.
Prior to joining Bank of
Oklahoma, N.A., Mr. Henderson
was a Financial Consultant and
Equity Analyst with Southwest
Securities in Dallas, Texas.
Andrew W. Hood Manager of the Balanced Fund
since its inception. Since 1993,
Mr. Hood has been a portfolio
manager for Bank of Oklahoma,
N.A. From 1987 to 1993 Mr. Hood
was a portfolio manager for Sun
Trust Bank in Florida.
K.C. Matthews Co-Manager of the Intermediate
Tax-Free Bond Fund since
February 1999. In 1994, Mr.
Matthews became a portfolio
manager. Mr. Matthews joined
Bank of Oklahoma, N.A. in 1993
in the Capital Markets Division.
Grafton M. Potter Manager of the Equity Fund, the
Growth Equity Fund, and the
Small Cap Equity Fund since
their inception. Since 1988, Mr.
Potter has served as Director of
Equity Research for Bank of
Oklahoma, N.A.
</TABLE>
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.
<PAGE> 71
PROSPECTUS
68
INVESTMENT MANAGEMENT
The Equity Growth Trust B is not a registered investment company as it is exempt
from registration under the Investment Company Act of 1940. 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 Fees and Expenses
section 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.
<PAGE> 72
PROSPECTUS
69
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
COMPARATIVE PERFORMANCE INFORMATION REGARDING THE EQUITY GROWTH TRUST B AND THE
GROWTH EQUITY FUND AUGUST 31, 1997
NO LOAD AVERAGE ANNUAL TOTAL RETURN*
<TABLE>
<CAPTION>
1 3 SINCE
FUND YEAR YEAR 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>
1 3 SINCE
FUND YEAR YEAR 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 Fees and
Expenses section (i.e., adjusted to reflect anticipated fees and expenses,
absent any 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.
<PAGE> 73
PROSPECTUS
70
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or, if shorter, the period of each
Fund's operations. Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an investor
would have earned or lost on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been audited by KPMG LLP,
whose report, along with the Funds' financial statements, are included in the
annual report, which is available upon request.
HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE
This explanation uses the U.S. Treasury Fund as an example. The Fund began
fiscal 1999 with a net asset value (price) of $1 per share. During the year, the
Fund earned $ per share from investment income (interest and dividends).
Shareholders received $ per share in the form of dividend distributions. A
portion of each year's distributions may come from the prior year's income.
The earnings ($ per share) minus the distributions ($ per share) resulted in a
share price of $1 at the end of the year. For a shareholder who reinvested the
distributions in the purchase of more shares, the total return from the Fund was
% for the year.
As of August 31, 1999, the Fund had $394 million in net assets. For the year,
its expense ratio was 0. % ($ per $1,000 of net assets); and its net
investment income amounted to % of its average net assets.
<PAGE> 74
PROSPECTUS
71
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
INVESTMENT PRACTICES
The Funds invest in a variety of securities and employ a number of investment
techniques. Each security and technique involves certain risks. What follows is
a list of the securities and techniques used by the Funds, as well as the risks
inherent in their use. Equity securities are subject mainly to market risk.
Fixed income securities are primarily influenced by market, credit and
prepayment risks, although certain securities may be subject to additional
risks. For a more complete discussion, see the Statement of Additional
Information. Following the table is a more complete discussion of risk.
<TABLE>
<CAPTION>
FUND NAME FUND CODE
<S> <C>
- U.S. Treasury Fund 1
- Cash Management Fund 2
- Bond Fund 3
- Intermediate Bond Fund 4
- Intermediate Tax-Free Bond Fund 5
- Short-Term Income Fund 6
- Equity Fund 7
- Balanced Fund 8
- Growth Equity Fund 9
- Small Cap Equity Fund 10
</TABLE>
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
AMERICAN DEPOSITORY RECEIPTS 2-4, 6-10 - Market
(ADRS): - Political
ADRs are foreign shares of a - Foreign
company held by a U.S. bank that Investment
issues a receipt evidencing
ownership. Dividends are paid in
U.S. dollars.
- -------------------------------------------------------------------------
ASSET-BACKED SECURITIES: 2-4, 6, 8 - Pre-payment
Securities secured by company - Market
receivables, home equity loans, - Credit
truck and auto loans, leases, - Regulatory
credit card receivables and other
securities backed by other types of
receivables or other assets.
</TABLE>
<PAGE> 75
PROSPECTUS
72
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
BANKERS' ACCEPTANCES: 2-10 - Credit
Bills of exchange or time drafts - Liquidity
drawn on and accepted by a - Market
commercial bank. Maturities are
generally six months or less.
- -------------------------------------------------------------------------
CALL AND PUT OPTIONS: 2-4, 6-10 - Management
A call option gives the buyer the - Liquidity
right to buy, and obligates the - Credit
seller of the option to sell, a - Market
security at a specified price. A - Leverage
put option gives the buyer the
right to sell, and obligates the
seller of the option to buy a
security at a specified price. The
Funds will sell only covered call
and secured put options.
- -------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT: 2-10 - Market
Negotiable instruments with a - Credit
stated maturity. - Liquidity
- -------------------------------------------------------------------------
COMMERCIAL PAPER: 2-10 - Credit
Secured and unsecured short-term - Liquidity
promissory notes issued by - Market
corporations and other entities.
Maturities generally vary from a
few days to nine months.
- -------------------------------------------------------------------------
COMMON STOCK: 7-10 - Market
Shares of ownership of a company.
- -------------------------------------------------------------------------
CONVERTIBLE SECURITIES: 7-10 - Market
Bonds or preferred stock that - Credit
convert to common stock.
- -------------------------------------------------------------------------
DERIVATIVES: 3-10 - Management
Instruments whose value is derived - Market
from an underlying contract, index - Credit
or security, or any combination - Liquidity
thereof, including futures, options - Leverage
(e.g., put and calls), options on
futures, swap agreements, and some
mortgage-backed securities.
</TABLE>
<PAGE> 76
PROSPECTUS
73
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
FOREIGN SECURITIES: 3,4, 6, 7-10 - Market
Stocks issued by foreign companies, - Political
as well as commercial paper of - Liquidity
foreign issuers and obligations of - Foreign
foreign banks, overseas branches of Investment
U.S. banks and supranational
entities.
- -------------------------------------------------------------------------
FUTURES AND RELATED OPTIONS: 3-10 - Management
A contract providing for the future - Market
sale and purchase of a specified - Credit
amount of a specified security, - Liquidity
class of securities, or an index at - Leverage
a specified time in the future and
at a specified price.
- -------------------------------------------------------------------------
ILLIQUID SECURITIES: 1-10 - Liquidity
Each Fund may invest up to 10% of - Market
its net assets in securities that
are illiquid. Illiquid securities
are those securities which cannot
be disposed of in the ordinary
course of business, seven days or
less, at approximately the value at
which the Fund has valued the
securities.
- -------------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES: 3-10 - Market
Shares of other registered
investment companies with similar
investment objectives. A Fund may
invest up to 5% of its assets in
the shares of any one registered
investment company, but may not own
more than 3% of the securities of
any one registered investment
company or invest more than 10% of
its assets in the securities of
other registered investment
companies. These registered
investment companies may include
money market funds of the American
Performance Funds and shares of
other registered investment
companies for which the Adviser or
any of its affiliates serves as
investment adviser, administrator
or distributor.
</TABLE>
<PAGE> 77
PROSPECTUS
74
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
INVESTMENT GRADE BONDS: 3, 4, 5, 7-10 - Market
Interest-bearing or discounted - Credit
government or corporate securities
that obligate the issuer to pay the
bondholder a specified sum of
money, usually at specific
intervals, and to repay the
principal amount of the loan at
maturity. Investment grade bonds
are those rated BBB or better by
S&P or Baa or better by Moody's or
similarly rated by other nationally
recognized statistical rating
organizations, or, if not rated,
determined to be of comparable
quality by the Adviser.
- -------------------------------------------------------------------------
LOAN PARTICIPATION INTERESTS: 2 - Market
Loan participation interests are - Liquidity
interests in bank loans made to - Credit
corporations. In these arrangements
the bank transfers the cash stream
of the underlying bank loan to the
participating investor.
- -------------------------------------------------------------------------
MONEY MARKET INSTRUMENTS: 2-10 - Market
Investment-grade, U.S. - Credit
dollar-denominated debt securities
that have remaining maturities of
one year or less. These securities
may include U.S. government
obligations, commercial paper and
other short-term corporate
obligations, repurchase agreements
collateralized with U.S. government
securities, certificates of
deposit, bankers' acceptances, and
other financial institution
obligations. These securities may
carry fixed or variable interest
rates.
- -------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES: 1-10 - Pre-payment
Debt obligations secured by real - Market
estate loans and pools of loans. - Credit
These include collateralized - Regulatory
mortgage obligations and real
estate mortgage investment
conduits.
</TABLE>
<PAGE> 78
PROSPECTUS
75
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
MUNICIPAL SECURITIES: 3-6 - Market
Securities issued by a state or - Credit
political subdivision to obtain - Political
funds for various public purposes - Tax
Municipal securities include - Regulatory
private activity bonds and
industrial development bonds, as
well as general obligation notes,
tax anticipation notes, bond
anticipation notes, revenue
anticipation notes, project notes,
and other short-term tax-exempt
obligations.
- -------------------------------------------------------------------------
PREFERRED STOCK: 7-10 - Market
Preferred stocks are equity
securities that generally pay
dividends at a specified rate and
have preference over common stock
in the payment of dividends and
liquidation. Preferred stock
generally does not carry voting
rights.
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS: 1-10 - Market
The purchase of a security and the - Leverage
simultaneous commitment to return
the security to the seller at an
agreed upon price on an agreed upon
date. This is treated as a loan.
- -------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENT: 1-10 - Market
The sale of a security and the - Leverage
simultaneous commitment to buy the
security back at an agreed upon
price on an agreed upon date. This
is treated as a borrowing.
- -------------------------------------------------------------------------
RESTRICTED SECURITIES: 2-10 - Liquidity
Securities not registered under the - Market
Securities Act of 1933, such as
privately placed commercial paper
and Rule 144A securities.
- -------------------------------------------------------------------------
SECURITIES LENDING: 1-10 - Market
The lending of up to 33 1/3% of a - Leverage
Fund's total assets. In return the - Liquidity
Fund will receive cash, other - Credit
securities, and/or letters of
credit.
</TABLE>
<PAGE> 79
PROSPECTUS
76
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
TIME DEPOSITS: 2-10 - Liquidity
Non-negotiable receipts issued by a - Credit
bank in exchange for the deposit of - Market
funds.
- -------------------------------------------------------------------------
TREASURY RECEIPTS: 1, 2 - Market
Treasury receipts, Treasury
investment growth receipts, and
certificates of accrual of Treasury
securities.
- -------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES: 1-10 - Market
Securities issued by agencies and - Credit
instrumentalities of the U.S.
government. These include Ginnie
Mae, Fannie Mae, and Freddie Mac.
- -------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS: 1-10 - Market
Bills, notes, bonds, separately
traded registered interest and
principal securities, and coupons
under bank entry safekeeping.
- -------------------------------------------------------------------------
VARIABLE AND FLOATING RATE 2-10 - Credit
INSTRUMENTS: - Liquidity
Obligations with interest rates - Market
which are reset daily, weekly,
quarterly or some other period and
which may be payable to the Fund on
demand.
- -------------------------------------------------------------------------
WARRANTS: 7-10 - Market
Securities, typically issued with - Credit
preferred stock or bonds, that give
the holder the right to buy a
proportionate amount of common
stock at a specified price.
- -------------------------------------------------------------------------
WHEN-ISSUED SECURITIES: 1-10 - Market
Contract to purchase securities at - Leverage
a fixed price for delivery at a - Liquidity
future date. - Credit
- -------------------------------------------------------------------------
ZERO-COUPON DEBT OBLIGATIONS: 3, 4, 6 - Credit
Bonds and other debt that pay no - Market
interest, but are issued at a - Zero
discount from their value at - Coupon
maturity. When held to maturity,
their entire return equals the
difference between their issue
price and their maturity value.
</TABLE>
<PAGE> 80
PROSPECTUS
77
INVESTMENT RISKS
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "What are the main risks of investing in this Fund?" Because of
these risks, the value of the securities held by each Fund may fluctuate, as
will the value of your investment in the Fund. Certain investments and Funds are
more susceptible to these risks than others.
- - Credit Risk.
The risk that the issuer of a security, or the counterparty to a contract,
will default or otherwise become unable to honor a financial obligation.
Credit risk is generally higher for non-investment grade securities. The price
of a security can be adversely affected prior to actual default as its credit
status deteriorates and the probability of default rises.
- - Foreign Investment Risk.
The risk associated with higher transaction costs, delayed settlements,
currency controls and adverse economic developments. This also includes the
risk that fluctuations in the exchange rates between the U.S. dollar and
foreign currencies may negatively affect an investment. Adverse changes in
exchange rates may erode or reverse any gains produced by foreign currency
denominated investments and may widen any losses. Exchange rate volatility
also may affect the ability of an issuer to repay U.S. dollar denominated
debt, thereby increasing credit risk. Foreign securities may also be affected
by incomplete or inaccurate financial information on companies, social
upheavals or political actions ranging from tax code changes to governmental
collapse. These risks are more significant in emerging markets.
- - Investment Style Risk.
The risk that returns from a particular class or group of stocks (e.g., value,
growth, small cap, large cap) will trail returns from other asset classes or
the overall stock market. Groups or asset classes of stocks tend to go through
cycles of doing better -- or worse -- than common stocks in general. These
periods can last for periods as long as several years. Additionally, a
particular asset class or group of stocks could fall out of favor with the
market, causing the Fund to underperform funds that focus on other types of
stocks.
- - Leverage Risk.
The risk associated with securities or practices that multiply small index or
market movements into large changes in value. Leverage is often associated
with investments in derivatives, but also may be embedded directly in the
characteristics of other securities. Leveraged risk is hedged when a
derivative (a security whose value is based on another security or index) is
used as a hedge against an opposite position that a Fund also holds, any loss
generated by the derivative should be substantially offset by gains on the
hedged investment, and vice versa. Hedges are sometimes subject to imperfect
matching between
<PAGE> 81
PROSPECTUS
78
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
the derivative and underlying security, and there can be no assurance that a
Fund's hedging transactions will be effective.
- - Liquidity Risk.
The risk that certain securities may be difficult or impossible to sell at the
time and the price that would normally prevail in the market. The seller may
have to lower the price, sell other securities instead or forego an investment
opportunity, any of which could have a negative effect on Fund management or
performance. This includes the risk of missing out on an investment
opportunity because the assets necessary to take advantage of it are tied up
in less advantageous investments.
- - Management Risk.
The risk that a strategy used by a Fund's portfolio manager may fail to
produce the intended result. This includes the risk that changes in the value
of a hedging instrument will not match those of the asset being hedged.
Incomplete matching can result in unanticipated risks.
- - Market Risk.
The risk that the market value of a security may move up and down, sometimes
rapidly and unpredictably. These fluctuations may cause a security to be worth
less than the price originally paid for it, or less than it was worth at an
earlier time. Market risk may affect a single issuer, industrial sector of the
economy or the market as a whole. There is also the risk that the current
interest rate may not accurately reflect existing market rates. For fixed
income securities, market risk is largely, but not exclusively, influenced by
changes in interest rates. A rise in interest rates typically causes a fall in
values, while a fall in rates typically causes a rise in values. Finally, key
information about a security or market may be inaccurate or unavailable. This
is particularly relevant to investments in foreign securities.
- - Political Risk.
The risk of losses attributable to unfavorable governmental or political
actions, seizure of foreign deposits, changes in tax or trade statutes, and
governmental collapse and war.
- - Pre-Payment/Call Risk.
The risk that the principal repayment of a security will occur at an
unexpected time. Prepayment risk is the chance that the repayment of a
mortgage will occur sooner than expected. Call risk is the possibility that
during periods of falling interest rates, a bond issuer will "call" -- or
repay -- its high-yielding bond before the bond's maturity date. Changes in
pre-payment/call rates can result in greater price and yield volatility.
Pre-payments/calls generally accelerate when interest rates decline. When
mortgage and other obligations are pre-paid, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income -- and the potential for taxable capital gains. Further,
with
<PAGE> 82
PROSPECTUS
79
early prepayment, a Fund may fail to recover any premium paid, resulting in an
unexpected capital loss. Prepayment/call risk is generally low for securities
with a short-term maturity, moderate for securities with an intermediate-term
maturity, and high for securities with a long-term maturity.
- - Regulatory Risk.
The risk associated with Federal and state laws which may restrict the
remedies that a lender has when a borrower defaults on loans. These laws
include restrictions on foreclosures, redemption rights after foreclosure,
Federal and state bankruptcy and debtor relief laws, restrictions on "due on
sale" clauses, and state usury laws.
- - Small Cap Securities Risk.
Stocks of small-capitalization companies are more risky than stocks of larger
companies and may be more vulnerable than larger companies to adverse business
or economic developments. Many of these companies are young and have a limited
track record. Small cap companies may also have limited product lines,
markets, or financial resources. Securities of such companies may be less
liquid and more volatile than securities of larger companies or the market
averages in general and, therefore, may involve greater risk than investing in
larger companies. In addition, small cap companies may not be well-known to
the investing public, may not have institutional ownership, and may have only
cyclical, static, or moderate growth prospects. If a Fund concentrates on
small-capitalization companies, its performance may be more volatile than that
of a fund that invests primarily in larger companies.
- - Tax Risk.
The risk that the issuer of the securities will fail to comply with certain
requirements of the Internal Revenue Code, which would cause adverse tax
consequences.
- - Zero Coupon Risk.
The market prices of securities structured as zero coupon or pay-in-kind
securities are generally affected to a greater extent by interest rate
changes. These securities tend to be more volatile than securities which pay
interest periodically.
- - Year 2000 Risk.
The American Performance Funds depends on the smooth functioning of computer
systems in almost every aspect of its business. Like other mutual funds,
businesses and individuals around the world, the American Performance Funds
could be adversely affected if the computer systems used by its service
providers do not properly process dates on and after January 1, 2000 and
distinguish between the year 2000 and the year 1900. The American Performance
Funds has made inquiry of its service providers to determine whether they
expect to have their computer systems adjusted for the year 2000 transition,
and has received an assurance from each service provider that it expects its
system to accommodate the year 2000 transition without
<PAGE> 83
PROSPECTUS
80
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
material adverse consequences to the American Performance Funds. While such
assurances have been obtained, the American Performance Funds and its
shareholders may experience losses if these assurances prove to be incorrect
or as a result of year 2000 computer difficulties experienced by issuers of
portfolio securities or custodians, banks, broker-dealers or others with which
the American Performance Funds does business.
<PAGE> 84
PROSPECTUS
81
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Glossary of Investment Terms
ALTERNATIVE MINIMUM TAX.
A measure designed to assure that individuals pay at least a minimum amount of
federal income taxes. Certain securities used to fund private, for-profit
activities are subject to AMT.
BALANCED FUND.
A mutual fund that seeks to provide some combination of income, capital growth,
and conservation of principal by investing in stocks, bonds, and/or money market
instruments.
BOND.
A debt security issued by a corporation, government, or government agency in
exchange for the money you lend it. In most instances, the issuer agrees to pay
back the loan by a specific date and make regular interest payments until that
date.
CAPITAL GAINS DISTRIBUTION.
Payment to mutual fund shareholders of gains realized on securities that the
fund has sold at a profit, minus any realized losses.
COMMON STOCK.
A security representing ownership rights in a corporation. A stockholder is
entitled to share in the company's profits, some of which may be paid out as
dividends.
CREDIT QUALITY.
A measure of a bond issuer's ability to repay interest and principal in a timely
manner.
DIVERSIFIED.
Holding a variety of securities so that a fund's return is not badly hurt by the
poor performance of a single security or industry.
DIVIDENDS.
Payment to shareholders of income from interest or dividends generated by a
fund's investments.
FIXED INCOME SECURITIES.
Investments, such as bonds, that have a fixed payment schedule. While the level
of income offered by these securities is predetermined, their prices may
fluctuate.
GROWTH STOCKS.
Stocks of companies believed to have above-average prospects for growth.
Reflecting market expectations for superior growth, the prices of growth stocks
often are relatively high in comparison to revenue, earnings, book value, and
dividends.
INDEX.
An unmanaged group of securities whose overall performance is used as a standard
to measure investment performance.
<PAGE> 85
PROSPECTUS
82
GLOSSARY OF INVESTMENT TERMS
INVESTMENT ADVISER.
An organization that makes the day-to-day decisions regarding a fund's
investments.
INVESTMENT GRADE.
A bond whose credit quality is considered by independent bond-rating agencies to
be sufficient to ensure timely payment of principal and interest under current
economic circumstances.
LIQUIDITY.
The degree of a security's marketability (that is, how quickly the security can
be sold at a fair price and converted to cash).
MATURITY.
The date when a bond issuer agrees to repay the bond's principal, or face value,
to the bond's buyer.
MONEY MARKET FUND.
A mutual fund that seeks to provide income, liquidity, and a stable share price
by investing in very short-term, liquid investments.
MONEY MARKET INSTRUMENTS.
Short-term, liquid investments (usually with a maturity of 13 months or less)
which include U.S. Treasury bills, bank certificates of deposit (CDs),
repurchase agreements, commercial paper, and banker's acceptances.
MUNICIPAL SECURITY.
Debt obligations issued by a state or local government. Interest income from
municipal securities, and therefore dividend income from municipal bond funds,
is generally free from federal income taxes, as well as taxes in the state in
which the securities were issued.
MUTUAL FUND.
An investment company that pools the money of many people and invests it in a
variety of securities in an effort to achieve a specific objective over time.
NET ASSET VALUE (NAV).
The market value of a mutual fund's total assets, minus liabilities, divided by
the number of shares outstanding. The value of a single share is called its
share value or share price.
OPERATING EXPENSES.
The percentage of a fund's average net assets used to pay its expenses.
Operating expenses include investment advisory fees, distribution/service
(12b-1) fees, and administration fees.
SECURITIES.
Stocks, bonds, money market instruments, and other investment vehicles.
<PAGE> 86
PROSPECTUS
83
TOTAL RETURN.
A percentage change, over a specified time period, in a mutual fund's net asset
value, with the ending net asset value adjusted to account for the reinvestment
of all distributions of dividends and capital gains.
VALUE STOCKS.
Stocks of companies whose growth prospects are generally regarded as subpar by
the market. Reflecting these market expectations, the prices of value stocks
typically are below-average in comparison to such factors as revenue, earnings,
book value, and dividends.
VOLATILITY.
The fluctuations in value of a mutual fund or other security. The greater a
fund's volatility, the wider the fluctuations between its high and low prices.
YIELD.
Income (interest and dividends) earned by an investment, expressed as a
percentage of the investment's price.
<PAGE> 87
PROSPECTUS
84
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
MORE INFORMATION
More information about the Funds is available
without charge through the following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
More detailed information about the American
Performance Funds is included in our SAI. The
SAI has been filed with the SEC and is
incorporated by reference into this prospectus.
This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list the Funds' holdings and
contain information on the market conditions and
investment strategies that significantly
affected the American Performance Funds'
performance during the last year.
TO OBTAIN THE SAI, ANNUAL OR SEMI-ANNUAL
REPORTS, OR MORE INFORMATION:
BY TELEPHONE:
Call 1-800-762-7085
BY MAIL:
American Performance Funds
3435 Stelzer Road
Columbus, Ohio 43219-3035
BY INTERNET:
http://www.apfunds.com
FROM THE SEC:
You can also obtain the SAI, the Annual and
Semi-Annual Reports, and other information about
the American Performance Funds, from the SEC's
web site (http://www/sec.gov). You may review
and copy documents at the SEC Public Reference
Room in Washington, DC (for information call
1-800-SEC-0330). You may request documents by
mail from the SEC, upon payment of a duplicating
fee, by writing to: Securities and Exchange
Commission, Public Reference Section, 450 5th
Street, N.W., Washington, DC 20549-6009.
American Performance Funds' Investment Company
Act registration number is 811-6114.
INVESTMENT ADVISER
Bank of Oklahoma, N.A.
Bank Oklahoma Tower
Tulsa, Oklahoma 74103
DISTRIBUTOR &
ADMINISTRATOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio
43219-3035
LEGAL COUNSEL
Ropes & Gray
1301 K Street, N.W.,
Suite 800 East
Washington, DC 20005
<PAGE> 88
[FLAG LOGO]
AMERICAN PERFORMANCE FUNDS
Prospectus
January 1, 2000
U.S. Treasury Fund
Cash Management Fund
[APPLE BUSHEL ARTWORK]
THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
[APPLE LOGO]
<PAGE> 89
HOW TO READ THIS PROSPECTUS
This prospectus is arranged into different sections so that you can easily
review this important information. The next page contains general information
you should know about investing in the Funds.
If you would like more detailed information about each Fund, please see:
<TABLE>
<S> <C>
MONEY MARKET FUNDS
U.S. Treasury Fund 2
Cash Management Fund 6
</TABLE>
If you would like more information about the following topics, please see:
<TABLE>
<S> <C>
YOUR ACCOUNT 10
Rule 12b-1 Fees 10
Opening an Account 10
Buying Shares 11
Selling Shares 13
Exchanging Shares 15
Transaction Policies 16
Additional Investor Services 16
Dividends and Distributions 17
Taxes 17
INVESTMENT MANAGEMENT 20
FINANCIAL HIGHLIGHTS 21
ADDITIONAL INVESTMENT PRACTICES AND
RISKS 22
GLOSSARY OF INVESTMENT TERMS 29
</TABLE>
To obtain more information about the American Performance Funds please refer to
the back cover of the prospectus
January 1, 2000
[APPLE LOGO]
<PAGE> 90
PROSPECTUS
1
[FLAG LOGO]
AMERICAN PERFORMANCE FUNDS
INTRODUCTION
Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities like stocks and
bonds. Before you invest, you should know a few things about investing in mutual
funds.
The value of your investment in a Fund is based on the market prices of the
securities the Fund holds. These prices change daily due to economic and other
events that affect securities markets generally, as well as those that affect
particular companies or governments. These price movements, sometimes called
volatility, will vary depending on the types of securities a Fund owns and the
markets where these securities trade.
LIKE OTHER INVESTMENTS, YOU COULD LOSE MONEY ON YOUR INVESTMENT IN A FUND. YOUR
INVESTMENT IN A FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK. IT IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY.
Each Fund has its own investment goal and strategies for reaching that goal.
However, it cannot be guaranteed that a Fund will achieve its goal. Before
investing, make sure that the Fund's goal matches your own.
The portfolio manager invests each Fund's assets in a way that the manager
believes will help the Fund achieve its goal. A manager's judgments about the
bond and stock markets, economy and companies, and his method of investment
selection, may cause a Fund to underperform other funds with similar objectives.
<PAGE> 91
PROSPECTUS
2
[FLAG LOGO]
AMERICAN PERFORMANCE FUNDS
FUND SUMMARIES
MONEY MARKET FUNDS
U.S. Treasury Fund
------------------------------------------------
INVESTMENT GOAL
Current income with liquidity and stability of
principal
INVESTMENT FOCUS
U.S. Treasury obligations and repurchase
agreements
PRINCIPAL INVESTMENT STRATEGY
Invests in short-term obligations of the U.S.
Treasury
SHARE PRICE VOLATILITY
Low
[APPLE LOGO] INVESTOR PROFILE
Short-term or highly risk averse investors who
want the added security of a U.S. Treasury money
market fund
INVESTMENT STRATEGY
The U.S. Treasury Fund seeks 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, all of which may be subject to
repurchase agreements. The Fund normally invests
at least 65% of its assets in U.S. Treasury
obligations, some of which may be repurchase
agreements. The Fund currently maintains an
average weighted portfolio maturity of 60 days
or less.
MATURITY: A
portfolio's
level of
interest rate exposure
is commonly indicated
by the term maturity.
Generally speaking, the
longer a portfolio's
maturity, the greater
its level of interest
rate exposure and, in
turn, its risk/return
potential.
<PAGE> 92
PROSPECTUS
3
U.S. Treasury Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Your investment in the Fund may be subject to the following principal risks:
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
Fund's yield will decrease due to a decline in interest rates.
- - NET ASSET VALUE RISK -- The risk that the Fund will be unable to meet its goal
of a constant $1 per share.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IT IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER SHARE, IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
[BAR GRAPH]
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %.
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
<PAGE> 93
U.S. Treasury Fund (continued)
PROSPECTUS
4
FUND SUMMARIES
This table shows the Fund's average annual total returns for periods ending
December 31, 1998.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/5/90)
- --------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Fund % % %
- --------------------------------------------------------------------
</TABLE>
YIELD
All mutual funds must use the same formulas to calculate yield and effective
yield. The Fund typically advertises performance in terms of a 7-day yield and
7-day effective yield and may advertise total return. The 7-day yield quotation
more closely reflects current earnings of the Fund than the total return
quotation. The 7-day effective yield will be slightly higher than the yield
because of the compounding effect of the assumed reinvestment. Current yields
and effective yields fluctuate daily and will vary due to factors such as
interest rates and the quality, length of maturities, and type of investments in
the portfolio. The 7-day yield for the period ended , was %.
You may obtain the most current yield information for the Fund by calling
1-800-762-7085.
<PAGE> 94
PROSPECTUS
5
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE
September 5, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
n/a
AMERICAN PERFORMANCE
FUND NUMBER
002
CUSIP NUMBER
028846103
TICKER SYMBOL
APCXX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load) Imposed on
Purchases 0%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%
(as a percentage of net asset value)
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.40%
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.31%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.96%*
- ------------------------------------------------
* During the last fiscal year, the Distributor
agreed to waive Distribution/Service (12b-1)
Fees by 0.25%. This fee waiver is expected to
continue through December 31, 2000.
Accordingly, actual annual fund operating
expenses were as follows:
Investment Advisory Fees 0.40%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.31%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.71%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 95
PROSPECTUS
6
FUND SUMMARIES
Cash Management Fund
------------------------------------------------
INVESTMENT GOAL
Current income with liquidity and stability of
principal
INVESTMENT FOCUS
High-quality money market instruments
PRINCIPAL INVESTMENT STRATEGY
Invests in high-quality, short-term debt
instruments
SHARE PRICE VOLATILITY
Low
INVESTOR PROFILE
Short-term or risk averse investors who are
looking for a money market fund that invests in
high-quality instruments
INVESTMENT STRATEGY
The Cash Management Fund seeks current income
with liquidity and stability of principal by
investing in money market instruments which
present minimal credit risks. The Fund invests
primarily in high-quality instruments including
obligations issued by the U.S. government or its
agencies or instrumentalities, commercial paper
[APPLE LOGO] (including Canadian Commercial Paper and
Europaper), dium-term notes, certificates of
deposit, time deposits, bankers' acceptances and
repurchase agreements. These obligations may be
variable or floating rate instruments or
variable amount master demand notes. To be
considered high-quality, a security must be
rated in one of the two highest credit quality
categories for short-term securities or
determined by the Fund's Adviser to be of
comparable quality. The Fund currently maintains
an average weighted portfolio maturity of 35 to
75 days.
The Fund may, from time to time, concentrate its
investments in certain securities issued by U.S.
banks, U.S. branches of foreign banks and
foreign branches of U.S. banks.
MATURITY: A
portfolio's
level of
interest rate exposure
is commonly indicated
by the term maturity.
Generally speaking, the
longer a portfolio's
maturity, the greater
its level of interest
rate exposure and, in
turn, its risk/return
potential.
<PAGE> 96
PROSPECTUS
7
Cash Management Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Your investment in the Fund may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility that an issuer cannot make
timely interest and principal payments on its securities. Because the Fund
will only invest in securities believed to pose minimal credit risk, it is
unlikely that losses due to credit risk will cause a decline in the value of
your investment. However, even if not severe enough to cause such a decline in
principal value, credit losses could reduce the Fund's yield. In general,
lower-rated securities have higher credit risks.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
Fund's yield will decrease due to a decline in interest rates.
- - NET ASSET VALUE RISK -- The risk that the Fund will be unable to meet its goal
of a constant $1 per share.
- - For more information about these risks please refer to the section titled
"Additional Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IT IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER SHARE, IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
[BAR GRAPH]
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %.
<PAGE> 97
Cash Management Fund (continued)
PROSPECTUS
8
FUND SUMMARIES
<TABLE>
<S> <C> <C>
Best Quarter:
Worst Quarter:
</TABLE>
This table shows the Fund's average annual total returns for periods ending
December 31, 1998.
AVERAGE ANNUAL TOTAL (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/21/90)
- --------------------------------------------------------------------
<S> <C> <C> <C>
Cash Management Fund % % %
- --------------------------------------------------------------------
</TABLE>
* The performance information shown above is based on a calendar year. The
Fund's total return from 1/1/99 to 9/30/99 was %.
- --------------------------------------------------------------------------------
YIELD
All mutual funds must use the same formulas to calculate yield and effective
yield. The Fund typically advertises performance in terms of a 7-day yield and
7-day effective yield and may advertise total return. The 7-day yield quotation
more closely reflects current earnings of the Fund than the total return
quotation. The 7-day effective yield will be slightly higher than the yield
because of the compounding effect of the assumed reinvestment. Current yields
and effective yields fluctuate daily and will vary due to factors such as
interest rates and the quality, length of maturities, and type of investments in
the portfolio. For the period ended , the 7-day yield was %.
You may obtain the most current yield information for the Fund by calling
1-800-762-7085.
<PAGE> 98
PROSPECTUS
9
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISOR
Bank of Oklahoma,
Oklahoma City, OK
INCEPTION DATE
September 21, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$000 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
n/a
AMERICAN PERFORMANCE
FUND NUMBER
001
CUSIP NUMBER
028846202
TICKER SYMBOL
APCXX
FEES AND EXPENSES
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load) Imposed on
Purchases 0%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%
(as a percentage of net asset value)
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.40%*
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.30%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.95%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.02% of its Investment Advisory Fees,
the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees, and the
Administrator waived 0.03% of Other Expenses.
These fee waivers are expected to continue
through December 31, 2000. Accordingly, actual
annual fund operating expenses were as
follows:
Investment Advisory Fees 0.38%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.27%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.65%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$ -- $ -- $ -- $ --
</TABLE>
<PAGE> 99
PROSPECTUS
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[FLAG LOGO]
AMERICAN PERFORMANCE FUNDS
Your Account
RULE 12b-1 FEES
The Funds have adopted a plan under Rule 12b-1 that allows each Fund to pay
distribution and service fees for the sale and distribution of its shares and
for services provided to shareholders. Because these fees are paid out of a
Fund's assets continuously, over time, these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. The
maximum distribution fee is 0.25% of the average daily net assets of a Fund.
OPENING AN ACCOUNT
1.Read this prospectus carefully.
2.Determine how much you want to invest. The minimum investment for the American
Performance Funds is as follows:
- INITIAL PURCHASE: -- $1,000 for each Fund
- ADDITIONAL PURCHASES: -- $100 for each Fund
These minimums may be waived if purchases are made in connection with
Individual Retirement Accounts, Keoghs, qualified pension plans, similar
plans, or other employer plans. For more information on IRAs, Keoghs, or
similar plans, contact the Bank of Oklahoma, N.A. at (918) 588-6586. The
minimum investment in the Auto Invest Plan is $100. Please refer to the
section titled "Auto Invest Plan."
3.Complete the appropriate parts of the Account Registration Form, carefully
following the instructions. You must submit additional documentation when
opening trust, corporate or power of attorney accounts. For more information,
please contact your financial representative or call the Funds at
1-800-762-7085.
<PAGE> 100
PROSPECTUS
11
BUYING SHARES
<TABLE>
<CAPTION>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ------------------------------------------------------------------------
<S> <C> <C> <C>
By Mail
- - Make out a check, bank draft, - Make out a check, bank draft,
or money order for the or money order for the
investment amount (at least investment amount payable (at
$1,000), payable to the least $100) to the
appropriate American appropriate American
Performance Fund. Performance Fund.
- - Deliver the check, bank - Deliver the check, bank
draft, or money order and draft, or money order and
your completed Account investment slip attached to
Registration Form to the your account statement (or,
Funds' Custodian at Bank of if unavailable, provide the
Oklahoma, N.A., Attention: Fund name, share class,
American Performance Funds, amount invested, account
Department 12, Tulsa, name, and account number) to
Oklahoma 74182. the Funds' Custodian at Bank
of Oklahoma, N.A., Attention:
American Performance Funds,
Department 12, Tulsa,
Oklahoma 74182.
- ------------------------------------------------------------------------
By Overnight Mail
- - Make out a check, bank draft, - Make out a check, bank draft,
or money order for the or money order for the
investment amount (at least investment amount payable (at
$1,000), payable to the least $100) to the
appropriate American appropriate American
Performance Fund. Performance Fund.
- - Deliver the check, bank - Deliver the check, bank
draft, or money order and draft, or money order and
your completed Account investment slip attached to
Registration Form to c/o your account statement (or,
BISYS Fund Services, Attn: TA if unavailable, provide the
Operations, American Fund name, share class,
Performance Funds, 3435 amount invested, account
Stelzer Road, Columbus, Ohio name, and account number) to
43219-3035. c/o BISYS Fund Services,
Attn: TA Operations, American
Performance Funds, 3435
Stelzer Road, Columbus, Ohio
43219-3035.
- ------------------------------------------------------------------------
All purchases made by check should be in U.S. dollars.
Third party checks, credit card checks or cash will not be accepted.
</TABLE>
<PAGE> 101
PROSPECTUS
12
YOUR ACCOUNT
<TABLE>
<CAPTION>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ------------------------------------------------------------------------------
<S> <C> <C>
By Telephone or Wire Transfer
- - Call (800) 762-7085 for a - Deliver your completed Account
confirmation number and Registration Form to the Distributor.
instructions for returning your - To place an order by telephone call
completed Account Registration the Funds at (800) 762-7085. Payment
Form. for shares may be made by check.
- Instruct your bank to wire the amount
of your investment to:
Federal Reserve
Bank of Oklahoma
Trust Department
ABA# 1039000036
DDA# 600024642
- Specify the fund name, your account
number, the name(s) in which the
account is registered and your
confirmation number.
- After initiating the wire, call (800)
762-7085 to advise us of the amount
being wired and the name of your
bank.
- Your bank may charge a fee to wire
funds.
- ------------------------------------------------------------------------------
By Electronic Funds Transfer
- - Your bank must participate in - Establish the electronic purchase
the Automated Clearing House option on your Account Registration
and must be a U.S. bank. Form or call (800) 762-7085.
- Call (800) 762-7085 to arrange an
electronic purchase.
- Your bank may charge a fee to
electronically transfer funds.
- ------------------------------------------------------------------------------
</TABLE>
<PAGE> 102
PROSPECTUS
13
SELLING SHARES
<TABLE>
<CAPTION>
DESIGNED FOR TO SELL SOME OR ALL OF YOUR SHARES
<S> <C>
- ------------------------------------------------------------------------------------
By Mail
- - Accounts of any type. - Write a letter of instruction
indicating the fund name, your account
- - Sales of any amount. number, the name(s) in which the
account is registered and the dollar
value or number of shares you wish to
sell.
- Include the account owner
signature(s).
- Mail the materials to the Funds'
Custodian at Bank of Oklahoma, N.A.,
Attention: American Performance Funds,
Department 12, Tulsa, Oklahoma, 74182.
- A check will be mailed to the name(s)
and address in which the account is
registered, or otherwise according to
your letter of instruction.
- ------------------------------------------------------------------------------------
By Overnight Mail
- - Accounts of any type. - Write a letter of instruction
indicating the fund name, your account
- - Sales of any amount. number, the name(s) in which the
account is registered and the dollar
value or number of shares you wish to
sell.
- Include the account owner
signature(s).
- Mail the materials to American
Performance Funds, c/o BISYS Fund
Services, Attn: T.A. Operations, 3435
Stelzer Road, Columbus, Ohio
43219-3035.
- A check will be mailed to the name(s)
and address in which the account is
registered, or otherwise according to
your letter of instruction.
- ------------------------------------------------------------------------------------
</TABLE>
<PAGE> 103
PROSPECTUS
14
YOUR ACCOUNT
<TABLE>
<CAPTION>
DESIGNED FOR TO SELL SOME OR ALL OF YOUR SHARES
<S> <C>
- ------------------------------------------------------------------------------------
By Phone
- - Accounts of any type. - Call (800) 762-7085 with instructions
as to how you wish to receive your
- - Sales of any amount. funds (mail, wire, electronic
transfer).
- ------------------------------------------------------------------------------------
By Wire
- - Accounts of any type which have elected - Call (800) 762-7085 to request a wire
the wire option on the Account transfer.
Registration Form.
- If you call by 4 p.m. Eastern time,
- - Sales of any amount. your payment will normally be wired to
your bank on the next business day.
- The Fund may charge a wire fee.
- Your bank may charge a fee to wire
funds.
- ------------------------------------------------------------------------------------
By Electronic Funds Transfer
- - Accounts of any type. - Call (800) 762-7085 to request an
electronic funds transfer.
- - Sales of any amount.
- If you call by 4 p.m. Eastern time,
- - Shareholders with accounts at a U.S. the NAV of your shares will normally
bank which participates in the Automated be determined on the same day and the
Clearing House. proceeds will be created within 8
days.
- Your bank may charge a fee to
electronically transfer funds.
- ------------------------------------------------------------------------------------
</TABLE>
Selling Shares in Writing. In certain circumstances, you may need to include a
signature guarantee, which protects you against fraudulent orders. You will need
a signature guarantee unless:
- - the redemption check is payable to the shareholder(s) of record, and
- - the check is mailed to the shareholder(s) of record and mailed to the address
of record.
You should be able to obtain your signature guarantee from a bank, broker,
dealer, credit union, securities exchange or association, clearing agency, or
savings association. A notary public CANNOT provide a signature guarantee.
Receiving Your Money. Normally, payment of your redemption proceeds will be made
as promptly as possible and, in any event, within seven calendar days after
<PAGE> 104
PROSPECTUS
15
the redemption order is received. At various times, however, a Fund may be
requested to redeem shares for which it has not yet received good payment;
collection of payment may take ten or more days. In these circumstances, the
redemption request will be rejected by the Fund. Once a Fund has received good
payment for the shares a shareholder may submit another request for redemption.
If you have made your initial investment by check, you cannot redeem any portion
of it until that check has cleared (which may require up to 10 business days).
You can avoid this delay by purchasing shares with a certified check.
Involuntary Sales of Your Shares. Due to the relatively high costs of handling
small investments, each Fund reserves the right to redeem your shares at net
asset value if your account balance in any Fund drops below $500. Before any
Fund exercises its right to redeem your shares you will be given at least 60
days written notice to give you time to add to your account and avoid selling
your shares.
Refusal of Redemption Request. The Funds may postpone payment for shares at
times when the New York Stock Exchange is closed or under any emergency
circumstances as determined by the Securities and Exchange Commission. If you
experience difficulty making a telephone redemption during periods of drastic
economic or market change, you can send the Funds your request by regular or
express mail. Follow the instructions above under "Selling Your Shares" in this
section.
Redemption In Kind. The Funds reserve the right to make payment in securities
rather than cash, known as "redemption in kind." This could occur under
extraordinary circumstances, such as a very large redemption that could affect
Fund operations (for example, more than 1% of a Fund's net assets). If a Fund
deems it advisable for the benefit of all shareholders, redemption in kind will
consist of securities equal in market value to your shares. When you convert
these securities to cash, you will pay brokerage charges.
Undeliverable Redemption Checks. For any shareholder who chooses to receive
distributions in cash: If distribution checks (1) are returned and marked as
"undeliverable" or (2) remain uncashed for six months, your account will be
changed automatically so that all future distributions are reinvested in your
account. Checks that remain uncashed for six months will be canceled and the
money reinvested in the appropriate Fund.
EXCHANGING SHARES
How to Exchange Your Shares. Shares of any 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 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
<PAGE> 105
PROSPECTUS
16
YOUR ACCOUNT
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. 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.
TRANSACTION POLICIES
Valuation of Shares. The net asset value per share of a Fund is determined by
dividing the total market value of the Fund's investments and other assets, less
any liabilities, by the total number of outstanding shares of the Fund.
- - The net asset value of each of the Money Market Funds is determined on each
business day 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 day in which the NYSE is open for trading, and the Federal
Reserve Bank of Kansas City is open.
- - The assets in each Money Market Fund are valued based upon the amortized cost
method. For further information about valuation of investments, see the
Statement of Additional Information.
- - The net asset value of each of the Money Market Funds is expected to remain at
a constant $1.00 per share, although there is no assurance that this will be
maintained.
Buy and Sell Prices. When you buy shares, you pay the net asset value next
determined after your order is received. When you sell shares, you receive the
net asset value next determined after your order is received.
ADDITIONAL INVESTOR SERVICES
Auto Invest Plan (AIP). AIP lets you set up periodic additional investments in
the Funds of your choice through automatic deductions from your bank account,
through payroll deductions or from your federal employment, Social Security
Income or other periodic government checks. The minimum investment amount is $50
per month or quarter per Fund. To establish, complete the appropriate section in
the Account Registration Form. The minimum initial investment in the AIP is $100
and the minimum for subsequent investments is $50. To participate in AIP from
your paycheck or government check call (800) 762-7085 for an enrollment form. To
participate in AIP from your bank account, please attach a voided check to your
Account Registration Form.
<PAGE> 106
PROSPECTUS
17
Directed Dividend Option. By selecting the appropriate box in the Account
Registration Form, you can elect to receive your distributions in cash (check)
or have distributions (capital gains and dividends) reinvested in another
American Performance Fund without a sales charge. You must maintain the minimum
balance in each Fund into which you plan to reinvest dividends or the
reinvestment will be suspended and your dividends paid to you. The Fund may
modify or terminate this reinvestment option without notice. You can change or
terminate your participation in the reinvestment option at any time.
Systematic Withdrawal Plan (SWP). If you have at least $10,000 in your account,
you may use SWP, which allows you to receive regular distributions from your
account. Under the plan you may elect to receive automatic payments via check of
at least $100 per Fund or more on a monthly or quarterly basis. You may arrange
to receive regular distributions from your account via check by completing the
appropriate section in the Account Registration Form and attaching a voided
check or by calling (800) 762-7085. The maximum withdrawal per year is 12% of
the account value at the time of election.
DIVIDENDS AND DISTRIBUTIONS
As a mutual fund shareholder, you may receive capital gains and/or income from
your investment. The Money Market Funds declare dividends daily and pay income
dividends monthly. The Funds distribute capital gains they have realized, if
any, at least once a year.
We will automatically reinvest any income and capital gains distributions you
are entitled to in additional shares of your Fund(s) unless you notify our
Distributor that you want to receive your distributions in cash. To do so, send
a letter with your request, including your name and account number to:
American Performance Funds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Your request will become effective for distributions having record dates after
our Distributor receives your request. Note that the IRS treats dividends paid
in additional Fund shares the same as it treats dividends paid in cash.
TAXES
Your mutual fund investments may have a considerable impact on your tax
situation. We've summarized some of the main points you should know below. Note,
however, that the following is general information and will not apply to you if
you are investing through a tax-deferred account such as an IRA or a qualified
employee benefit plan. In addition, if you are not a resident of the United
States, you may have to pay taxes besides those described here, such as U.S.
withholding and estate taxes.
<PAGE> 107
PROSPECTUS
18
YOUR ACCOUNT
Important Note: If you have not done so already, be sure to provide us with your
correct taxpayer identification number OR certify that it is correct. Unless we
have that information, the Funds may be required by law to withhold 31% of the
taxable distributions you would otherwise be entitled to receive from your Fund
investments as well as any proceeds you would normally receive from selling Fund
shares.
We will send you a statement each year showing the tax status of all your
distributions. The laws governing taxes change frequently, however, so please
consult your tax adviser for the most up-to-date information and specific
guidance regarding your particular tax situation. You can find more information
about the potential tax consequences of mutual fund investing in our Statement
of Additional Information.
Taxes on Fund Distributions. You may owe taxes on Fund distributions even if
they represent income or capital gains the Fund earned before you invested in it
(for example, if such income or capital gains were included in the price you
initially paid for your shares). Note that you will generally have to pay taxes
on Fund distributions whether you received them in the form of cash or
additional Fund shares. The Internal Revenue Service treats most mutual fund
distributions as ordinary income. One exception is gains from the sale of assets
held by a Fund for more than one year, which, for an individual shareholder are
typically taxed at a lower rate than ordinary income regardless of how long such
shareholder has held Fund shares.
State and Local Taxes. In addition to federal taxes, you may have to pay state
and local taxes on the dividends or capital gains, if any, you receive from a
Fund, as well as on capital gains, if any, you realized from selling or
exchanging Fund shares.
Dividends and Short-Term Capital Gains. The IRS treats any dividends and
short-term capital gains you receive from the Funds as ordinary income.
Funds Investing in Foreign Securities: If your Fund invests in foreign
securities, the income those securities generate may be subject to foreign
withholding taxes, which may decrease their yield. Foreign governments may also
impose taxes on other payments or gains your Fund earns on these securities. In
general, shareholders in these Funds will not be entitled to claim a credit or
deduction for these foreign taxes on their U.S. tax return. (There are some
exceptions, however; please consult your tax adviser for more information.) In
addition, foreign investments may prompt a fund to distribute ordinary income
more frequently and/or in greater amounts than purely domestic funds, which
could increase your tax liability.
The portfolio managers of the Funds do not actively consider tax consequences
when making investment decisions. From time to time, the Funds may realize
capital gains as by-products of ordinary investment activities. As a result, the
<PAGE> 108
PROSPECTUS
19
amount and timing of Fund distributions may vary considerably from year to year.
THESE TAX CONSIDERATIONS MAY OR MAY NOT APPLY TO YOU. PLEASE CONSULT YOUR TAX
ADVISER TO DETERMINE WHETHER THESE CONSIDERATIONS ARE RELEVANT TO YOUR
PARTICULAR INVESTMENTS AND TAX SITUATION. MORE INFORMATION ABOUT TAXES IS IN OUR
STATEMENT OF ADDITIONAL INFORMATION.
<PAGE> 109
PROSPECTUS
20
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Investment Management
INVESTMENT ADVISER
Bank of Oklahoma, N.A. serves as the investment adviser to each of the Funds
and, subject to the supervision of Board of Trustees of the American Performance
Funds, is responsible for the day-to-day management of their investment
portfolios.
Bank of Oklahoma, N.A. 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. 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.
The investment advisory fees paid to Bank of Oklahoma, N.A., after voluntary fee
reductions, by the Funds for the fiscal year ended August 31, 1999, were as
follows:
<TABLE>
<CAPTION>
FUND % OF AVERAGE NET ASSETS
<S> <C>
- U.S. Treasury Fund 0.40%
- Cash Management Fund 0. %*
</TABLE>
* AMR Investment Services, Inc., P.O. Box 619003 Dallas/Ft. Worth Airport, Texas
75261-9003, served as sub-adviser to the Cash Management Fund through April
30, 1999.
<PAGE> 110
PROSPECTUS
21
[FLAG LOGO]
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or, if shorter, the period of each
Fund's operations. Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an investor
would have earned or lost on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been audited by KPMG LLP,
whose report, along with the Funds' financial statements, are included in the
annual report, which is available upon request.
HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE
This explanation uses the U.S. Treasury Fund as an example. The Fund began
fiscal 1999 with a net asset value (price) of $1 per share. During the year, the
fund earned $ per share from investments income (interest and dividends).
Shareholders received $ per share in the form of dividend distributions. A
portion of each year's distributions may come from the prior year's income.
The earnings ($ per share) minus the distributions ($ per share)
resulted in a share price of $1 at the end of the year. For a shareholder who
reinvested the distributions in the purchase of more shares, the total return
from the Fund was % for the year.
As of August 31, 1999, the Fund had $394 million in net assets. For the year,
its expense ratio was 0. % ($ per $1,000 of net assets); and its net
investment income amounted to % of its average net assets.
<PAGE> 111
PROSPECTUS
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[FLAG LOGO]
AMERICAN PERFORMANCE FUNDS
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
INVESTMENT PRACTICES
The Funds invest in a variety of securities and employ a number of investment
techniques. Each security and technique involves certain risks. What follows is
a list of the securities and techniques used by the Funds, as well as the risks
inherent in their use. Equity securities are subject mainly to market risk.
Fixed income securities are primarily influenced by market, credit and
prepayment risks, although certain securities may be subject to additional
risks. For a more complete discussion, see the Statement of Additional
Information. Following the table is a more complete discussion of risk.
<TABLE>
<CAPTION>
FUND NAME FUND CODE
<S> <C>
- U.S. Treasury Fund 1
- Cash Management Fund 2
</TABLE>
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
AMERICAN DEPOSITORY RECEIPTS 2 - Market
(ADRS): - Political
ADRs are foreign shares of a - Foreign
company held by a U.S. bank that Investment
issues a receipt evidencing
ownership. Dividends are paid in
U.S. dollars.
- -------------------------------------------------------------------------
ASSET-BACKED SECURITIES: 2 - Pre-payment
Securities secured by company - Market
receivables, home equity loans, - Credit
truck and auto loans, leases, - Regulatory
credit card receivables and other
securities backed by other types of
receivables or other assets.
- -------------------------------------------------------------------------
BANKERS' ACCEPTANCES: 2 - Credit
Bills of exchange or time drafts - Liquidity
drawn on and accepted by a - Market
commercial bank. Maturities are
generally six months or less.
</TABLE>
<PAGE> 112
PROSPECTUS
23
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
CALL AND PUT OPTIONS: 2 - Management
A call option gives the buyer the - Liquidity
right to buy, and obligates the - Credit
seller of the option to sell, a - Market
security at a specified price. A - Leverage
put option gives the buyer the
right to sell, and obligates the
seller of the option to buy a
security at a specified price. The
Funds will sell only covered call
and secured put options.
- -------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT: 2 - Market
Negotiable instruments with a - Credit
stated maturity. - Liquidity
- -------------------------------------------------------------------------
COMMERCIAL PAPER: 2 - Credit
Secured and unsecured short-term - Liquidity
promissory notes issued by - Market
corporations and other entities.
Maturities generally vary from a
few days to nine months.
- -------------------------------------------------------------------------
ILLIQUID SECURITIES: 1, 2 - Liquidity
Each Fund may invest up to 10% of - Market
its net assets in securities that
are illiquid. Illiquid securities
are those securities which cannot
be disposed of in the ordinary
course of business, seven days or
less, at approximately the value at
which the Fund has valued the
securities.
- -------------------------------------------------------------------------
LOAN PARTICIPATION INTERESTS: 2 - Market
Loan participation interests are - Liquidity
interests in bank loans made to - Credit
corporations. In these arrangements
the bank transfers the cash stream
of the underlying bank loan to the
participating investor.
</TABLE>
<PAGE> 113
PROSPECTUS
24
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
MONEY MARKET INSTRUMENTS: 2 - Market
Investment-grade, U.S. - Credit
dollar-denominated debt securities
that have remaining maturities of
one year or less. These securities
may include U.S. government
obligations, commercial paper and
other short-term corporate
obligations, repurchase agreements
collateralized with U.S. government
securities, certificates of
deposit, bankers' acceptances, and
other financial institution
obligations. These securities may
carry fixed or variable interest
rates.
- -------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES: 1, 2 - Pre-payment
Debt obligations secured by real - Market
estate loans and pools of loans. - Credit
These include collateralized - Regulatory
mortgage obligations and real
estate mortgage investment
conduits.
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS: 1, 2 - Market
The purchase of a security and the - Leverage
simultaneous commitment to return
the security to the seller at an
agreed upon price on an agreed upon
date. This is treated as a loan.
- -------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS: 1, 2 - Market
The sale of a security and the - Leverage
simultaneous commitment to buy the
security back at an agreed upon
price on an agreed upon date. This
is treated as a borrowing by a
Fund.
- -------------------------------------------------------------------------
RESTRICTED SECURITIES: 2 - Liquidity
Securities not registered under the - Market
Securities Act of 1933, such as
privately placed commercial paper
and Rule 144A securities.
</TABLE>
<PAGE> 114
PROSPECTUS
25
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
SECURITIES LENDING: 1, 2 - Market
The lending of up to 33 1/3% of a - Leverage
Fund's total assets. In return the - Liquidity
Fund will receive cash, other - Credit
securities, and/or letters of
credit.
- -------------------------------------------------------------------------
TIME DEPOSITS: 2 - Liquidity
Non-negotiable receipts issued by a - Credit
bank in exchange for the deposit of - Market
funds.
- -------------------------------------------------------------------------
TREASURY RECEIPTS: 1, 2 - Market
Treasury receipts, Treasury
investment growth receipts, and
certificates of accrual of Treasury
securities.
- -------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES: 1, 2 - Market
Securities issued by agencies and - Credit
instrumentalities of the U.S.
government. These include Ginnie
Mae, Fannie Mae, and Freddie Mac.
- -------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS: 1, 2 - Market
Bills, notes, bonds, separately
traded registered interest and
principal securities, and coupons
under bank entry safekeeping.
- -------------------------------------------------------------------------
VARIABLE AND FLOATING RATE 2 - Credit
INSTRUMENTS: - Liquidity
Obligations with interest rates - Market
which are reset daily, weekly,
quarterly or some other period and
which may be payable to the Fund on
demand.
- -------------------------------------------------------------------------
WHEN-ISSUED SECURITIES: 1, 2 - Market
Contract to purchase securities at - Leverage
a fixed price for delivery at a - Liquidity
future date. - Credit
</TABLE>
<PAGE> 115
PROSPECTUS
26
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
INVESTMENT RISKS
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "What are the main risks of investing in this Fund?" Because of
these risks, the value of the securities held by each Fund may fluctuate, as
will the value of your investment in the Fund. Certain investments and Funds are
more susceptible to these risks than others.
- - Credit Risk.
The risk that the issuer of a security, or the counterparty to a contract,
will default or otherwise become unable to honor a financial obligation.
Credit risk is generally higher for non-investment grade securities. The price
of a security can be adversely affected prior to actual default as its credit
status deteriorates and the probability of default rises.
- - Foreign Investment Risk.
The risk associated with higher transaction costs, delayed settlements,
currency controls and adverse economic developments. This also includes the
risk that fluctuations in the exchange rates between the U.S. dollar and
foreign currencies may negatively affect an investment. Adverse changes in
exchange rates may erode or reverse any gains produced by foreign currency
denominated investments and may widen any losses. Exchange rate volatility
also may affect the ability of an issuer to repay U.S. dollar denominated
debt, thereby increasing credit risk. Foreign securities may also be affected
by incomplete or inaccurate financial information on companies, social
upheavals or political actions ranging from tax code changes to governmental
collapse. These risks are more significant in emerging markets.
- - Leverage Risk.
The risk associated with securities or practices that multiply small index or
market movements into large changes in value. Leverage is often associated
with investments in derivatives, but also may be embedded directly in the
characteristics of other securities. Leverage risk is hedged when a derivative
(a security whose value is based on another security or index) is used as a
hedge against an opposite position that a Fund also holds, any loss generated
by the derivative should be substantially offset by gains on the hedged
investment, and vice versa. Hedges are sometimes subject to imperfect matching
between the derivative and underlying security, and there can be no assurance
that a Fund's hedging transactions will be effective.
- - Liquidity Risk.
The risk that certain securities may be difficult or impossible to sell at the
time and the price that would normally prevail in the market. The seller may
have to lower the price, sell other securities instead or forego an investment
opportunity, any of which could have a negative effect on Fund management or
performance. This includes the risk of missing out on an investment
<PAGE> 116
PROSPECTUS
27
opportunity because the assets necessary to take advantage of it are tied up
in less advantageous investments.
- - Management Risk.
The risk that a strategy used by a Fund's portfolio manager may fail to
produce the intended result. This includes the risk that changes in the value
of a hedging instrument will not match those of the asset being hedged.
Incomplete matching can result in unanticipated risks.
- - Market Risk.
The risk that the market value of a security may move up and down, sometimes
rapidly and unpredictably. These fluctuations may cause a security to be worth
less than the price originally paid for it, or less than it was worth at an
earlier time. Market risk may affect a single issuer, industrial sector of the
economy or the market as a whole. There is also the risk that the current
interest rate may not accurately reflect existing market rates. For fixed
income securities, market risk is largely, but not exclusively, influenced by
changes in interest rates. A rise in interest rates typically causes a fall in
values, while a fall in rates typically causes a rise in values. Finally, key
information about a security or market may be inaccurate or unavailable. This
is particularly relevant to investments in foreign securities.
- - Political Risk.
The risk of losses attributable to unfavorable governmental or political
actions, seizure of foreign deposits, changes in tax or trade statutes, and
governmental collapse and war.
- - Pre-Payment/Call Risk.
The risk that the principal repayment of a security will occur at an
unexpected time. Prepayment risk is the chance that the repayment of a
mortgage will occur sooner than expected. Call risk is the possibility that
during periods of falling interest rates, a bond issuer will "call" -- or
repay -- its high-yielding bond before the bond's maturity date. Changes in
pre-payment/call rates can result in greater price and yield volatility.
Pre-payments/calls generally accelerate when interest rates decline. When
mortgage and other obligations are pre-paid, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income -- and the potential for taxable capital gains. Further,
with early prepayment, a Fund may fail to recover any premium paid, resulting
in an unexpected capital loss. Prepayment/call risk is generally low for
securities with a short-term maturity, moderate for securities with an
intermediate-term maturity, and high for securities with a long-term maturity.
- - Regulatory Risk.
The risk associated with Federal and state laws which may restrict the
remedies that a lender has when a borrower defaults on loans. These laws
include restrictions on foreclosures, redemption rights after foreclosure,
Federal
<PAGE> 117
PROSPECTUS
28
ADDITIONAL INVESTMENT
PRACTICES AND RISKS
and state bankruptcy and debtor relief laws, restrictions on "due on sale"
clauses, and state usury laws.
- - Year 2000 Risk.
The American Performance Funds depends on the smooth functioning of computer
systems in almost every aspect of its business. Like other mutual funds,
businesses and individuals around the world, the American Performance Funds
could be adversely affected if the computer systems used by its service
providers do not properly process dates on and after January 1, 2000 and
distinguish between the year 2000 and the year 1900. The American Performance
Funds has made inquiry of its service providers to determine whether they
expect to have their computer systems adjusted for the year 2000 transition,
and has received an assurance from each service provider that it expects its
system to accommodate the year 2000 transition without material adverse
consequences to the American Performance Funds. While such assurances have
been obtained, the American Performance Funds and its shareholders may
experience losses if these assurances prove to be incorrect or as a result of
year 2000 computer difficulties experienced by issuers of portfolio securities
or custodians, banks, broker-dealers or others with which the American
Performance Funds does business.
<PAGE> 118
PROSPECTUS
29
[FLAG LOGO]
AMERICAN PERFORMANCE FUNDS
Glossary of Investment Terms
DIVIDENDS.
Payment to shareholders of income from interest or dividends generated by a
fund's investments.
INVESTMENT ADVISER.
An organization that makes the day-to-day decisions regarding a fund's
investments.
LIQUIDITY.
The degree of a security's marketability (that is, how quickly the security can
be sold at a fair price and converted to cash).
MONEY MARKET FUND.
A mutual fund that seeks to provide income, liquidity, and a stable share price
by investing in very short-term, liquid investments.
MONEY MARKET INSTRUMENTS.
Short-term, liquid investments (usually with a maturity of 13 months or less)
which include U.S. Treasury bills, bank certificates of deposit (CDs),
repurchase agreements, commercial paper, and banker's acceptances.
MUTUAL FUND.
An investment company that pools the money of many people and invests it in a
variety of securities in an effort to achieve a specific objective over time.
NET ASSET VALUE (NAV).
The market value of mutual fund's total assets, minus liabilities, divided by
the number of shares outstanding. The value of a single share is called its
share value or share price.
OPERATING EXPENSES.
The percentage of a fund's average net assets used to pay its expenses.
Operating expenses include investment advisory fees, distribution/service
(12b-1) fees, and administration fees.
SECURITIES.
Stocks, bonds, money market instruments, and other investment vehicles.
TOTAL RETURN.
A percentage change, over a specified time period, in a mutual fund's net asset
value, with the ending net asset value adjusted to account for the reinvestment
of all distributions of dividends and capital gains.
VOLATILITY.
The fluctuations in value of a mutual fund or other security. The greater fund's
volatility, the wider the fluctuations between its high and low prices.
YIELD.
Income (interest or dividends) earned by an investment, expressed as a
percentage of the investment's price.
<PAGE> 119
PROSPECTUS
30
[FLAG LOGO]
AMERICAN PERFORMANCE FUNDS
MORE INFORMATION
More information about the Funds is available
without charge through the following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
More detailed information about the American
Performance Funds is included in our SAI. The
SAI has been filed with the SEC and is
incorporated by reference into this prospectus.
This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list the Funds' holdings and
contain information on the market conditions and
investment strategies that significantly
affected the American Performance Funds'
performance during the last year.
TO OBTAIN THE SAI, ANNUAL OR SEMI-ANNUAL
REPORTS, OR MORE INFORMATION:
BY TELEPHONE:
Call 1-800-762-7085
BY MAIL:
American Performance Funds
3435 Stelzer Road
Columbus, Ohio 43219-3035
BY INTERNET:
http://www.apfunds.com
FROM THE SEC:
You can also obtain the SAI, the Annual and
Semi-Annual Reports, and other information about
the American Performance Funds, from the SEC's
web site (http://www.sec.gov). You may review
and copy documents at the SEC Public Reference
Room in Washington, DC (for information call
1-800-SEC-0330). You may request documents by
mail from the SEC, upon payment of a duplicating
fee, by writing to: Securities and Exchange
Commission, Public Reference Section, 450 5th
Street, N.W., Washington, DC 20549-6009.
American Performance Funds' Investment Company
Act registration number is 811-6114.
INVESTMENT ADVISER
Bank of Oklahoma, N.A.
Bank Oklahoma Tower
Tulsa, Oklahoma 74103
DISTRIBUTOR &
ADMINISTRATOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio
43219-3035
LEGAL COUNSEL
Ropes & Gray
1301 K Street, N.W.,
Suite 800 East
Washington, DC 20005
<PAGE> 120
CROSS REFERENCE SHEET
---------------------
AMERICAN PERFORMANCE FUNDS
--------------------------
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
Form N-1A Part B Item
- ---------------------
10. Cover Page and Table of Contents Cover Page; Table of Contents
11. Fund History The Funds; Additional Information
12. Description of the Funds and Its The Funds; Investment Objective and
Investments and Risks Policies; Additional Information -
Description of Shares
13. Management of the Fund Management and Service Providers
of the Funds
14. Control Persons and Principal Additional Information -
Holders of Securities Miscellaneous
15. Investment Advisory and Management and Service Providers
Other Services of the Funds
16. Brokerage Allocation Management of the Funds - Portfolio
and Other Practices Transactions
17. Capital Stock and Other Valuation; Additional Purchase and
Securities Redemption Information; Additional
Information
18. Purchase, Redemption and Valuation; Additional Purchase and
Pricing of Shares Redemption Information; Management
and Service Providers of the Funds
<PAGE> 121
19. Taxation of the Fund 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
20. Underwriters Management and Service Providers
of the Funds - Distributor;
Management and Service Providers of
the Funds - Distribution
21. Calculation of Performance Additional Information -
Data Calculation of Performance Data
22. Financial Statements Financial Statements
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.
-2-
<PAGE> 122
STATEMENT OF ADDITIONAL INFORMATION
AMERICAN PERFORMANCE FUNDS
AMERICAN PERFORMANCE MONEY MARKET FUNDS
AMERICAN PERFORMANCE BOND FUNDS
AMERICAN PERFORMANCE EQUITY FUNDS
January 1, 2000
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 Funds, and the American Performance Equity
Funds, each dated January 1, 2000. 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 (800)
762-7085.
<PAGE> 123
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
<S> <C>
THE FUNDS......................................................................1
INVESTMENT OBJECTIVE AND POLICIES..............................................1
ADDITIONAL INFORMATION ON THE FUNDS......................................1
The Money Market Funds..........................................1
The Bond Funds..................................................2
The Equity Funds................................................3
ADDITIONAL INFORMATION ON FUND INSTRUMENTS...............................5
Asset-Backed Securities.........................................5
Bank Obligations................................................5
Calls ........................................................7
Foreign Investments.............................................9
Futures Contracts..............................................10
Investment Company Securities..................................11
Loan Participation.............................................12
Mortgage-Related Securities....................................12
Municipal Securities...........................................14
Options .......................................................15
Private Placement Investments..................................16
Puts .......................................................17
Repurchase Agreements..........................................17
Reverse Repurchase Agreements..................................18
Securities Lending.............................................18
U.S. Government Obligations....................................19
Variable Amount and Floating Rate Notes........................19
When-Issued Securities.........................................19
Zero Coupon Obligations........................................19
INVESTMENT RESTRICTIONS.................................................20
PORTFOLIO TURNOVER......................................................24
ADDITIONAL TAX INFORMATION CONCERNING ALL THE FUNDS ....................25
ADDITIONAL TAX INFORMATION CONCERNING THE
INTERMEDIATE TAX-FREE BOND FUND................................27
VALUATION.....................................................................29
THE MONEY MARKET FUNDS..................................................29
THE BOND FUNDS AND THE EQUITY FUNDS.....................................29
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION................................30
MANAGEMENT AND SERVICE PROVIDERS OF THE FUNDS.................................30
</TABLE>
-i-
<PAGE> 124
<TABLE>
<S> <C>
TRUSTEES AND OFFICERS...................................................30
INVESTMENT ADVISER......................................................32
DISTRIBUTION............................................................35
GLASS-STEAGALL ACT......................................................36
PORTFOLIO TRANSACTIONS..................................................37
ADMINISTRATOR...........................................................39
SUB-ADMINISTRATOR.......................................................40
DISTRIBUTOR.............................................................41
CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTANT...........................41
LEGAL COUNSEL...........................................................43
ADDITIONAL INFORMATION........................................................43
DESCRIPTION OF SHARES...................................................43
SHAREHOLDER AND TRUSTEE LIABILITY.......................................44
CALCULATION OF PERFORMANCE DATA ......................................45
PERFORMANCE COMPARISONS.................................................47
MISCELLANEOUS...........................................................49
FINANCIAL STATEMENTS..........................................................53
APPENDIX......................................................................54
</TABLE>
-ii-
<PAGE> 125
THE FUNDS
The American Performance Funds (the "Funds") is a diversified open-end
management investment company. The Funds presently consist of ten series of
units of beneficial interest ("Shares"), representing interests in of the
following portfolios:
American Performance U.S. Treasury Fund (the "U.S. Treasury Fund")
American Performance Cash Management Fund (the "Cash Management Fund")
American Performance Bond Fund (the "Bond Fund")
American Performance Intermediate Bond Fund (the "Intermediate Bond
Fund")
American Performance Intermediate Tax-Free Bond Fund (the "Intermediate
Tax-Free Bond Fund")
American Performance Short-Term Income Fund (the "Short-Term Income
Fund") American Performance Equity Fund (the "Equity Fund") American
Performance Balanced Fund (the "Balanced Fund") American Performance
Growth Equity Fund (the "Growth Equity Fund") American Performance
Small Cap Equity Fund ("Small Cap Equity Fund")
The U.S. Treasury Fund and the Cash Management Fund are sometimes
referred to as the "Money Market Funds," the Bond Fund, the Intermediate Bond
Fund, the Intermediate Tax-Free Bond Fund, and the Short-Term Income Fund are
sometimes referred to as the "Bond Funds," and the Equity Fund, the Balanced
Fund, the Growth Equity Fund, and the Small Cap Equity Fund are sometimes
referred to as the "Equity Funds." The information contained in this document
expands upon subjects discussed in the Prospectuses for the Funds. An investment
in a Fund should not 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 THE FUNDS
- -----------------------------------
The 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. Obligations purchased by
the
B-1
<PAGE> 126
Money Market Funds are limited to U.S. dollar-denominated obligations which the
Board of Trustees has determined present minimal credit risks.
The Cash Management 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 ("S&P") and "Prime-1" by Moody's
Investors Services, Inc. ("Moody's")); 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 Appendix for definitions of the foregoing instruments and
rating systems.
The Fund may, from time to time, concentrate its investments in certain
securities issued by U.S. banks, U.S. branches of foreign banks and foreign
branches of U.S. banks. 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
Bank of Oklahoma, N.A. ("BOK" or "Adviser") or any of its affiliates.
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 Adviser deems
the credit risk with respect thereto to be minimal.
The Bond Funds
- --------------
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 an NRSRO (e.g., at least "A" from
Moody's), or S&P (including all sub-classifications indicated by modifiers of
such "A" ratings)) or, if unrated, are deemed by the
B-2
<PAGE> 127
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" for an explanation of these ratings.
The Bond Fund, the Intermediate Bond Fund, and the Short-Term Income
Fund, 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' Adviser,
more than 35% of the Bond Fund's, the Intermediate Bond Fund's, or the
Short-Term Income Fund's assets may be held in cash equivalents. For purposes of
the above-stated policies, "bonds" includes any debt instrument with a remaining
maturity of one year or more.
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.
Bonds, notes, and debentures in which the Bond Funds may invest may
differ in interest rates, maturities and times of issuance. The market value of
the Bond 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 NRSROs 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 under conditions of default, changes in
the value of a Bond Fund's portfolio securities will not affect cash income
derived from these securities but will affect a Bond Fund's net asset value.
The Equity Funds
- ----------------
Under normal market conditions, the Equity Fund and the Growth Equity
Fund will invest at least 70% and the Small Cap Equity Fund will invest at least
65% of the value of their respective total assets in common stocks and
securities convertible into common stocks of companies believed by the Adviser
to be characterized by sound management and the ability to finance expected
growth. The Equity Fund, the Growth Equity Fund, and the Small Cap Equity Fund
may also invest up to 30% of their respective total assets in preferred stocks,
corporate
B-3
<PAGE> 128
bonds, notes, warrants, and cash equivalents. Corporate bonds will be rated at
the time of purchase within the three highest ratings categories assigned by an
NRSRO (e.g., at least "A" by Moody's or S&P) or, if not rated, found by the
Adviser under guidelines established by the Funds' Board of Trustees to be of
comparable quality.
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 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 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.
B-4
<PAGE> 129
ADDITIONAL INFORMATION ON FUND INSTRUMENTS
- ------------------------------------------
ASSET-BACKED SECURITIES
-----------------------
The Cash Management Fund, Bond Fund, the Intermediate Bond Fund, and
the Short-Term Income Fund 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 over-collateralization. These 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.
BANK OBLIGATIONS
----------------
The Cash Management Fund, the Bond Funds, and the Equity 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.
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 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.
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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 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.
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 Adviser under
guidelines established by the Funds' Board of Trustees to be of comparable
quality.
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CALLS
-----
The Bond Funds and the Equity 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 obligation of the writer of a call
option continues, the writer may be assigned an exercise
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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 Bond Funds and the Equity 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 Bond
Funds and the Equity 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 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 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
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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.
FOREIGN INVESTMENTS
-------------------
The Cash Management Fund, the Bond Fund, the Intermediate Bond Fund,
the Short-Term Income Fund, and the Equity Funds 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
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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.
Special U.S. tax considerations may apply to a Fund's foreign investments.
Each Equity Fund may also 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).
The Bond, Intermediate Bond, and Short-Term Income Funds may also
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.
FUTURES CONTRACTS
-----------------
The Bond Funds and the Equity 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.
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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 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 Bond Fund's or an Equity
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 a Bond Fund's or an Equity Fund's total assets. Futures
transactions will be limited to the extent necessary to maintain each Bond
Funds' or Equity Funds' qualification as a regulated investment company ("RIC").
INVESTMENT COMPANY SECURITIES
-----------------------------
Each Bond Fund and Equity Fund may invest in shares of other investment
companies, including the American Performance Money Market Funds. However, none
of the Bond Funds or the Equity Funds may invest more than 5% of its total
assets in the securities of any one investment company, nor may any Bond Fund or
any Equity 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 Adviser will consider this fee
in its investment analysis when determining whether to purchase shares of these
companies for a Bond Fund or an Equity Fund. This fee is in addition to the fees
received by a Bond Fund's or an Equity Fund's Adviser and Administrator. In
order to avoid the imposition of additional fees as a result of investments by a
Bond Fund or an Equity Fund in shares of the American Performance Money Market
Funds, the Adviser and Administrator have agreed to promptly forward to the
appropriate Bond Fund or the appropriate Equity Fund any portion of their usual
asset-based service fees from an American Performance Money Market Fund which is
attributable to investment by the appropriate Bond Fund or the appropriate
Equity Fund in shares of the American Performance Money Market Fund.
LOAN PARTICIPATION
------------------
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
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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 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. The Cash Management Fund intends to limit investments in loan
participation interests to 5% of its total assets.
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 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-
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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 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.
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 and the Balanced Fund also may invest in
collateralized mortgage obligations structured on pools of mortgage pass-through
certificates or mortgage loans. The Cash Management Fund will only invest in
collateralized mortgage obligations which meet the quality requirements of Rule
2a-7 under the 1940 Act. 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 Adviser under guidelines
established by the Funds' Board of Trustees to be of comparable quality.
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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 income from which is exempt from federal
income taxes (subject to the possible incidence of any Federal alternative
minimum tax). The Bond Fund, the Intermediate Bond Fund and the Short-Term
Income Fund, under normal market conditions, may invest in Municipal Securities
the income from which is 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, 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.
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 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
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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., "VMIG-1" 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 Adviser pursuant to guidelines approved by the Funds'
Board of Trustees. The applicable Municipal Securities ratings are described in
the Appendix.
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 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 Adviser will consider such an event in determining whether the
Fund should continue to hold the obligations.
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
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.
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
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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.
OPTIONS
-------
The Bond Funds and the Equity 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 Bond Funds and the Equity 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 Bond Funds and Equity 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.
PRIVATE PLACEMENT INVESTMENTS
-----------------------------
The Cash Management Fund, the Bond Funds, and the Equity 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, 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 Fund will invest more than 10% of its net assets in
Section 4(2) paper and illiquid securities unless the Adviser determines, by
continuous reference to the appropriate trading markets and pursuant to
guidelines approve by the Board of Trustees, that any Section 4(2) paper held by
a Fund in excess of this level is at all times liquid.
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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 Adviser, pursuant to the guidelines approved by the
Board of Trustees, will carefully monitor the 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 Fund's liquidity to the extent that
qualified institutional buyers become for a time not interested in purchasing
these restricted securities.
PUTS
----
The Cash Management Fund, the Bond Funds, and the Equity Funds 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.
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 Adviser's opinion, present minimal credit risks.
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 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
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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 1940 Act.
REVERSE REPURCHASE AGREEMENTS
-----------------------------
Each 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 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 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 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 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.
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 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 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 Adviser has determined are creditworthy
under guidelines established by the Funds' Board of Trustees. Each Bond Fund and
the Equity Fund will limit securities loans to 331/3% of the value of its total
net assets.
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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. 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 Adviser believes
that the credit risk with respect thereto is minimal.
VARIABLE AMOUNT AND FLOATING RATE NOTES
---------------------------------------
Variable amount and floating rate notes: Commercial paper eligible for
investment by the Cash Management Fund, the Bond Funds, and the Equity 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 Adviser or 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 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. 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.
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 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 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 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 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 dollar-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.
Variable or floating rate notes with stated maturities of more than one
year may, based on the amortized cost valuation technique pursuant to Rule 2a-7
under the 1940 Act, be deemed to have shorter maturities in accordance with such
Rule.
WHEN-ISSUED SECURITIES
----------------------
Each 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. A Fund relies on the seller to consummate the trade and
will generally not pay for such securities or start earning interest on them
until they are received. When a 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 Fund. Failure of the seller to consummate the trade may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous. 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 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 exceed 25% of the value of its assets, a
Fund's liquidity and the ability of the Adviser to manage it might be severely
affected. No Fund intends to purchase when-issued securities for speculative
purposes but only in furtherance of its investment objective.
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. government
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
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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.
Even though such bonds do not pay current interest in cash, a Fund
nonetheless is required to accrue interest income on these investments and to
distribute the interest income on a current basis. Thus, a Fund could be
required at times to liquidate other investments in order to satisfy its
distribution requirements.
TEMPORARY DEFENSIVE POSITIONS
- -----------------------------
During temporary defensive periods as determined by the Adviser, the
Bond Fund, the Intermediate Bond Fund, the Short-Term Income Fund, and the
Equity Funds may hold up to 100% of its total assets in cash equivalents. The
Intermediate Tax-Free Bond Fund may invest in short-term Municipal Securities up
to 100% of its assets during temporary defensive periods.
During temporary defensive purposes as determined by the Adviser the
Cash Management Fund will not maintain its concentration in the banking industry
if it may be inconsistent with the best interest of Shareholders.
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 Shares of that Fund.
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 Bond Funds and the Equity 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.
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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 Bond Funds, and the Equity 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 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, and the Small Cap
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 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. As of the date of this SAI, the
State of Arkansas did not require this restriction.
In addition, the Money Market Funds may not:
1. Buy common stocks or voting securities, or state, municipal, or
private activity bonds.
2. 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.*
- --------------------
* 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> 146
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, 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.
The U.S. Treasury Fund may not:
1. 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.
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.
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The Cash Management Fund may not:
1. 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.
2. 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.
3. 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.
4. Purchase any securities which would cause more than 25% of the value
of the 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, repurchase agreements secured by obligations of the U.S.
government or its agencies or instrumentalities, bank certificates of deposits,
bankers' acceptances, and repurchase agreements secured by bank instruments
(such bank certificates of deposits, bankers' acceptances, and repurchase
agreements secured by bank instruments may be issued or guaranteed by U.S. banks
and U.S. branches of foreign banks); (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.*
* On December 16, 1999, the shareholders of the Cash Management Fund approved
the adoption of this investment restriction. Prior to its adoption the Fund
concentrated its investments in obligations issued by the banking industry.
The implementation of this new investment restriction will occur gradually as
the Fund's obligations issued by the banking industry mature.
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.
2. 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
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purpose of this investment restriction and Investment Restriction Number 3
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.
3. 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.
The Bond Funds and the Equity Funds may not:
1. 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 non-governmental user, such
non-governmental user.
2. 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) with respect to the Bond Funds, 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. Borrow money or issue senior securities, except that each 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 Fund's total assets at
the time of its borrowing. No Fund will purchase securities while its borrowings
(including reverse repurchase agreements) exceed 5% of its total assets.
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4. Make loans, except that each Fund may, in accordance with its
investment objectives and policies, purchase or hold debt instruments, lend
portfolio securities, and enter into repurchase agreements.
5. 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.
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
(including an increase in short-term capital gains which are generally taxed to
individual shareholders at ordinary income tax rates) to a Fund's Shareholders.
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
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<PAGE> 150
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 90%
of the sum of its taxable net investment income, its net tax-exempt income and
the excess, if any, of net short-term capital gains over net long-term capital
losses for such year. Each Fund intends to make sufficient distributions to
Shareholders to meet this requirement.
Distributions from a Fund (other than exempt-interest dividends, as
discussed below) generally will be taxable to shareholders as ordinary income to
the extent derived from the Fund's investment income and short-term capital
gains. Distributions of long-term capital gains will be taxable to shareholders
as such, regardless of how long a shareholder has held shares of the Fund.
Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be required to be
distributed even when a Fund's net asset value also reflects unrealized losses.
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 at least equal to the sum of 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, convert long-term capital gains into short-term
capital gains, 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
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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 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, including the potential application of foreign, state and local
taxes.
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
B-27
<PAGE> 152
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 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 net capital gains (i.e., 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
Fund intends to/will distribute net capital gains, if any, at least once a year
and such distributions will generally be taxable to Shareholders. 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 accorded RICs and their shareholders, 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.
B-28
<PAGE> 153
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.
Interest income from certain types of municipal securities may
constitute a preference item for individuals for purposes of the federal
alternative minimum tax. 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.
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 Adviser will review the proceedings
relating to the issuance of Municipal Securities or the basis for such opinions.
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.
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
B-29
<PAGE> 154
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 FUNDS AND THE EQUITY FUNDS
- -----------------------------------
Except as noted below, the Bond Funds and the Equity Funds will value
securities for which the principal market is a securities exchange, at their
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. In addition to purchasing Shares
directly from the Distributor, Shares may be 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 Funds'
Distribution and Shareholder Services Plan. Customers purchasing Shares of the
Funds may include officers, directors, or employees of the Adviser and its
affiliates.
B-30
<PAGE> 155
<TABLE>
FEE TABLE
---------
<CAPTION>
INTERMEDIATE SHORT-TERM
INTERMEDIATE TAX-FREE INCOME
BOND FUND BOND FUND BOND FUND FUND
--------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses(1)
- -----------------------------------
Maximum Sales Load
Imposed on Purchases(2) 4.00% 3.00% 3.00% 2.00%
(as a percentage of offering price)
Maximum Sales Load Imposed
on Reinvested Dividends 0% 0% 0% 0%
(as a percentage of offering price)
Deferred Sales Load(3) 0% 0% 0% 0%
(as a percentage of original purchase
price or redemption proceeds, if applicable)
Redemption Fees(4) 0% 0% 0% 0%
(as a percentage of amount redeemed,
if applicable)
Exchange Fees $0 $0 $0 $0
</TABLE>
- ------------
(1) Participating organizations may charge a Customer's account fees
for automatic investment and other investment and trust services provided in
connection with investment in the Funds.
(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; (7) investors within wrap accounts; (8)
investors who purchase in connection with 401(k) plans, 403(b) plans, and other
employer-sponsored, qualified retirement plans; and (9) investors who purchase
in connection with non-transactional fee fund programs and programs offered by
fee-based financial planners and other types of financial institutions.
(3) A Contingent Deferred Sales Load of 1.00% for the Bond Fund, 0.75%
for the Intermediate Bond Fund and Intermediate Tax-Free Bond Fund, and 0.50%
for the Short-Term Income Fund will be assessed against the proceeds of any
redemption request relating to Shares of that Fund which were purchased without
a sales charge in reliance upon the waiver accorded to purchases in the amount
of $1 million or more, but only where such redemption request is made within one
year of the date the Shares were purchased.
(4) 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.
B-31
<PAGE> 156
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 AND SERVICE PROVIDERS OF THE FUNDS
TRUSTEES AND OFFICERS
- ---------------------
BISYS - PLEASE UPDATE AGES
The names of the trustees and the officers of the Funds, their
addresses, and principal occupations during the past five years are as follows:
<TABLE>
<CAPTION>
Position(s) Held Principal Occupation
Name, Address, and Age With the Funds During Past 5 Years
- ---------------------- -------------- -------------------
<S> <C> <C>
Walter B. Grimm*, 54 Chairman, From June, 1992 to
3435 Stelzer Road President, and present, employee of
Columbus, OH 43219 Trustee BISYS Fund Services.
Michael J. Hall, 55 Trustee From September, 1998 to
10701 E. Ute Street present, Vice President
Tulsa, Oklahoma 74116 Finance and Chief
Financial Officer and
Director, Matrix Service
Company; from December
1995 to November, 1997,
Vice President and Chief
Financial Officer,
Worldwide Sports &
Recreation, Inc.; from
January, 1994 to
November, 1997, Vice
President and Chief
Financial Officer, Pexco
Holdings, Inc.
I. Edgar Hendrix, 54 Trustee From June, 1983 to May,
8 East 3rd Street 1999, Vice President and
Tulsa, Oklahoma 74103 Treasurer, Parker
Drilling Co.; May 1999
to present, Financial
Consultant.
</TABLE>
B-32
<PAGE> 157
<TABLE>
<S> <C> <C>
Perry A. Wimpey, 67 Trustee From January, 1992 to
4843 S. 69th East Ave. present, Local Financial
Tulsa, Oklahoma 74145 and Regulatory
Consultant.
Alaina V. Metz*, 32 Assistant Secretary From June, 1995 to
3435 Stelzer Road present, employee of
Columbus, OH 43219 BISYS Fund Services;
from May 1989 to June
1995, Supervisor, Mutual
Fund Legal Department,
Alliance Capital
Management.
Jeffrey Shiverdecker, 37 Treasurer From July, 1996 to
3435 Stelzer Road present, employee of
Columbus, OH 43219 BISYS Fund Services;
from December 1990 to
July 1996, Manager,
Investor Fiduciary Trust
Company; from October
1980 to 1990, Production
Engineer, The Coca-Cola
Company.
Jeffrey Cusick*, 40 Vice President and From July, 1995 to
3435 Stelzer Road Secretary present, employee of
Columbus, OH 43219 BISYS Fund Services;
from September 1993 to
July 1995, Assistant
Vice President,
Federated Administration
Services; from 1989 to
September 1993, Client
Services Manager,
Federated Administration
Services.
</TABLE>
- ----------------
* Messrs. Grimm and Cusick and Ms. Metz are each considered to be 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 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 for acting as Administrator
and may receive additional income under the Distribution Plan of the Funds.
B-33
<PAGE> 158
<TABLE>
COMPENSATION TABLE (1)
----------------------
<CAPTION>
Total Compensation
Aggregate Compensation Pension or Retirement Estimated Annual from the American
Name of Person, from the American Benefits Accrued As Benefits Upon Performance Funds
Position Performance Funds Part of Fund Expenses Retirement Paid to Trustee
- --------------- ---------------------- --------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Walter B. Grimm $ 0 NONE NONE $ 0
Michael J. Hall $___ NONE NONE $___
Perry A. Wimpey $___ NONE NONE $___
I. Edgar Hendrix $___ NONE NONE $___
</TABLE>
(1) Figures are for the Funds' fiscal year ended August 31, 1999.
INVESTMENT ADVISER
- ------------------
Investment advisory services are provided to each of the Funds by BOK,
pursuant to an Investment Advisory Agreement.
BOK, the largest trust company headquartered 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 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 Oklahoma, Arkansas, Texas and New Mexico 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 July 31, 1999 BOK was responsible for approximately $12.3 billion in assets
including approximately $5.7 billion in assets under management and possessed
average equity capital at $429 million.
B-34
<PAGE> 159
Subject to the general supervision of the Funds' Board of Trustees and
in accordance with the investment objective and restrictions of each of the
Funds, BOK reviews, supervises, and provides general investment advice regarding
each of the Funds' investment programs. Subject to the general supervision of
the Funds' Board of Trustees and in accordance with the investment objective and
restrictions of each of the Funds, BOK makes all final decisions with respect to
portfolio securities of each of the Funds, places orders for all purchases and
sales of the portfolio securities of each of the Funds, and maintains each
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, the 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 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 Small
Cap Equity 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. (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 any Fund to
increase the net income of such Fund available for distribution as dividends.
The Funds paid BOK the following fees for investment advisory services:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
August 31, 1999 August 31, 1998 August 31, 1997
----------------------- ----------------------- -----------------------
Additional Additional Additional
Amount Amount Amount
Paid Waived Paid Waived Paid Waived
---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Fund $1,495,245 $ 0 $ 984,884 $ 0
Cash Management Fund * 1,630,192* 0 1,476,099* 0
Bond Fund 162,521 92,870 114,994 65,711
Intermediate Bond Fund 284,465 162,552 224,198 128,113
Intermediate Tax-Free Bond Fund 100,362 57,350 95,309 54,462
Short-Term Income Fund 0 117,712 0 80,882
Equity Fund 974,200 370,196 604,087 229,553
Balanced Fund 46,817 236,504 0 196,422
Growth Equity Fund 287,102 109,099 -- --
Small Cap Equity Fund -- -- -- --
Aggressive Growth Fund 188,145 81,755 225,838 85,818
</TABLE>
* Of this amount, AMR Investment Services, Inc. received $__________ for the
fiscal year ended August 31, 1999, $954,195 for the fiscal year ended August 31,
1998, and $553,537 for the fiscal year ended August 31, 1997.
Until April 30, 1999, sub-investment advisory services were provided to
the Cash Management Fund by AMR Investment Services, Inc. ("AMR") pursuant to a
Sub-Investment Advisory Agreement between BOK and AMR. For the services provided
and the expenses assumed pursuant to the Sub-Advisory Agreement, AMR received a
fee from BOK, computed daily and paid monthly, at the annual rate of not less
than fifteen one-hundredths of one
B-35
<PAGE> 160
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.
The Investment 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 and a
majority of the Trustees who are not parties to the Investment Advisory
Agreement, or interested persons (as defined in 1940 Act) of any party to the
Investment Advisory Agreement by votes cast in person at a meeting called for
such purpose.
The Investment Advisory Agreement is 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. The Investment Advisory Agreement also terminates
automatically in the event of any assignment, as defined in the 1940 Act.
The Investment Advisory Agreement provides that the Adviser 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 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 Adviser including, but not limited to, (i) a
description 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
B-36
<PAGE> 161
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 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.
The Distributor received the following amounts under the Distribution
Plan:
B-37
<PAGE> 162
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
August 31, 1999 August 31, 1998 August 31, 1997
----------------------- ---------------------- ---------------------
Additional Additional Additional
Amount Amount Amount
Paid Waived Paid Waived Paid Waived
---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Fund $ 0 $ 934,531 $ 0 $615,553
Cash Management Fund 0 1,018,870 0 922,562
Bond Fund 116,086 0 82,138 0
Intermediate Bond Fund 203,189 0 160,141 0
Intermediate Tax-Free Bond Fund 0 71,687 0 68,078
Short-Term Income Fund 0 53,506 0 36,765
Equity Fund 487,100 0 302,044 0
Balanced Fund 0 95,717 0 66,359
Growth Equity Fund -- -- -- --
Small Cap Equity Fund -- -- -- --
Aggressive Growth Fund 107,572 -- 112,919 0
</TABLE>
Substantially all of the amount received by the Distributor under the
Distribution Plan during the last fiscal year, the periods from September 1,
1998 to August 31, 1999, was spent on compensation to dealers. [CONFIRM] BISYS
retained 0.56% and spent this amount on printing and mailing of prospectuses.
The total amount spent on compensation to dealers during the last fiscal year
was [$_______]. The total amount retained by BISYS during the last fiscal year
was [$_______].
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
B-38
<PAGE> 163
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 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 Investment Advisory Agreement, 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 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 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 Adviser generally seeks 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, 1999, the Funds paid aggregate
brokerage commissions as follows:
B-39
<PAGE> 164
During the fiscal year ended August 31, 1998, the Funds paid aggregate
brokerage commissions as follows:
Equity Fund $279,771
Aggressive Growth Fund $118,045
Balanced Fund $ 56,206
Growth Equity Fund $ 61,297
During the fiscal year ended August 31, 1997, the Funds paid aggregate
brokerage commissions as follows:
Equity Fund $212,467
Aggressive Growth Fund $ 37,432
Balanced Fund $ 26,379
Allocation of transactions, including their frequency, to various
dealers is determined by the 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 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 Adviser and does not reduce the
advisory fees payable to the Adviser. Such information may be useful to the
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 Adviser, the Distributor,
or their affiliates except as may be permitted under the 1940 Act, and will not
give preference to correspondents of an 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
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 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 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 the Investment Advisory Agreement, in making
B-40
<PAGE> 165
investment recommendations for the Funds, the 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 Adviser or their respective parents or
subsidiaries or affiliates unless legally required to do so and, in dealing with
its commercial customers, the 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 (the "Administration Agreement"). The Administrator
assists in supervising all operations of each Fund (other than those performed
under the Investment 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, 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.
B-41
<PAGE> 166
BISYS received the following fees for management and administrative
services:
<TABLE>
FISCAL YEAR ENDED
<CAPTION>
August 31, 1999 August 31, 1998 August 31, 1997
--------------- --------------- ---------------
Paid Paid Paid
---- ---- ----
<S> <C> <C> <C>
U.S. Treasury Fund $ $747,624 $492,442
Cash Management Fund 815,098 738,049
Bond Fund 92,870 65,711
Intermediate Bond Fund 162,552 128,113
Intermediate Tax-Free Bond Fund 57,350 54,462
Short-Term Income Fund 42,805 29,412
Equity Fund 389,681 241,635
Balanced Fund 76,574 53,087
Growth Equity Fund 114,841 --
Small Cap Equity Fund -- --
Aggressive Growth Fund 86,058 90,335
</TABLE>
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.
BOK received the following fees for Sub-Administration services:
<TABLE>
FISCAL YEAR ENDED
<CAPTION>
August 31, 1999 August 31, 1998 August 31, 1997
--------------- --------------- ---------------
Paid Paid Paid
---- ---- ----
<S> <C> <C> <C>
U.S. Treasury Fund $ $373,811 $123,111
Cash Management Fund 407,548 184,512
Bond Fund 63,848 16,428
Intermediate Bond Fund 111,754 32,028
Intermediate Tax-Free Bond Fund 39,428 13,616
Short-Term Income Fund 29,428 7,353
Equity Fund 336,099 60,409
Balanced Fund 70,830 13,272
Growth Equity Fund 99,050 -
Small Cap Equity Fund - -
Aggressive Growth Fund 74,225 22,584
</TABLE>
B-42
<PAGE> 167
DISTRIBUTOR
- -----------
BISYS serves as distributor to each of the Funds pursuant to its
Distribution Agreement with the Funds.
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.
BISYS Fund Services Ohio, Inc. serves as transfer agent to each of the
Funds pursuant to a Transfer Agency Agreement with the Funds. 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
B-43
<PAGE> 168
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. 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.
AUDITORS
- --------
KPMG 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
- ---------------------
Each Fund is a separate series of a 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 Short-Term Income Fund, the Equity Fund, the Balanced Fund, the Growth
Equity Fund and the Small Cap Equity Fund. The Aggressive Growth Fund was
liquidated on February 17,
B-44
<PAGE> 169
1999. 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 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.
B-45
<PAGE> 170
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.
CALCULATION OF PERFORMANCE DATA
- -------------------------------
Yields based on the seven-day period ended August 31, 1999 (the "base
period") were as follows:
U.S. Treasury Fund %
Cash Management Fund %
Effective yields based on the base period were as follows:
U.S. Treasury Fund %
Cash Management Fund %
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.
Yields based on the thirty-day period ended August 31, 1999 ("30-day
base period") were as follows:
Fund With Sales Load Without Sales Load
- ---- --------------- ------------------
Bond Fund
Intermediate Bond Fund
Intermediate Tax-Free Bond Fund
Short-Term Income Fund
The 30-day yield of each Bond 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:
B-46
<PAGE> 171
30-Day Yield = 2[( a-b +1)(6)-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 return of each Bond Fund and Equity 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 the one-year period ended August
31, 1999 were as follows:
Fund With Sales Load Without Sales Load
- ---- --------------- ------------------
Bond Fund
Intermediate Bond Fund
Intermediate Tax-Free Bond Fund
Short-Term Income Fund
Equity Fund
Balanced Fund
Growth Equity Fund
Small Cap Equity Fund
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<PAGE> 172
The average annual total returns for the five-year period ended August
31, 1999 were as follows:
Fund With Sales Load Without Sales Load
- ---- --------------- ------------------
Bond Fund
Intermediate Bond Fund
Intermediate Tax-Free Bond Fund
Equity Fund
The average annual total returns for the period from commencement of
operations through August 31, 1999 were as follows:
<TABLE>
<CAPTION>
Fund Commencement of Operations With Sales Load Without Sales Load
- ---- -------------------------- --------------- ------------------
<S> <C> <C> <C>
Bond Fund September 28, 1990
Intermediate Bond Fund September 28, 1990
Intermediate Tax-Free Bond Fund May 29, 1992
Short-Term Income Fund October 19, 1994
Equity Fund September 28, 1990
Balanced Fund June 1, 1995
Growth Equity Fund(1) June 10, 1992
Small Cap Equity Fund February 17, 1999 * *
</TABLE>
* Average total return for the period.
(1) The performance data for the Growth Equity Fund includes the
performance history of its predecessor fund, a common trust fund, for the period
before the Growth Equity Fund commenced operations on November 1, 1997. The
predecessor fund was not registered under the 1940 Act and therefore was not
subject to certain investment restrictions, limitations and diversification
requirements imposed by the 1940 Act and the Code. If the predecessor fund had
been subject to such requirements under the 1940 Act and the Code its
performance may have been adversely affected.
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.
B-48
<PAGE> 173
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, 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.
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
B-49
<PAGE> 174
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.
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's
website at http://www.sec.gov or 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
B-50
<PAGE> 175
representation other than those contained in the Prospectus and Statement of
Additional Information.
As of __________ __, 1999, 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 [ %] of the U.S. Treasury Fund's Shares, [ %] of
the Cash Management Fund's Shares, [ %] and [ %] of the Bond Fund's Shares, [ %]
and [ %] of the Intermediate Bond Fund's Shares, [ %] and [ %] of the
Intermediate Tax-Free Bond Fund's Shares, [ %] and [ %] of the Short-Term Income
Fund's Shares, [ %] [ %] and of the Equity Fund's Shares, [ %] of the Balanced
Fund's Shares, [ %] and [ %] of the Growth Equity Fund's Shares, and [ %] and [
%] of the Small Cap Equity Fund's Shares. As of __________ __, 1999 Bank of
Oklahoma, N.A. and its bank affiliates possessed, on behalf of its underlying
accounts, voting and investment power with respect to [____%] of the U.S.
Treasury Fund's Shares, [ %] of the Cash Management Fund's Shares, [ %] of the
Bond Fund's Shares, [ %] of the Intermediate Bond Fund's Shares, [ %] of the
Intermediate Tax-Free Bond Fund's Shares,[ %] of the Short-Term Income Fund's
Shares, [ %] of the Equity Fund's Shares, [ %] of the Balanced Fund's Shares, [
%] of the Growth Equity Fund's Shares, and [ %] of the Small Cap 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 _________ __, 1999, 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
______, 1999:
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund
- ---------------- ------------------ -------
U.S. Treasury Fund
------------------
NABANK and Co. %
CASH
P.O. Box 2300
Tulsa, OK 74192
Cash Management Fund
--------------------
NABANK and Co. %
CASH
P.O. Box 2300
Tulsa, OK 74192
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<PAGE> 176
Bond Fund
---------
NABANK and Co. %
All Reinvest Account
P.O. Box 2300
Tulsa, OK 74192
NABANK and Co. %
Income Cash/CG
Reinvest Account
P.O. Box 2300
Tulsa, OK 74192
Intermediate Bond Fund
----------------------
NABANK and Co. %
All Reinvest Account
P.O. Box 2300
Tulsa, OK 74192
NABANK and Co. %
Income
Cash/CG/Reinvest
P.O. Box 2300
Tulsa, OK 74192
Intermediate Tax-Free Bond Fund
-------------------------------
NABANK and Co. %
Trust Accounting
P.O. Box 2300
Tulsa, OK 74192
NABANK and Co. %
Income CAS/CG
Reinvest Account
P.O. Box 2300
Tulsa, OK 74192
B-52
<PAGE> 177
Short Term Income Fund
----------------------
NABANK and Co. %
All Reinvest Account
P.O. Box 2300
Tulsa, OK 74192
NABANK and Co. %
Income
Cash/CG/Reinvest
P.O. Box 2300
Tulsa, OK 74192
Equity Fund
-----------
NABANK and Co. %
All Reinvest Account
P.O. Box 2300
Tulsa, OK 74192
NABANK and Co. %
Income Cash/CG
Reinvest Account
P.O. Box 2300
Tulsa, OK 74192
Balanced Fund
-------------
NABANK and Co. %
All Reinvest Account
P.O. Box 2300
Tulsa, OK 74192
Growth Equity Fund
------------------
NABANK and Co. %
Income
Cash/CG/Reinvest
P.O. Box 2300
Tulsa, OK 74192
NABANK and Co. %
All Reinvest
P.O. Box 2300
Tulsa, OK 74192
B-53
<PAGE> 178
FINANCIAL STATEMENTS
The Independent Auditors' Report for the American Performance Funds for
the year ended August 31, 1999 and Financial Statements for the American
Performance Funds for the five year period ended August 31, 1999, 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, 1999 and the
Semi-Annual Report dated as of February 28, 1999 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.
B-54
<PAGE> 179
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 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.
B-55
<PAGE> 180
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 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 An obligation rated AAA has the highest rating assigned by
S&P. The obligor's capacity to meet its financial commitment
on the obligation is extremely strong.
AA An obligation rated AA differs from the highest-rated
obligations only in small degree. The obligor's capacity to
meet its financial commitment on the obligation is very
strong.
A An obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher-rated categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB An obligation rated BBB exhibits adequate protection
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity
of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having
significant speculative characteristics. BB indicates the
least degree of speculation and C the highest. While such
obligations will likely have some quality and protective
characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.
BB An obligation rated BB is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or
economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the
obligation.
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
B-56
<PAGE> 181
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 IBCA (plus or
minus signs are used with a rating symbol to indicate the relative position of
the credit within the rating category):
AAA Obligations which have the highest rating assigned by Fitch
IBCA. Capacity for timely repayment principal and interest is
extremely strong relative to other obligors in the same
country.
AA Obligations for which capacity for timely repayment of
principal and interest is very strong relative to other
obligors in the same country. The risk attached to these
obligations differs only slightly from the country's highest
rated debt.
A Obligations for which capacity for timely repayment of
principal and interest is strong relative to other obligors in
the same country. However, adverse changes in business,
economic or financial conditions are more likely to affect the
capacity for timely repayment than for obligations in higher
rated categories.
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:
-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.
B-57
<PAGE> 182
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 A short-term obligation rated A-1 is rated in the highest
category by S&P. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category,
certain obligations are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.
A-2 A short-term obligation rated A-2 is somewhat more susceptible
to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rating
categories. However, the obligor's capacity to meet its
financial commitment on the obligation is satisfactory.
A-3 A short-term obligation rated A-3 exhibits adequate protection
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity
of the obligor to meet its financial commitment on the
obligation.
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.
B-58
<PAGE> 183
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 IBCA's description of its three highest short-term debt ratings:
Fl Obligations assigned this rating have the highest capacity for
timely repayment under Fitch IBCA's national rating scale for
that country, relative to other obligations in the same
country. Where issues possess a particularly strong credit
feature, a "+" is added to the assigned rating.
F2 Obligations supported by a strong capacity for timely
repayment relative to other obligors in the same country.
However, the relative degree of risk is slightly higher than
for issues classified as 'Al' and capacity for timely
repayment may be susceptible to adverse changes in business,
economic, or financial conditions.
F3 Obligations supported by an adequate capacity for timely
repayment relative to other obligors in the same country. 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.
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.
B-59
<PAGE> 184
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.
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.
B-60
<PAGE> 185
REGISTRATION STATEMENT
OF
AMERICAN PERFORMANCE FUNDS
ON
FORM N-1A
PART C. OTHER INFORMATION
Item 23. Exhibits
--------
(a) 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).
(b)(1) 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).
(b)(2) 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).
(b)(3) 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).
(c) 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).
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).
<PAGE> 186
(d)(1) 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- Effective Amendment No. 11 to the Funds' Registration
Statement (filed February 13, 1995).
(d)(2) Investment Advisory Agreement between Registrant and Bank of
Oklahoma, N.A. dated July 25, 1997 is filed herewith.
(d)(3) Sub-Investment Advisory Agreement between Bank of Oklahoma,
N.A. and AMR Investment Services, Inc. dated June 16, 1997 is
incorporated by reference to Exhibit 5(b) to Post-Effective
Amendment No. 16 to the Funds' Registration Statement (filed
December 17, 1997).
(d)(4) Amended Schedule A dated January 21, 1999 to the Investment
Advisory Agreement between Registrant and Bank of Oklahoma,
N.A. dated July 25, 1997 is filed herewith.
(e)(1) 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).
(e)(2) Amended Schedules A and B dated January 21, 1999 to
Distribution Agreement between Registrant and BISYS Fund
Services, LP (formerly, The Winsbury Company Limited
Partnership) dated October 1, 1993 are filed herewith.
(f) None.
(g)(1) 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).
(g)(2) Amended Schedule A dated January 21, 1999 to Custodian
Agreement dated September 5, 1990 between Registrant and Bank
of Oklahoma, N.A. is filed herewith.
(h)(1) Management and Administration Agreement between Registrant and
BISYS Fund Services, LP (formerly The Winsbury Company Limited
C-2
<PAGE> 187
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).
(h)(2) Administration Agreement between Registrant and BISYS Fund
Services, Ohio, Inc. dated September 15, 1999 is filed
herewith.
(h)(3) 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).
(h)(4) Transfer Agency Agreement between Registrant and BISYS Fund
Services Ohio, Inc. dated September 15, 1999 is filed
herewith.
(h)(5) 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).
(h)(6) Fund Accounting Agreement between Registrant and BISYS Fund
Services Ohio, Inc. dated September 15, 1999, is filed
herewith.
(h)(7) Sub-Administration Agreement between BISYS Fund Services,
Limited Partnership and Bank of Oklahoma, N.A. dated July 25,
1997 is incorporated by reference to Exhibit 9(f) to
Post-Effective Amendment No. 16 to the Funds' Registration
Statement (filed December 17, 1997).
(h)(8) Sub-Administration Agreement between BISYS Fund Services,
Ohio, Inc. and Bank of Oklahoma, N.A. dated September 15, 1999
is filed herewith.
(i) Opinion of Ropes & Gray is filed herewith.
(j)(2) Consent of Ropes & Gray is filed herewith.
(k) Omitted Financial Statements: None.
C-3
<PAGE> 188
(l) 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).
(m)(1) Amended and Restated Distribution and Shareholder Services
Plan dated October 1, 1993 is incorporated by reference to
Exhibit 15(a) to Post-Effective Amendment No. 7 to the Funds'
Registration Statement (filed December 16, 1993).
(m)(2) 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).
(m)(3) 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).
(m)(4) Amended Schedule A to Amended and Restated Distribution and
Shareholder Services Plan dated October 1, 1993 is filed
herewith.
(o) None.
Item 24. Persons Controlled by or under Common Control with Registrant
-------------------------------------------------------------
There are no persons controlled or under common control with the
Registrant.
C-4
<PAGE> 189
Item 25. Indemnification
---------------
Article VIII of Registrant's Agreement and Declaration of Trust, filed
or incorporated by reference as Exhibit (1) hereto, provides for the
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 26. Business and Other Connections of Investment Adviser
----------------------------------------------------
Bank of Oklahoma, N.A. ("BOK") serves as Registrant's investment
adviser.
To the knowledge of Registrant, none of the directors or officers of
BOK except those set forth below is or has 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
C-5
<PAGE> 190
BOK who are engaged in any other business, profession, vocation or
employment of a substantial nature.
<TABLE>
BANK OF OKLAHOMA, N.A.
----------------------
<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 Officer, Oil
Director Phillips Petroleum Company, 18 Phillips
Building, Bartlesville, OK 74004
Keith E. Bailey Chairman, President and Chief Executive Oil, Gas and
Director Officer, The Williams Companies, Inc., Telecommunications
P.O. Box 2400, Tulsa, OK 74102
Glenn A. Cox (Retired President and Chief Operating Oil
Director Officer, Phillips Petroleum Company),
401 SE Dewey, Suite 318, Bartlesville,
OK 74003
Dr. Robert H. Donaldson (Former President, University of Tulsa), Education
Director 6449 S. Richmond, Tulsa, OK 74136
James O. Goodwin Chief Executive Officer, The Oklahoma Publishing
Director 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 None
Director and Vice Chairman
Eugene A. Harris None
Director and Executive
Vice President
</TABLE>
C-6
<PAGE> 191
<TABLE>
<S> <C> <C>
E. Carey Joullian IV President, Mustang Fuel Corporation, Energy
Director 2000 Classen Blvd., 800E, Oklahoma
City, OK 73106-6036
George B. Kaiser President and Owner, Kaiser-Francis Oil Oil
Director and Co., P.O. Box 21468, Tulsa, OK 74121-
Chairman of the Board 1468
David R. Lopez President, Oklahoma Southwestern Bell Telecommunications
Director Telephone, 800 North Harvey, Oklahoma
City, OK 73102
Stanley A. Lybarger None
Director, President and
Chief Executive Officer
Frank A. McPherson (Retired Chairman and Chief Executive Oil
Director Officer Kerr-McGee Corporation), The
Oil Center, 2601 Northwest Expressway,
Suite 805E, Oklahoma City, OK 73112
J. Larry Nichols Chief Executive Officer and President, Energy
Director Devon Energy Corporation, 20 North
Broadway, Suite 1500, Oklahoma City,
OK 73102-8260
James W. Pielsticker President, Arrow Trucking Company, Trucking
Director 4230 South Elwood, P.O. Box 3750,
Tulsa, OK 74101
E.C. "Kip" Richards Senior Vice President of Operations, Oil
Director Sooner Pipe and Supply Corporation,
MidContinent Tower, 10th Floor, 401 S.
Boston, Tulsa, OK 74103
L. Francis Rooney, III Chairman and Chief Executive Officer, Construction
Director Manhattan Construction Company, 111
W. 5th Street, Suite 1000, Tulsa, OK
74103-4253
</TABLE>
C-7
<PAGE> 192
<TABLE>
<S> <C> <C>
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 74192.
The address of the BOK Financial Corporation is One Williams Center, Bank of
Oklahoma Tower, Tulsa, Oklahoma 74192.
Item 27. Principal Underwriter
---------------------
(a) BISYS Fund Services, Limited Partnership acts as distributor
and administrator for Registrant. BISYS Fund Services also
distributes the securities of the following investment
companies: Alpine Equity Trust, AmSouth Mutual Funds, The BB&T
Funds, The Coventry Group, ESC Strategic Funds, Inc., The
Eureka Funds, Fifth Third Funds, Governor Funds, Hirtle
Callaghan Trust, HSBC Funds Trust, HSBC Mutual Funds Trust,
The Infinity Mutual Funds, Inc., INTRUST Funds Trust, Magna
Funds, Mercantile Mutual Funds, Inc., Meyers Investment Trust,
MMA Praxis Mutual Funds, M.S.D.&T. Funds, Pacific Capital
Funds, Puget Sound Alternative Investment Series Trust, The
Republic Funds Trust, The Republic Advisor Funds Trust, Sefton
Funds, The Sessions Group, SSgA International Liquidity Fund,
Summit Investment Trust, Variable Insurance Funds, The Victory
Portfolios, The Victory Variable Insurance Funds, and Vintage
Mutual Funds, Inc.
(b) Partners of BISYS Fund Services as of the date of this Part C
as follows:
<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
3435 Stelzer Road
Columbus, Ohio 43219
WC Subsidiary Corporation Sole Limited Partner None
150 Clove Road
Little Falls, NJ 07424
</TABLE>
C-8
<PAGE> 193
Each of these corporations is a subsidiary of The BISYS Group, Inc., 150
Clove Road, Little Falls, NJ 07424.
Item 28. 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 former 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 29. Management Services
-------------------
N/A.
Item 30. 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-9
<PAGE> 194
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant has duly caused
this Amendment No. 20 to the Registration Statement to be signed on its
behalf by the undersigned, duly authorized, in the City of Washington,
District of Columbia on the 29th day of October 1999.
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. 20 to the Registration Statement has been
signed below by the following persons in the capacity and on the date
indicated.
Signature Title Date
--------- ----- ----
*/s/Walter B. Grimm Chairman, President October 29, 1999
-------------------- and Trustee
Walter B. Grimm
*/s/Jeffrey Shiverdecker Treasurer October 29, 1999
--------------------
Jeffrey Shiverdecker
*/s/Michael J. Hall Trustee October 29, 1999
--------------------
Michael J. Hall
*/s/Perry A. Wimpey Trustee October 29, 1999
--------------------
Perry A. Wimpey
*/s/I. Edgar Hendrix Trustee October 29, 1999
--------------------
I. Edgar Hendrix
* By: /s/Alan G. Priest
-----------------------
Alan G. Priest, As
Attorney-in-Fact Pursuant
to Powers of Attorney Filed Herewith.
C-10
<PAGE> 195
POWER OF ATTORNEY
-----------------
Michael J. Hall, 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: July 25, 1997 /s/ Michael J. Hall
-------------------
Michael J. Hall
<PAGE> 196
POWER OF ATTORNEY
-----------------
Perry A. Wimpey, 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: July 25, 1997 /s/ Perry A. Wimpey
-------------------
Perry A. Wimpey
<PAGE> 197
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 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, 1997 /s/ I. Edgar Hendrix
--------------------
I. Edgar Hendrix
<PAGE> 198
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 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, 1997 /s/ Walter B. Grimm
-------------------
Walter B. Grimm
<PAGE> 199
POWER OF ATTORNEY
-----------------
Joel Engle, whose signature appears below, does hereby constitute and
appoint Martin E. Lybecker, Alan G. Priest, and Alyssa Albertelli, 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: October 30, 1998 /s/ Joel Engle
--------------
Joel Engle
<PAGE> 200
POWER OF ATTORNEY
-----------------
Jeffrey Shiverdecker, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Alyssa Albertelli, 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, an 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: October 29, 1999 /s/ Jeffrey Shiverdecker
------------------------
Jeffrey Shiverdecker
<PAGE> 201
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION PAGE NO.
------- ----------- --------
(d)(2) Investment Advisory Agreement.
(d)(4) Amended Schedule A to the Investment Advisory Agreement.
(e)(2) Amended Schedules A and B to the Distribution Agreement.
(g)(2) Amended Schedule A to the Custodian Agreement.
(h)(2) Administration Agreement.
(h)(4) Transfer Agency Agreement.
(h)(6) Fund Accounting Agreement.
(h)(8) Sub-Administration Agreement.
(i) Opinion of Ropes & Gray.
(j)(2) Consent of Ropes & Gray.
(m)(4) Amended Schedule A to Amended and Restated Distribution
and Shareholder Services Plan
<PAGE> 1
Exhibit (d)(2)
<TABLE>
Form of Amended Schedule A
to the Investment Advisory Agreement between
American Performance Funds and Bank of Oklahoma, N.A.
dated July 25, 1997
<CAPTION>
Name of Fund Compensation*
- ------------ -------------
<S> <C>
American Performance U.S. Annual rate of forty one-hundredths of one percent
Treasury Fund (.40%) of American Performance U.S. Treasury Fund's
average daily net assets.
American Performance Cash Annual rate of forty one-hundredths of one percent
Management Fund (.40%) of American Performance Cash Management
Fund's average daily net assets.
American Performance Bond Annual rate of fifty-five one-hundredths of one percent
Fund (.55%) of American Performance Bond Fund's average
daily net assets.
American Performance Annual rate of fifty-five one-hundredths of one percent
Intermediate Bond Fund (.55%) of American Performance Intermediate Bond Fund's
average daily net assets.
American Performance Annual rate of fifty-five one-hundredths of one percent
Intermediate Tax-Free (.55%) of American Performance Intermediate Tax-Free
Bond Fund Bond Fund's average daily net assets.
American Performance Annual rate of fifty-five one-hundredths of one percent
Short-Term Income Fund (.55%) of American Performance Short-Term Income
Fund's average daily net assets.
American Performance Equity Annual rate of sixty-nine one-hundredths of one percent
Fund (.69%) of American Performance Equity Fund's average
daily net assets.
American Performance Annual rate of sixty-nine one-hundredths of one percent
Aggressive Growth Fund (.69%) of American Performance Aggressive Growth
Fund's average daily net assets.
</TABLE>
A-1
<PAGE> 2
<TABLE>
Form of Amended Schedule A
to the Investment Advisory Agreement between
American Performance Funds and Bank of Oklahoma, N.A.
dated July 25, 1997
<CAPTION>
Name of Fund Compensation*
- ------------ -------------
<S> <C>
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.
American Performance Annual rate of sixty-nine one-hundredths of one
Small Cap Equity Fund percent (.69%) of American Performance
Small Cap Equity Fund's average daily net assets.
[SEAL] American Performance Funds
By: /s/ D'Ray Moore
D'Ray Moore
Date: August 22, 1997
[SEAL] Bank of Oklahoma, N.A.
By: /s/ Carolyn Gardner
Carolyn Gardner
Date: July 18, 1997
</TABLE>
- -------------
* All fees are computed daily and paid monthly.
A-2
<PAGE> 1
Exhibit (d)(4)
<TABLE>
Amended Schedule A
to the Investment Advisory Agreement between
American Performance Funds and Bank of Oklahoma, N.A.
dated July 25, 1997
<CAPTION>
Name of Fund Compensation*
- ------------ -------------
<S> <C>
American Performance U.S. Annual rate of forty one-hundredths of one percent
Treasury Fund (.40%) of American Performance U.S. Treasury Fund's
average daily net assets.
American Performance Cash Annual rate of forty one-hundredths of one percent
Management Fund (.40%) of American Performance Cash Management
Fund's average daily net assets.
American Performance Bond Annual rate of fifty-five one-hundredths of one percent
Fund (.55%) of American Performance Bond Fund's average
daily net assets.
American Performance Annual rate of fifty-five one-hundredths of one percent
Intermediate Bond Fund (.55%) of American Performance Intermediate Bond
Fund's average daily net assets.
American Performance Annual rate of fifty-five one-hundredths of one percent
Intermediate Tax-Free (.55%) of American Performance Intermediate Tax-Free
Bond Fund Bond Fund's average daily net assets.
American Performance Annual rate of fifty-five one-hundredths of one percent
Short-Term Income Fund (.55%) of American Performance Short-Term Income
Fund's average daily net assets.
American Performance Equity Annual rate of sixty-nine one-hundredths of one percent
Fund (.69%) of American Performance Equity Fund's average
daily net assets.
American Performance Annual rate of sixty-nine one-hundredths of one percent
Aggressive Growth Fund (.69%) of American Performance Aggressive Growth
Fund's average daily net assets.
</TABLE>
A-1
<PAGE> 2
<TABLE>
Amended Schedule A (continued)
to the Investment Advisory Agreement between
American Performance Funds and Bank of Oklahoma, N.A.
dated July 25, 1997
<CAPTION>
Name of Fund Compensation*
- ------------ -------------
<S> <C>
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.
American Performance Annual rate of sixty-nine one-hundredths of one
Small Cap Equity Fund percent (.69%) of American Performance
Small Cap Equity Fund's average daily net assets.
[SEAL] American Performance Funds
By:/s/ Jeffrey C. Cusick
Jeffrey C. Cusick
Date: January 21, 1999
[SEAL] Bank of Oklahoma, N.A.
By: /s/ James L. Huntington
James L. Huntington
Date: January 21, 1999
</TABLE>
- -------------
* All fees are computed daily and paid monthly.
<PAGE> 1
Exhibit (e)(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 Small Cap Equity Fund
American Performance Funds
By: /s/ Jeffrey C. Cusick
Jeffrey C. Cusick
Title: VP
Date: January 21, 1999
BISYS Fund Services Limited Partnership
By: BISYS Fund Services, Inc.
General Partner
By: /s/ Walter B. Grimm
Walter B. Grimm
Title: SVP
Date: January 21, 1999
<PAGE> 2
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 Small Cap Equity Fund
American Performance Funds
By: /s/ Jeffrey C. Cusick
Jeffrey C. Cusick
Title: VP
Date: January 21, 1999
BISYS Fund Services Limited Partnership
By: BISYS Fund Services, Inc.
General Partner
By: /s/ Walter B. Grimm
Walter B. Grimm
Title: SVP
Date: January 21, 1999
<PAGE> 1
Exhibit (g)(2)
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
American Performance Small Cap Equity Fund
American Performance Funds
By: /s/ Jeffrey C. Cusick
Jeffrey C. Cusick
Date: January 21, 1999
Bank of Oklahoma, N.A.
By: /s/ James L. Huntzinger
James L. Huntzinger
Date: January 21, 1999
<PAGE> 1
ADMINISTRATION AGREEMENT
------------------------
THIS AGREEMENT is made as of this 15th day of September, 1999, by and
between AMERICAN PERFORMANCE FUNDS, a Massachusetts business trust (the
"Trust"), and BISYS FUND SERVICES OHIO, INC., an Ohio corporation (the
"Administrator").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Trust Act of 1940, as amended (the "1940 Act"),
consisting of several series of shares of beneficial interest ("Shares"); and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such series of the Trust as the Trust and the Administrator may agree on
("Portfolios") and as listed on Schedule A attached hereto and made a part of
this Agreement, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. RETENTION OF THE ADMINISTRATOR. The Trust hereby retains the
Administrator to act as the administrator of the Portfolios and to furnish the
Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 2. ADMINISTRATIVE SERVICES. The Administrator shall perform or
supervise the performance by others of administrative services in connection
with the operations of the Portfolios, and, on behalf of the Trust, will
investigate, assist in the selection of and conduct relations with custodians,
depositories, accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Portfolios' operations. The Administrator
shall provide the Trustees of the Trust with such reports regarding investment
performance as they may reasonably request but shall have no responsibility for
supervising the performance by any investment adviser or sub-adviser of its
responsibilities.
The Administrator shall provide the Trust with regulatory reporting,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Trustees' meetings) for handling the
affairs of the Portfolios and such other services as the Administrator shall,
from time to time, determine to be necessary to perform its obligations under
<PAGE> 2
this Agreement. In addition, at the request of the Board of Trustees, the
Administrator shall make reports to the Trust's Trustees concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Trust expenses and control all
disbursements for the Trust, and as appropriate, compute the
Trust's yields, total return, expense ratios, portfolio
turnover rate and, if required, Portfolio average
dollar-weighted maturity;
(b) assist Trust counsel with the preparation of prospectuses,
statements of additional information, registration statements
and proxy materials;
(c) prepare such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with Federal and state securities
law) as may be necessary or desirable to register the Trust's
Shares with state securities authorities, monitor the sale of
Trust Shares for compliance with state securities laws, and
file with the appropriate state securities authorities the
registration statements and reports for the Trust and the
Trust's Shares and all amendments thereto, as may be necessary
or convenient to register and keep effective the Trust and the
Trust's Shares with state securities authorities to enable the
Trust to make a continuous offering of its Shares;
(d) develop and prepare, with the assistance of the Trust's
investment adviser and independent auditors, communications to
Shareholders, including the semi-annual and annual reports to
Shareholders;
(e) supervise the Trust's transfer agent with respect to the
payment of dividends and other distributions to Shareholders;
(f) calculate performance data of the Portfolios for dissemination
to information services covering the investment Trust
industry;
(g) coordinate and supervise the preparation and filing of the
Trust's tax returns;
(h) examine and review the operations and performance of the
various organizations providing services to the Trust or any
Portfolio of the Trust, including, without limitation, the
Trust's investment adviser, distributor, custodian, fund
accountant, transfer agent, outside legal counsel and
independent public accountants, and at the request of the
Board of Trustees, report to the Board on the performance of
organizations;
(i) assist with the design, development, and operation of the
Portfolios, including new
2
<PAGE> 3
classes, investment objectives, policies and structure;
(j) provide individuals reasonably acceptable to the Trust's Board
of Trustees to serve as officers of the Trust, who will be
responsible for the management of certain of the Trust's
affairs as determined by the Trust's Board of Trustees;
(k) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Trust
in accordance with the requirements of Rules 17g-1 and
17d-1(7) under the 1940 Act as such bonds and policies are
approved by the Trust's Board of Trustees;
(l) monitor and advise the Trust and its Portfolios on their
regulated investment company status under the Internal Revenue
Code of 1986, as amended;
(m) perform all administrative services and functions of the Trust
and each Portfolio to the extent administrative services and
functions are not provided to the Trust or such Portfolio
pursuant to the Trust's or such Portfolio's investment
advisory agreement, distribution agreement, custodian
agreement, transfer agent agreement and fund accounting
agreement;
(n) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Trust and the Administrator shall determine desirable;
(o) prepare and file with the SEC the semi-annual report for the
Trust on Form N-SAR and all required notices pursuant to Rule
24f-2;
(p) assist in monitoring and developing compliance procedures for
each Portfolio which will include, among other matters,
procedures to monitor compliance with each Portfolio's
investment objective, policies, restrictions, tax matters and
applicable laws and regulations;
(q) provide legal support to the Trust with respect to regulatory
matters including: monitoring regulatory and legislative
developments which may affect the Trust and assisting in the
strategic response to such developments, assisting the Trust
in routine regulatory examinations or investigations of the
Trust, and working closely with outside counsel to the Trust
in response to any litigation or non-routine regulatory
matters; and
(r) assist the Trust in preparing for Board meetings by (i)
coordinating board book production and distribution, (ii)
assisting in the preparation of Board agendas, (iii) attending
Board meetings, (iv) preparing the BISYS section of Board
materials, (v) preparing Board meeting materials, including
but not limited to, materials relating to annual contract
approvals and 12b-1 plan approvals, as agreed upon by the
parties,
3
<PAGE> 4
and (vi) such other Board meeting functions that are agreed
upon by the parties.
The Administrator shall perform such other services for the Trust that
are mutually agreed upon in writing by the parties from time to time.
ARTICLE 3. ALLOCATION OF CHARGES AND EXPENSES.
(A) THE ADMINISTRATOR. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers and Trustees of the Trust who are affiliated
persons of the Administrator or any affiliated corporation of the Administrator;
provided, however, that unless otherwise specifically provided, the
Administrator shall not be obligated to pay the compensation of any employee of
the Trust retained by the Trustees of the Trust to perform services on behalf of
the Trust.
(B) THE TRUST. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust not otherwise allocated herein, including, without
limitation, organization costs, taxes, expenses for legal and auditing services,
the expenses of preparing (including typesetting), printing and mailing reports,
prospectuses, statements of additional information, proxy solicitation material
and notices to existing Shareholders, all expenses incurred in connection with
issuing and redeeming Shares, the costs of custodial services, the cost of
initial and ongoing registration of the Shares under Federal and state
securities laws, fees and out-of-pocket expenses of Trustees who are not
affiliated persons of the Administrator or the Investment Adviser to the Trust
or any affiliated corporation of the Administrator or the Investment Adviser,
insurance, interest, brokerage costs, litigation and other extraordinary or
nonrecurring expenses, and all fees and charges of investment advisers to the
Trust.
ARTICLE 4. COMPENSATION OF THE ADMINISTRATOR.
(A) ADMINISTRATION FEE. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Trust shall pay to the Administrator compensation at an annual
rate specified in Schedule A attached hereto. Such compensation shall be
calculated and accrued daily, and paid to the Administrator monthly. The Trust
shall also reimburse the Administrator for its out-of-pocket expenses,
including, but not limited to, the travel and lodging expenses incurred by
officers and employees of the Administrator that are also Trustees of the Trust
in connection with attendance at Board meetings.
If this Agreement becomes effective subsequent to the first
day of a month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
4
<PAGE> 5
(B) SURVIVAL OF COMPENSATION RIGHTS. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby. (As used in this Article 5, the term "Administrator" shall include
directors, officers, employees and other agents of the Administrator as well as
the Administrator itself.)
The Administrator may apply to the Trust at any time for instructions
and may consult counsel for the Trust or its own counsel and with accountants
and other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. The Administrator will not be held to have
notice of any change of authority of any officers, employees or agents of the
Trust until receipt of written notice thereof from the Trust.
ARTICLE 6. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that directors, officers, employees
and Shareholders of the Trust are or may be or become interested in the
Administrator, as officers, employees or otherwise and that partners, officers
and employees of the Administrator and its counsel are or may be or become
similarly interested in the Trust, and that the Administrator may be or become
interested in the Trust as a Shareholder or otherwise.
ARTICLE 7. DURATION OF THIS AGREEMENT. The Term of this Agreement shall
be as specified in Schedule A hereto.
ARTICLE 8. ASSIGNMENT. This Agreement shall not be assignable by either
party without the written consent of the other party; provided, however, that
the Administrator may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder. The
Administrator shall not, however, be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that the Administrator shall be responsible, to the extent provided in Article 5
hereof, for all acts of such subcontractor as if such acts were its own. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
5
<PAGE> 6
ARTICLE 9. AMENDMENTS. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting called
for the purpose of voting on such approval.
ARTICLE 10. CERTAIN RECORDS. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Trust has
agreed to indemnify the Administrator against such liability.
ARTICLE 11. DEFINITIONS OF CERTAIN TERMS. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 12. NOTICE. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at 3435 Stelzer Road, Columbus, Ohio 43219 or at the last address
furnished in writing by the other party to the party giving notice pursuant to
this Article.
ARTICLE 13. GOVERNING LAW AND MATTERS RELATING TO THE TRUST AS A
MASSACHUSETTS BUSINESS TRUST. This Agreement shall be governed by the laws of
The Commonwealth of Massachusetts. The names "American Performance Funds" and
"Trustees of 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 an Agreement and 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 "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 series of
shares of the Trust must look solely to the
6
<PAGE> 7
assets of the Trust belonging to such series for the enforcement of any claims
against the Trust.
ARTICLE 14. MULTIPLE ORIGINALS. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
AMERICAN PERFORMANCE FUNDS
By: /s/ Jeffrey C. Cusick
---------------------------------
Title: Vice President
------------------------------
BISYS FUND SERVICES OHIO, INC.
By: /s/ Walter B. Grimm
---------------------------------
Title: President
------------------------------
7
<PAGE> 8
SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF SEPTEMBER 15, 1999
BETWEEN AMERICAN PERFORMANCE FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
PORTFOLIOS: This Agreement shall apply to all Portfolios of the Trust
either now or hereafter created. The current portfolios of the
Trust are set forth below:
Equity Fund
Small Cap Equity Fund
Balanced Fund
Growth Equity Fund
Bond Fund
Intermediate Bond Fund
Intermediate Tax-Free Bond Fund
Short-Term Income Fund
U.S. Treasury Fund
Cash Management Fund
(collectively, the "Portfolios").
FEES: Pursuant to Article 4, in consideration of services rendered
and expenses assumed pursuant to this Agreement, the Trust
will pay the Administrator on the first business day of each
month, or at such time(s) as the Administrator shall request
and the parties hereto shall agree, a fee computed daily at
the annual rate of:
Twenty one-hundredths of one percent (.20%) of each
Portfolio's average daily net assets.
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 purposes of determining the fees payable to the
Administrator, the value of the net assets of a particular
Fund shall be computed in the manner described in the Fund's
Declaration of Trust or in the Prospectus or Statement of
Additional
A-1
<PAGE> 9
Information respecting that Fund as from time to time is 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.
The parties hereby confirm that the fees payable hereunder
shall be applied to each Portfolio as a whole, and not to
separate classes of shares within the Portfolios.
The fee payable by the Trust hereunder shall be allocated to
each Portfolio based upon its pro rata share of the total fee
payable hereunder. Such fee as is attributable to each
Portfolio shall be a separate (and not joint or joint and
several) obligation of each such Portfolio. The Administrator
may agree, from time to time, to waive any fees payable under
this Agreement. Such waiver shall be at the Administrator's
sole discretion.
TERM: Pursuant to Article 7, the term of this Agreement shall
commence on September 15, 1999, and shall remain in effect
until May 1, 2002 ("Initial Term"). Thereafter, unless
otherwise terminated as provided herein, this Agreement shall
be renewed automatically for successive one-year periods
("Rollover Periods"). This Agreement may be terminated without
penalty (i) by provision of a notice of nonrenewal in the
manner set forth below, (ii) by mutual agreement of the
parties or (iii) for "cause," as defined below, upon the
provision of 60 days advance written notice by the party
alleging cause. Written notice of nonrenewal must be provided
at least 60 days prior to the end of the Initial Term or any
Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean (a) a
material breach of this Agreement that has not been remedied
for thirty (30) days following written notice of such breach
from the non-breaching party; (b) a final, unappealable
judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of
criminal or unethical behavior in the conduct of its business;
or (c) financial difficulties on the part of the party to be
terminated which are 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
is 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.
Notwithstanding the foregoing, after such termination for so
long as the Administrator, with the written consent of the
Trust, in fact continues to perform any one or more of the
services contemplated by this Agreement or any schedule or
exhibit hereto, the provisions of this Agreement, including
without limitation the provisions dealing with
indemnification, shall continue in full force and effect.
Compensation due the Administrator and unpaid by the Trust
upon such termination shall be immediately due and payable
upon and notwithstanding such termination. The Administrator
shall be entitled to collect from the Trust, in addition to
the
A-2
<PAGE> 10
compensation described in this Schedule A, the amount of all
of the Administrator's cash disbursements for services in
connection with the Administrator's activities in effecting
such termination, including without limitation, the delivery
to the Trust and/or its designees of the Trust's property,
records, instruments and documents, or any copies thereof.
Subsequent to such termination, for a reasonable fee, the
Administrator will provide the Trust with reasonable access to
any Trust documents or records remaining in its possession.
If, for any reason other than nonrenewal, mutual agreement of
the parties or "cause," as defined above, the Administrator is
replaced as administrator, or if a third party is added to
perform all or a part of the services provided by the
Administrator under this Agreement (excluding any
sub-administrator appointed by the Administrator as provided
in Article 8 hereof), then the Trust shall make a one-time
cash payment, as liquidated damages, to the Administrator
equal to the balance due the Administrator under this
Agreement for the lesser of (A) the next six months of the
Initial Term or (B) the remainder of such Initial Term,
assuming for purposes of calculation of the payment that (i)
such balance shall be based upon the average amount of the
Trust's assets for the twelve months prior to the date the
Administrator is replaced or a third party is added and (ii)
such payment shall be based upon the actual fee being charged,
which may or may not be lower than the contractual fee amount;
provided, however, that, in the event the Administrator is
replaced or a third party is added to perform services at any
time after May 1, 2001, the Trust shall not be required to
make a liquidated damages payment.
In the event the Trust is merged into another legal entity in
part or in whole pursuant to any form of business
reorganization or is liquidated in part or in whole prior to
the expiration of the then-current term of this Agreement, the
parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those
instances in which the Administrator is not retained to
provide administration services. Under such circumstances, the
one-time cash payment referenced above shall be due and
payable on the day prior to the first day during which assets
are transferred pursuant to the plan of reorganization or
liquidation.
The parties further acknowledge and agree that, in the event
the Administrator ceases to be retained, as set forth above,
(i) a determination of actual damages incurred by the
Administrator would be extremely difficult, and (ii) the
liquidated damages provision contained herein is intended to
adequately compensate the Administrator for damages incurred
and is not intended to constitute any form of penalty.
A-3
<PAGE> 1
TRANSFER AGENCY AGREEMENT
-------------------------
AGREEMENT made this 15th day of September, 1999, between AMERICAN
PERFORMANCE FUNDS, a Massachusetts business (the "Trust"), and BISYS FUND
SERVICES OHIO, INC., an Ohio corporation ("BISYS").
WHEREAS, the Trust desires that BISYS perform certain services for each
series of the Trust (individually referred to herein as a "Fund" and
collectively as the "Funds"); and
WHEREAS, BISYS 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.
BISYS shall perform for the Trust the transfer agent services
set forth in Schedule A hereto. BISYS also agrees to perform for the Trust such
special services incidental to the performance of the services enumerated herein
as agreed to by the parties from time to time. BISYS shall perform such
additional services as are provided on an amendment to Schedule A hereof, in
consideration of such fees as the parties hereto may agree.
BISYS may, in its discretion, appoint in writing other parties
qualified to perform transfer agency services reasonably acceptable to the Trust
(individually, a "Sub-transfer Agent") to carry out some or all of its
responsibilities under this Agreement with respect to a Fund; provided, however,
that the Sub-transfer Agent shall be the agent of BISYS and not the agent of the
Trust or such Fund, and that BISYS shall be fully responsible for the acts of
such Sub-transfer Agent and shall not be relieved of any of its responsibilities
hereunder by the appointment of such Sub-transfer Agent.
2. FEES.
The Trust shall pay BISYS for the services to be provided by
BISYS under this Agreement in accordance with, and in the manner set forth in,
Schedule B hereto. Fees for any additional services to be provided by BISYS
pursuant to an amendment to Schedule A hereto shall be subject to mutual
agreement at the time such amendment to Schedule A is proposed.
<PAGE> 2
3. REIMBURSEMENT OF EXPENSES.
In addition to paying BISYS the fees described in Section 2
hereof, the Trust agrees to reimburse BISYS for BISYS' out-of-pocket expenses in
providing services hereunder, including without limitation, the following:
(a) All freight and other delivery and bonding charges
incurred by BISYS in delivering materials to and from the
Trust and in delivering all materials to shareholders;
(b) All direct telephone, telephone transmission and telecopy
or other electronic transmission expenses incurred by
BISYS in communication with the Trust, the Trust's
investment adviser or custodian, dealers, shareholders or
others as required for BISYS to perform the services to be
provided hereunder;
(c) Costs of postage, couriers, stock computer paper,
statements, labels, envelopes, checks, reports, letters,
tax forms, proxies, notices or other form of printed
material which shall be required by BISYS for the
performance of the services to be provided hereunder;
(d) The cost of microfilm or microfiche of records or other
materials; and
(e) Any expenses BISYS shall incur at the written direction of
an officer of the Trust thereunto duly authorized.
4. EFFECTIVE DATE.
This Agreement shall become effective as of September 15, 1999
(the "Effective Date").
5. TERM.
This Agreement shall continue in effect with respect to a Fund,
unless earlier terminated by either party hereto as provided hereunder, until
May 1, 2002 (the "Initial Term"). Thereafter, unless otherwise terminated as
provided herein, this Agreement shall be renewed automatically for successive
one-year periods ("Rollover Periods"). This Agreement may be terminated without
penalty (i) by provision of a notice of nonrenewal in the manner set forth
below, (ii) by mutual agreement of the parties or (iii) for "cause," as defined
below, upon the provision of 60 days advance written notice by the party
alleging cause. Written notice of nonrenewal must be provided at least 60 days
prior to the end of the Initial Term or any Rollover Period, as the case may be.
2
<PAGE> 3
For purposes of this Agreement, "cause" shall mean (a) a
material breach of this Agreement that has not been cured within thirty (30)
days following written notice of such breach from the non-breaching party; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; or (c) financial difficulties on the
part of the party to be terminated which are 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 is 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.
After such termination, for so long as BISYS, with the written
consent of the Trust, in fact continues to perform any one or more of the
services contemplated by this Agreement or any Schedule or exhibit hereto, the
provisions of this Agreement, including without limitation the provisions
dealing with indemnification, shall continue in full force and effect. Fees and
out-of-pocket expenses incurred by BISYS but unpaid by the Trust upon such
termination shall be immediately due and payable upon and notwithstanding such
termination. BISYS shall be entitled to collect from the Trust, in addition to
the fees and disbursements provided by Sections 2 and 3 hereof, the amount of
all of BISYS' cash disbursements in connection with BISYS' activities in
effecting such termination, including without limitation, the delivery to the
Trust and/or its distributor or investment adviser and/or other parties, of the
Trust's property, records, instruments and documents, or any copies thereof. To
the extent that BISYS may retain in its possession copies of any Trust documents
or records subsequent to such termination which copies had not been requested by
or on behalf of the Trust in connection with the termination process described
above, BISYS, for a reasonable fee, will provide the Trust with reasonable
access to such copies.
If, for any reason other than nonrenewal, mutual agreement of
the parties or "cause," as defined above, BISYS is replaced as transfer agent,
or if a third party is added to perform all or a part of the services provided
by BISYS under this Agreement (excluding any Sub-transfer Agent appointed by
BISYS as provided in Section 1 hereof), then the Trust shall make a one-time
cash payment, as liquidated damages, to BISYS equal to the balance due BISYS
under this Agreement for the lesser of (A) the next six months of the Initial
Term or (B) the remainder of such Initial Term, assuming for purposes of
calculation of the payment that (i) such balance shall be based upon the average
amount of the Trust's assets for the twelve months prior to the date BISYS is
replaced or a third party is added and (ii) such payment shall be based upon the
actual fee being charged, which may or may not be lower than the contractual fee
amount; provided, however, that, in the event BISYS is replaced or a third party
is added to perform services at any time after May 1, 2001, the Trust shall not
be required to make a liquidated damages payment.
3
<PAGE> 4
In the event the Trust is merged into another legal entity in
part or in whole pursuant to any form of business reorganization or is
liquidated in part or in whole prior to the expiration of the then-current term
of this Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which BISYS
is not retained to provide transfer agency services. Under such circumstances,
the one-time cash payment referenced above shall be due and payable on the day
prior to the first day during which assets are transferred pursuant to the plan
of reorganization or liquidation.
The parties further acknowledge and agree that, in the event
BISYS ceases to be retained, as set forth above, (i) a determination of actual
damages incurred by BISYS would be extremely difficult, and (ii) the liquidated
damages provision contained herein is intended to adequately compensate BISYS
for damages incurred and is not intended to constitute any form of penalty.
6. UNCONTROLLABLE EVENTS.
BISYS 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.
7. LEGAL ADVICE.
BISYS shall notify the Trust at any time BISYS believes that it
is in need of the advice of counsel (other than counsel in the regular employ of
BISYS or any affiliated companies) with regard to BISYS' responsibilities and
duties pursuant to this Agreement; and after so notifying the Trust, BISYS, at
its discretion, shall be entitled to seek, receive and act upon advice of legal
counsel of its choosing, such advice to be at the expense of the Trust or Funds
unless relating to a matter involving BISYS' willful misfeasance, bad faith,
gross negligence or reckless disregard with respect to BISYS' responsibilities
and duties hereunder and BISYS shall in no event be liable to the Trust or any
Fund or any shareholder or beneficial owner of the Trust for any action
reasonably taken pursuant to such advice.
8. INSTRUCTIONS.
Whenever BISYS is requested or authorized to take action
hereunder pursuant to instructions from a shareholder, or a properly authorized
agent of a shareholder ("shareholder's agent"), concerning an account in a Fund,
BISYS shall be entitled to rely upon any certificate, letter or other instrument
or communication, believed by BISYS to be genuine and to have been properly
made, signed or authorized by an officer or other authorized agent of the Trust
or by the shareholder or shareholder's agent, as the case may be, and shall be
entitled to receive as conclusive proof of any fact or matter required to be
ascertained by it hereunder a certificate signed by an officer of the Trust or
any other person authorized by the Trust's Board of Trustees or by the
shareholder or shareholder's agent, as the case may be.
4
<PAGE> 5
As to the services to be provided hereunder, BISYS may rely
conclusively upon the terms of the Prospectuses and Statement of Additional
Information of the Trust relating to the Funds to the extent that such services
are described therein unless BISYS receives written instructions to the contrary
in a timely manner from the Trust.
9. STANDARD OF CARE.
BISYS shall use its best efforts to ensure the accuracy of all services
performed under this Agreement, but shall not be liable to the Trust for any
action taken or omitted by BISYS in the absence of bad faith, willful
misfeasance, negligence or from reckless disregard by it of its obligations and
duties.
10. RECORD RETENTION AND CONFIDENTIALITY.
BISYS shall keep and maintain on behalf of the Trust all books
and records which the Trust or BISYS is, or may be, required to keep and
maintain pursuant to any applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act"), relating to the maintenance of books and
records in connection with the services to be provided hereunder. BISYS further
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 or by the
Securities and Exchange Commission (the "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, or requested
by a shareholder or shareholder's agent with respect to information concerning
an account as to which such shareholder has either a legal or beneficial
interest or when requested by the Trust, the shareholder, or shareholder's
agent, or the dealer of record as to such account.
11. REPORTS.
BISYS will furnish to the Trust and to its properly-authorized
auditors, investment advisers, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and others designated by the Trust in writing,
such reports at such times as are prescribed in Schedule C attached hereto, or
as subsequently agreed upon by the parties pursuant to an amendment to Schedule
C. The Trust agrees to examine each such report or copy promptly and will report
or cause to be reported any errors or discrepancies therein not later than three
business days from the receipt thereof. In the event that errors or
discrepancies, except such errors and discrepancies as may not reasonably be
expected to be discovered by the recipient within three days after conducting a
diligent examination, are not so reported within the aforesaid period of time, a
report will for all purposes be accepted by and be binding upon the Trust and
any other recipient, and BISYS shall have no liability for errors or
discrepancies therein and shall have no further responsibility with respect to
such report except to perform reasonable corrections of such errors and
discrepancies within a reasonable time after requested to do so by the Trust.
5
<PAGE> 6
12. RIGHTS OF OWNERSHIP.
All computer programs and procedures developed to perform
services required to be provided by BISYS under this Agreement are the property
of BISYS. 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 Trust in appropriate form as soon as
practicable after termination of this Agreement for any reason.
13. RETURN OF RECORDS.
BISYS may at its option at any time, and shall promptly upon the
Trust's demand, turn over to the Trust and cease to retain BISYS' files, records
and documents created and maintained by BISYS pursuant to this Agreement which
are no longer needed by BISYS in the performance of its services or for its
legal protection. If not so turned over to the Trust, such documents and records
will be retained by BISYS 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
Trust unless the Trust authorizes in writing the destruction of such records and
documents.
14. BANK ACCOUNTS.
The Trust and the Funds shall establish and maintain such bank
accounts with such bank or banks as are selected by the Trust, as are necessary
in order that BISYS may perform the services required to be performed hereunder.
To the extent that the performance of such services shall require BISYS directly
to disburse amounts for payment of dividends, redemption proceeds or other
purposes, the Trust and Funds shall provide such bank or banks with all
instructions and authorizations necessary for BISYS to effect such
disbursements.
15. REPRESENTATIONS OF THE TRUST.
The Trust certifies to BISYS that: (a) as of the close of
business on the Effective Date, each Fund which is in existence as of the
Effective Date has authorized unlimited shares, and (b) by virtue of its
Declaration of Trust, shares of each Fund which are redeemed by the Trust may be
sold by the Trust from its treasury, and (c) this Agreement has been duly
authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
16. REPRESENTATIONS OF BISYS.
6
<PAGE> 7
BISYS represents and warrants that: (a) BISYS has been in, and
shall continue to be in, substantial compliance with all provisions of law,
including Section 17A(c) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), required in connection with the performance of its duties under
this Agreement; and (b) the various procedures and systems which BISYS has
implemented with regard to safekeeping from loss or damage attributable to fire,
theft or any other cause of the blank checks, records, and other data of the
Trust and BISYS' records, data, equipment, facilities and other property used in
the performance of its obligations hereunder are adequate and that it will make
such changes therein from time to time as are required for the secure
performance of its obligations hereunder.
17. INSURANCE.
BISYS shall notify the Trust should its insurance coverage with
respect to professional liability or errors and omissions coverage be canceled
or reduced. Such notification shall include the date of change and the reasons
therefor. BISYS shall notify the Trust of any material claims against it with
respect to services performed under this Agreement, whether or not they may be
covered by insurance, and shall notify the Trust from time to time as may be
appropriate of the total outstanding claims made by BISYS under its insurance
coverage.
18. INFORMATION TO BE FURNISHED BY THE TRUST AND FUNDS.
The Trust has furnished to BISYS the following:
(a) Copies of the Declaration of Trust of the Trust and of any
amendments thereto, certified by the proper official of
the state in which such Declaration has been filed.
(b) Copies of the following documents:
1. The Trust's Bylaws and any amendments thereto;
2. Certified copies of resolutions of the Board of
Trustees covering the following matters:
A. Approval of this Agreement and authorization
of a specified officer of the Trust to
execute and deliver this Agreement and
authorization for specified officers of the
Trust to instruct BISYS hereunder; and
B. Authorization of BISYS to act as Transfer
Agent for the Trust on behalf of the Funds.
(c) A list of all officers of the Trust, together with
specimen signatures of those officers, who are authorized
to instruct BISYS in all matters.
7
<PAGE> 8
(d) Two copies of the following (if such documents are
employed by the Trust):
1. Prospectuses and Statement of Additional
Information;
2. Distribution Agreement; and
3. All other forms commonly used by the Trust or its
Distributor with regard to their relationships and
transactions with shareholders of the Funds.
(e) A certificate as to shares of beneficial interest of the
Trust authorized, issued, and outstanding as of the
Effective Date of BISYS' appointment as Transfer Agent (or
as of the date on which BISYS' services are commenced,
whichever is the later date) and as to receipt of full
consideration by the Trust for all shares outstanding,
such statement to be certified by the Treasurer of the
Trust.
19. INFORMATION FURNISHED BY BISYS.
BISYS has furnished to the Trust the following:
(a) BISYS' Articles of Incorporation.
(b) BISYS' Bylaws and any amendments thereto.
(c) Certified copies of actions of BISYS covering the
following matters:
1. Approval of this Agreement, and authorization of a
specified officer of BISYS to execute and deliver
this Agreement;
2. Authorization of BISYS to act as Transfer Agent for
the Trust.
(d) A copy of the most recent independent accountants' report
relating to internal accounting control systems as filed
with the Commission pursuant to Rule 17Ad-13 under the
Exchange Act.
20. AMENDMENTS TO DOCUMENTS.
The Trust shall furnish BISYS written copies of any amendments
to, or changes in, any of the items referred to in Section 18 hereof forthwith
upon such amendments or changes becoming effective. In addition, the Trust
agrees that no amendments will be made to the Prospectuses or Statement of
Additional Information of the Trust which might have the effect of changing the
procedures employed by BISYS in providing the services agreed to hereunder or
which amendment might affect the duties of BISYS hereunder unless the Trust
first obtains BISYS' approval of such amendments or changes.
8
<PAGE> 9
21. RELIANCE ON AMENDMENTS.
BISYS may rely on any amendments to or changes in any of the
documents and other items to be provided by the Trust pursuant to Sections 18
and 20 of this Agreement and the Trust hereby indemnifies and holds harmless
BISYS from and against any and all claims, demands, actions, suits, judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character which may result from actions or omissions on the
part of BISYS in reasonable reliance upon such amendments and/or changes.
Although BISYS is authorized to rely on the above-mentioned amendments to and
changes in the documents and other items to be provided pursuant to Sections 18
and 20 hereof, BISYS shall be under no duty to comply with or take any action as
a result of any of such amendments or changes unless the Trust first obtains
BISYS' written consent to and approval of such amendments or changes.
22. COMPLIANCE WITH LAW.
Except for the obligations of BISYS set forth in Section 10
hereof, the Trust assumes full responsibility for the preparation, contents, and
distribution of each prospectus of the Trust as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), the 1940 Act, and any other laws, rules and regulations of governmental
authorities having jurisdiction. BISYS shall have no obligation to take
cognizance of any laws relating to the sale of the Trust's shares. The Trust
represents and warrants that no shares of the Trust will be offered to the
public until the Trust's registration statement under the 1933 Act and the 1940
Act has been declared or becomes effective.
23. NOTICES.
Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice at the following address: 3435 Stelzer Road, Columbus, Ohio 43219,
or at such other address as such party may from time to time specify in writing
to the other party pursuant to this Section.
24. HEADINGS.
Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
25. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable by either of the parties hereto except by the specific written
consent of the other party. This Section 25 shall not limit or in any way affect
BISYS' right to appoint a Sub-transfer Agent pursuant to Section 1
9
<PAGE> 10
hereof. This Agreement shall be binding upon, and shall inure to the benefit of,
the parties hereto and their respective successors and permitted assigns.
26. GOVERNING LAW AND MATTERS RELATING TO THE TRUST AS A MASSACHUSETTS
BUSINESS TRUST.
This Agreement shall be governed by the laws of The Commonwealth
of Massachusetts. The names "American Performance Funds" and "Trustees of
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 an Agreement and 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 "American Performance Funds" entered into in the name
or on behalf thereof by any of the Trustees, representatives or agents are made
not individually, buy 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 series of shares of
the Trust must look solely to the assets of the Trust belonging to such series
for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
AMERICAN PERFORMANCE FUNDS
By: /s/ Jeffrey C. Cusick
------------------------------------
Title: Vice President
---------------------------------
BISYS FUND SERVICES OHIO, INC.
By: /s/ Walter B. Grimm
------------------------------------
Title: President
---------------------------------
10
<PAGE> 11
SCHEDULE A
----------
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
AMERICAN PERFORMANCE FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
TRANSFER AGENCY SERVICES
------------------------
1. SHAREHOLDER TRANSACTIONS
a. Process shareholder purchase and redemption orders.
b. Set up account information, including address, dividend option,
taxpayer identification numbers and wire instructions.
c. Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.
d. Issue periodic statements for shareholders.
e. Process transfers and exchanges.
f. Process dividend payments, including the purchase of new
shares, through dividend reimbursement.
2. SHAREHOLDER INFORMATION SERVICES
a. Make information available to shareholder servicing unit and
other remote access units regarding trade date, share price,
current holdings, yields, and dividend information.
b. Produce detailed history of transactions through duplicate or
special order statements upon request.
c. Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to current
shareholders.
3. COMPLIANCE REPORTING
A-1
<PAGE> 12
a. Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers and the States in
which the Fund is registered.
b. Prepare and distribute appropriate Internal Revenue Service
forms for corresponding Fund and shareholder income and capital
gains.
c. Issue tax withholding reports to the Internal Revenue Service.
4. DEALER/LOAD PROCESSING (IF APPLICABLE)
a. Provide reports for tracking rights of accumulation and
purchases made under a Letter of Intent.
b. Account for separation of shareholder investments from
transaction sale charges for purchase of Fund shares.
c. Calculate fees due under 12b-1 plans for distribution and
marketing expenses.
d. Track sales and commission statistics by dealer and provide for
payment of commissions on direct shareholder purchases in a load
Fund.
5. SHAREHOLDER ACCOUNT MAINTENANCE
a. Maintain all shareholder records for each account in the Trust.
b. Issue customer statements on scheduled cycle, providing
duplicate second and third party copies if required.
c. Record shareholder account information changes.
d. Maintain account documentation files for each shareholder.
A-2
<PAGE> 13
SCHEDULE B
----------
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
AMERICAN PERFORMANCE FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
TRANSFER AGENT FEES
-------------------
ANNUAL PER FUND FEE:
- --------------------
BISYS shall be entitled to receive an annual fee of two one-hundredths of one
percent (.02%) of each Fund's average daily net assets.
ANNUAL PER ACCOUNT FEES:
- ------------------------
In addition to the annual per fund fee set forth above, BISYS shall be entitled
to receive the following annual per account fees:
IRA Accounts: $15.00 per account
<TABLE>
<CAPTION>
RETAIL LOADED RETAIL NO-LOAD INSTITUTIONAL
------------- -------------- -------------
<S> <C> <C> <C>
Daily Dividend: $25.00 per account $21.00 per account $17.00 per account
Annual Dividend: $23.00 per account $19.00 per account $15.00 per account
</TABLE>
ADDITIONAL SERVICES:
- --------------------
Additional services such as IRA processing, development of interface
capabilities, servicing of 403(b) and 408(c) accounts, management of cash sweeps
between DDAs and mutual fund accounts and coordination of the printing and
distribution of prospectuses, annual reports and semi-annual reports are subject
to additional fees which will be quoted upon request. Programming costs or
database management fees for special reports or specialized processing will be
quoted upon request.
*MULTIPLE CLASSES OF SHARES:
- ----------------------------
The annual per fund fee set forth above is based upon one class of shares.
Additional classes or classes of shares which have different net asset values or
pay different daily dividends will be treated as separate classes, and the fee
schedule above, will be charged for each separate class.
B-1
<PAGE> 14
OUT-OF-POCKET EXPENSES:
- -----------------------
In addition to the fees set forth above, BISYS shall be entitled to be
reimbursed for all out-of-pocket expenses including, but not limited to, the
expenses set forth in Section 3 of the Transfer Agency Agreement to which this
Schedule B is attached.
B-2
<PAGE> 15
SCHEDULE C
----------
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
AMERICAN PERFORMANCE FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
REPORTS
-------
1. Daily Shareholder Activity Journal
2. Daily Fund Activity Summary Report
a. Beginning Balance
b. Dealer Transactions
c. Shareholder Transactions
d. Reinvested Dividends
e. Exchanges
f. Adjustments
g. Ending Balance
3. Daily Wire and Check Registers
4. Monthly Dealer Processing Reports
5. Monthly Dividend Reports
6. Sales Data Reports for Blue Sky Registration
7. Annual report by independent public accountants concerning BISYS'
shareholder system and internal accounting control systems to be filed
with the Securities and Exchange Commission pursuant to Rule 17Ad-13 of
the Securities Exchange Act of 1934, as amended.
C-1
<PAGE> 1
FUND ACCOUNTING AGREEMENT
-------------------------
AGREEMENT made this 15th day of September, 1999, between AMERICAN
PERFORMANCE FUNDS, a Massachusetts business trust (the "Trust"), and BISYS FUND
SERVICES OHIO, INC., an Ohio corporation ("BISYS").
WHEREAS, the Trust desires that BISYS perform certain fund accounting
services for each series of the Trust (individually referred to herein as a
"Fund" and collectively as the "Funds"); and
WHEREAS, BISYS 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 FUND ACCOUNTANT.
(a) MAINTENANCE OF BOOKS AND RECORDS. BISYS will keep and
maintain the following books and records of each Fund
pursuant to Rule 31a-1 under the Investment Company
Act of 1940 (the "Rule"):
(i) Journals containing an itemized daily record
in detail of all purchases and sales of
securities, all receipts and disbursements
of cash and all other debits and credits, as
required by subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income
and expense accounts, including interest
accrued and interest received, as required
by subsection (b)(2)(i) of the Rule;
(iii) Separate ledger accounts required by
subsection (b)(2)(ii) and (iii) of the Rule;
and
(iv) A monthly trial balance of all ledger
accounts (except shareholder accounts) as
required by subsection (b)(8) of the Rule.
(b) PERFORMANCE OF DAILY ACCOUNTING SERVICES. In addition
to the maintenance of the books and records specified
above, BISYS shall perform the following accounting
services daily for each Fund:
(i) Calculate the net asset value per share
utilizing prices obtained from the sources
described in subsection 1(b)(ii) below;
<PAGE> 2
(ii) Obtain security prices from independent
pricing services, or if such quotes are
unavailable, then obtain such prices from
each Fund's investment adviser or its
designee, as approved by the Trust's Board
of Trustees;
(iii) Verify and reconcile with the Funds'
custodian all daily trade activity;
(iv) Compute, as appropriate, each Fund's net
income and capital gains, dividend payables,
dividend factors, 7-day yields, 7-day
effective yields, 30-day yields, and
weighted average portfolio maturity;
(v) Review daily the net asset value calculation
and dividend factor (if any) for each Fund
prior to release to shareholders, check and
confirm the net asset values and dividend
factors for reasonableness and deviations,
and distribute net asset values and yields
to NASDAQ;
(vi) Report to the Trust the daily market pricing
of securities in any money market Funds,
with the comparison to the amortized cost
basis;
(vii) Determine unrealized appreciation and
depreciation on securities held in variable
net asset value Funds;
(viii) Amortize premiums and accrete discounts on
securities purchased at a price other than
face value, if requested by the Trust;
(ix) Update fund accounting system to reflect
rate changes, as received from a Fund's
investment adviser, on variable interest
rate instruments;
(x) Post Fund transactions to appropriate
categories;
(xi) Accrue expenses of each Fund according to
instructions received from the Trust's
Administrator;
(xii) Determine the outstanding receivables and
payables for all (1) security trades, (2)
Fund share transactions and (3) income and
expense accounts;
2
<PAGE> 3
(xiii) Provide accounting reports in connection
with the Trust's regular annual audit and
other audits and examinations by regulatory
agencies; and
(xiv) Provide such periodic reports as the parties
shall agree upon, as set forth in a separate
schedule.
(c) SPECIAL REPORTS AND SERVICES.
(i) BISYS may provide additional special reports
upon the request of the Trust or a Fund's
investment adviser, which may result in an
additional charge, the amount of which shall
be agreed upon between the parties.
(ii) BISYS may provide such other similar
services with respect to a Fund as may be
reasonably requested by the Trust, which may
result in an additional charge, the amount
of which shall be agreed upon between the
parties.
(d) ADDITIONAL ACCOUNTING SERVICES. BISYS shall also
perform the following additional accounting services
for each Fund:
(i) Provide monthly a download (and hard copy
thereof) of the financial statements
described below, upon request of the Trust.
The download will include the following
items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information for the
following:
(A) federal and state income tax
returns and federal excise tax
returns;
(B) the Trust's semi-annual reports
with the Securities and Exchange
Commission ("SEC") on Form N-SAR;
(C) the Trust's annual, semi-annual and
quarterly (if any) shareholder
reports;
3
<PAGE> 4
(D) registration statements on Form
N-1A and other filings relating to
the registration of shares;
(E) the Administrator's monitoring of
the Trust's status as a regulated
investment company under Subchapter
M of the Internal Revenue Code, as
amended;
(F) annual audit by the Trust's
auditors;
(G) examinations performed by the SEC;
and
(H) quarterly reports to Trustees
regarding manually priced
securities.
2. SUBCONTRACTING.
BISYS may, at its expense, subcontract with any entity or
person concerning the provision of the services contemplated hereunder;
provided, however, that BISYS shall not be relieved of any of its obligations
under this Agreement by the appointment of such subcontractor and provided
further, that BISYS shall be responsible, to the extent provided in Section 7
hereof, for all acts of such subcontractor as if such acts were its own.
3. COMPENSATION.
The Trust shall pay BISYS for the services to be provided by
BISYS under this Agreement in accordance with, and in the manner set forth in,
Schedule A hereto, as such Schedule may be amended from time to time.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying BISYS the fees described in Section 3
hereof, the Trust agrees to reimburse BISYS for its out-of-pocket expenses in
providing services hereunder, including without limitation the following:
(a) All freight and other delivery and bonding charges
incurred by BISYS in delivering materials to and
from the Trust;
(b) All direct telephone, telephone transmission and
telecopy or other electronic transmission expenses
incurred by BISYS in communication with the Trust,
the Trust's investment advisor or custodian, dealers
or others as required for BISYS to perform the
services to be provided hereunder;
4
<PAGE> 5
(c) The cost of obtaining security market quotes
pursuant to Section l(b)(ii) above;
(d) The cost of microfilm or microfiche of records or
other materials;
(e) Any expenses BISYS shall incur at the written
direction of an officer of the Trust thereunto duly
authorized; and
(f) Any additional expenses reasonably incurred by BISYS
in the performance of its duties and obligations
under this Agreement.
5. EFFECTIVE DATE.
This Agreement shall become effective with respect to a Fund
as of September 15, 1999 (or, if a particular Fund is not in existence on that
date, on the date an amendment to Schedule A to this Agreement relating to the
Fund is executed) (the "Effective Date").
6. TERM.
This Agreement shall continue in effect with respect to a
Fund, unless earlier terminated by either party hereto as provided hereunder,
until May 1, 2002 (the "Initial Term"). Thereafter, unless otherwise terminated
as provided herein, this Agreement shall be renewed automatically for successive
one-year periods ("Rollover Periods"). This Agreement may be terminated without
penalty (i) by provision of a notice of nonrenewal in the manner set forth
below, (ii) by mutual agreement of the parties or (iii) for "cause," as defined
below, upon the provision of 60 days advance written notice by the party
alleging cause. Written notice of nonrenewal must be provided at least 60 days
prior to the end of the Initial Term or any Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean (a) a
material breach if the Agreement that has not been cured within thirty (30) days
following written notice of such breach from the non-breaching party; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; or (c) financial difficulties on the
part of the party to be terminated which are 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 is 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.
After such termination for so long as BISYS, with the written
consent of the Trust, in fact continues to perform any one or more of the
services contemplated by this Agreement or any schedule or exhibit hereto, the
provisions of this Agreement, including without
5
<PAGE> 6
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Compensation due BISYS and unpaid by the Trust upon such
termination shall be immediately due and payable upon and notwithstanding such
termination. BISYS shall be entitled to collect from the Trust, in addition to
the compensation described under Section 3 hereof, the amount of all of BISYS's
cash disbursements for services in connection with BISYS's activities in
effecting such termination, including without limitation, the delivery to the
Trust and/or its designees of the Trust's property, records, instruments and
documents, or any copies thereof. Subsequent to such termination, for a
reasonable fee, BISYS will provide the Trust with reasonable access to any Trust
documents or records remaining in its possession.
If, for any reason other than nonrenewal, mutual agreement of
the parties or "cause," as defined above, BISYS is replaced as fund accountant,
or if a third party is added to perform all or a part of the services provided
by BISYS under this Agreement (excluding any sub-accountant appointed by BISYS
as provided in Section 2 hereof), then the Trust shall make a one-time cash
payment, as liquidated damages, to BISYS equal to the balance due BISYS under
this Agreement for the lesser of (A) the next six months of the Initial Term or
(B) the remainder of such Initial Term, assuming for purposes of calculation of
the payment that (i) such balance shall be based upon the average amount of the
Trust's assets for the twelve months prior to the date BISYS is replaced or a
third party is added and (ii) such payment shall be based upon the actual fee
being charged, which may or may not be lower than the contractual fee amount;
provided, however, that, in the event BISYS is replaced or a third party is
added to perform services at any time after May 1, 2001, the Trust shall not be
required to make a liquidated damages payment.
In the event the Trust is merged into another legal entity in
part or in whole pursuant to any form of business reorganization or is
liquidated in part or in whole prior to the expiration of the then-current term
of this Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which BISYS
is not retained to provide fund accounting services. Under such circumstances,
the one-time cash payment referenced above shall be due and payable on the day
prior to the first day during which assets are transferred pursuant to the plan
of reorganization or liquidation.
The parties further acknowledge and agree that, in the event
BISYS ceases to be retained, as set forth above, (i) a determination of actual
damages incurred by BISYS would be extremely difficult, and (ii) the liquidated
damages provision contained herein is intended to adequately compensate BISYS
for damages incurred and is not intended to constitute any form of penalty.
7. STANDARD OF CARE.
BISYS shall use its best efforts to insure the accuracy of all
services performed under this Agreement, but shall not be liable to the Trust
for any action taken or omitted by
6
<PAGE> 7
BISYS in the absence of bad faith, willful misfeasance, negligence or from
reckless disregard by it of its obligations and duties.
8. RECORD RETENTION AND CONFIDENTIALITY.
BISYS shall keep and maintain on behalf of the Trust all books
and records which the Trust and BISYS is, or may be, required to keep and
maintain pursuant to any applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act"), relating to the maintenance of books and
records in connection with the services to be provided hereunder. BISYS further
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 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.
9. UNCONTROLLABLE EVENTS.
BISYS 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.
10. REPORTS.
BISYS will furnish to the Trust and to its properly authorized
auditors, investment advisers, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and others designated by the Trust in writing,
such reports and at such times as are prescribed pursuant to the terms and the
conditions of this Agreement to be provided or completed by BISYS, or as
subsequently agreed upon by the parties pursuant to an amendment hereto. The
Trust agrees to examine each such report or copy promptly and will report or
cause to be reported any errors or discrepancies therein no later than three
business days from the receipt thereof. In the event that errors or
discrepancies, except such errors and discrepancies as may not reasonably be
expected to be discovered by the recipient within three days after conducting a
diligent examination, are not so reported within the aforesaid period of time, a
report will for all purposes be accepted by and binding upon the Trust and any
other recipient, and BISYS shall have no liability for errors or discrepancies
therein and shall have no further responsibility with respect to such report
except to perform reasonable corrections of such errors and discrepancies within
a reasonable time after requested to do so by the Trust.
11. RIGHTS OF OWNERSHIP.
All computer programs and procedures developed to perform
services required to be provided by BISYS under this Agreement are the property
of BISYS. All records and other
7
<PAGE> 8
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 Trust in
appropriate form as soon as practicable after termination of this Agreement for
any reason.
12. RETURN OF RECORDS.
BISYS may at its option at any time, and shall promptly upon
the Trust's demand, turn over to the Trust and cease to retain BISYS' files,
records and documents created and maintained by BISYS pursuant to this Agreement
which are no longer needed by BISYS in the performance of its services or for
its legal protection. If not so turned over to the Trust, such documents and
records will be retained by BISYS 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 Trust unless the Trust authorizes in writing the destruction of such
records and documents.
13. REPRESENTATIONS OF THE TRUST.
The Trust certifies to BISYS that: (1) as of the close of
business on the Effective Date, each Fund that is in existence as of the
Effective Date has authorized unlimited shares, and (2) this Agreement has been
duly authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
14. REPRESENTATIONS OF BISYS.
BISYS represents and warrants that: (1) the various procedures
and systems which BISYS has implemented with regard to safeguarding from loss or
damage attributable to fire, theft, or any other cause the records, and other
data of the Trust and BISYS' records, data, equipment facilities and other
property used in the performance of its obligations hereunder are adequate and
that it will make such changes therein from time to time as are required for the
secure performance of its obligations hereunder, and (2) this Agreement has been
duly authorized by BISYS and, when executed and delivered by BISYS, will
constitute a legal, valid and binding obligation of BISYS, enforceable against
BISYS in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties.
15. INSURANCE.
BISYS shall notify the Trust should any of its insurance
coverage be canceled or reduced. Such notification shall include the date of
change and the reasons therefor. BISYS shall notify the Trust of any material
claims against it with respect to services performed under this Agreement,
whether or not they may be covered by insurance, and shall notify the Trust from
8
<PAGE> 9
time to time as may be appropriate of the total outstanding claims made by BISYS
under its insurance coverage.
16. INFORMATION TO BE FURNISHED BY THE TRUST AND FUNDS.
The Trust has furnished to BISYS the following:
(a) Copies of the Declaration of Trust of the Trust and
of any amendments thereto, certified by the proper
official of the state in which such Declaration has
been filed.
(b) Copies of the following documents:
(i) The Trust's Bylaws and any amendments
thereto; and
(ii) Certified copies of resolutions of the Board
of Trustees covering the approval of this
Agreement, authorization of a specified
officer of the Trust to execute and deliver
this Agreement and authorization for
specified officers of the Trust to instruct
BISYS thereunder.
(c) A list of all the officers of the Trust, together
with specimen signatures of those officers who are
authorized to instruct BISYS in all matters.
(d) Two copies of the Prospectuses and Statements of
Additional Information for each Fund.
17. INFORMATION FURNISHED BY BISYS.
(a) BISYS has furnished to the Trust the following:
(i) BISYS' Articles of Incorporation; and
(ii) BISYS' Bylaws and any amendments thereto.
(b) BISYS shall, upon request, furnish certified copies
of corporate actions covering the following matters:
(i) Approval of this Agreement, and
authorization of a specified officer of
BISYS to execute and deliver this
Agreement; and
(ii) Authorization of BISYS to act as fund
accountant for the Trust and to provide
accounting services for the Trust.
9
<PAGE> 10
18. AMENDMENTS TO DOCUMENTS.
The Trust shall furnish BISYS written copies of any amendments
to, or changes in, any of the items referred to in Section 16 hereof forthwith
upon such amendments or changes becoming effective. In addition, the Trust
agrees that no amendments will be made to the Prospectuses or Statements of
Additional Information of the Trust which might have the effect of changing the
procedures employed by BISYS in providing the services agreed to hereunder or
which amendment might affect the duties of BISYS hereunder unless the Trust
first obtains BISYS' approval of such amendments or changes.
19. COMPLIANCE WITH LAW.
Except for the obligations of BISYS set forth in Section 8
hereof, the Trust assumes full responsibility for the preparation, contents and
distribution of each prospectus of the Trust as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. BISYS shall have no obligation to
take cognizance of any laws relating to the sale of the Trust's shares. The
Trust represents and warrants that no shares of the Trust will be offered to the
public until the Trust's registration statement under the Securities Act and the
1940 Act has been declared or becomes effective.
20. NOTICES.
Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice, at the following address: 3435 Stelzer Road, Columbus, Ohio 43219,
or at such other address as such party may from time to time specify in writing
to the other party pursuant to this Section.
21. HEADINGS.
Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
22. 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.
10
<PAGE> 11
23. GOVERNING LAW AND MATTERS RELATING TO THE TRUST AS A MASSACHUSETTS
BUSINESS TRUST.
This Agreement shall be governed by the laws of The
Commonwealth of Massachusetts. The names "American Performance Funds" and
"Trustees of 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 an Agreement and 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 "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 series of
shares of the Trust must look solely to the assets of the Trust belonging to
such series for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
AMERICAN PERFORMANCE FUNDS
By: /s/ Jeffrey C. Cusick
----------------------------------
Title: Vice President
-------------------------------
11
<PAGE> 12
BISYS FUND SERVICES OHIO, INC.
By: /s/ Walter B. Grimm
----------------------------------
Title: President
-------------------------------
12
<PAGE> 13
SCHEDULE A
----------
TO THE FUND ACCOUNTING AGREEMENT
DATED AS OF SEPTEMBER 15, 1999
BETWEEN
AMERICAN PERFORMANCE FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
FEES
----
ANNUAL PER FUND FEE:
- --------------------
Fund Accountant shall be entitled to receive a fee from each Fund in accordance
with the following schedule:
Three one-hundredths of one percent (.03%) of average
net assets up to $150 million.
Two one-hundredths of one percent (.02%) of average
net assets in excess of $150 million up to $250
million.
One and one-half one-hundredths of one percent
(.015%) of average net assets in excess of $250
million.
OUT-OF-POCKET EXPENSES:
- -----------------------
BISYS shall be entitled to be reimbursed for all out-of-pocket expenses,
including, but not limited to, the expenses set forth in Section 4 of the Fund
Accounting Agreement to which this Schedule A is attached.
AMERICAN PERFORMANCE FUNDS BISYS FUND SERVICES OHIO, INC.
By: /s/ Jeffrey C. Cusick By: /s/ Walter B. Grimm
----------------------------- ---------------------------------
Title: Vice President Title: President
-------------------------- ------------------------------
A-1
<PAGE> 1
Exhibit (h)(8)
SUB-ADMINISTRATION AGREEMENT
----------------------------
AGREEMENT made this 15th day of September, 1999, between BISYS FUND
SERVICES OHIO, INC. (the "Administrator"), an Ohio corporation 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 an Administration
Agreement, dated September 15, 1999 (the "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, the fund
accountant under its Fund Accounting Agreement, and
the investment adviser for the Funds under its
Investment Advisory 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. 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 the Sub-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 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 any person reasonably believed by the Sub-Administrator to
be 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. The Sub-Administrator agrees
to indemnify and hold harmless the 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 bad faith, willful misfeasance, negligence
or from reckless disregard by it of its obligations and duties, with respect to
-3-
<PAGE> 4
performance of services under this Agreement, and further provided that prior to
confessing any claim against it which may be the subject of this
indemnification, the Administrator shall give the Sub-Administrator written
notice of and reasonable opportunity to defend against said claim in its own
name or in the name of the 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 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
-4-
<PAGE> 5
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.
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 Ohio, Inc.
By: /s/ Walter B. Grimm
---------------------------
Title: SVP
-------------------------
Date: September 15, 1999
Bank of Oklahoma, N.A.
By: /s/ Douglas K. Scott
---------------------------
Title: V.P. & Product Manager
-------------------------
Date: September 15, 1999
-5-
<PAGE> 6
SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND BANK OF OKLAHOMA, N.A.
DATED SEPTEMBER 15, 1999
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 Balanced Fund
American Performance Growth Equity Fund
American Performance Small Cap Equity Fund
BISYS Fund Services Ohio, Inc.
By: /s/ Walter B. Grimm
---------------------------
Title: SVP
-------------------------
Date: September 15, 1999
Bank of Oklahoma, N.A.
By: /s/ Douglas K. Scott
---------------------------
Title: V.P. & Product Manager
-------------------------
Date: September 15, 1999
<PAGE> 1
EXHIBIT (i)
Opinion of Ropes & Gray
<PAGE> 2
Ropes & Gray
One Franklin Square
1301 K Street, N.W., Suite 800 East
Washington, D.C. 20005
WRITER'S DIRECT DIAL NUMBER: (202) 626-3925
October 29, 1999
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 provide unaudited financial
statements for the American Performance Growth Equity Fund and to modify an
investment policy with respect to the American Performance Intermediate Bond
Fund.
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 each Fund of the Trust described in
said Registration Statement (each a "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.
<PAGE> 3
American Performance Funds
October 29, 1999
Page 2
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
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 (j)(2)
Consent of Ropes & Gray
<PAGE> 2
CONSENT OF COUNSEL
We hereby consent to the use of our name and the references to our firm
under the caption "Legal Counsel" included in or made a part of Post-Effective
Amendment No. 20 to the Registration Statement of the American Performance
Funds on Form N-1A under the Securities Act of 1933, as amended.
/s/ Ropes & Gray
ROPES & GRAY
Washington, D.C.
October 29, 1999
<PAGE> 1
Exhibit m(4)
<TABLE>
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
<CAPTION>
Name of Fund Compensation*
- ------------ -------------
<S> <C>
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.
</TABLE>
<PAGE> 2
<TABLE>
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
<CAPTION>
Name of Fund Compensation*
- ------------ -------------
<S> <C>
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.
</TABLE>
-2-
<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
American Performance Annual rate of twenty-five one-hundredths
Small Cap Equity Fund of one percent (.25%) of American
Performance Small Cap Equity Fund's
average daily net assets.
[SEAL] AMERICAN PERFORMANCE FUNDS
By: /s/ Jeffrey C. Cusick
------------------------------
Jeffrey C. Cusick
Title: VP
---------------------------
Date: January 21, 1999
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: BISYS Fund Services, Inc.,
General Partner
By: /s/ Walter B. Grimm
------------------------------
Walter B. Grimm
Title: SVP
---------------------------
Date: January 21, 1999
- --------------
* All fees are computed daily and paid monthly.
-3-
