<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Universal Capital Investment Trust
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
UNIVERSAL CAPITAL INVESTMENT TRUST
P.O. Box 1591
Milwaukee, WI 53201-1591
(800) 537-3446
July 18, 2000
Dear Fellow Shareholder:
Due to upcoming changes in the general partnership structure of Universal
Capital Growth Fund's investment adviser, the Fund's investment advisory
agreement may be deemed to terminate by technical action of law. Therefore, we
must ask you, the shareholders of the Fund, to approve a new investment advisory
agreement with our current investment adviser. THE NEW AGREEMENT WILL NOT RESULT
IN ANY CHANGES IN THE PORTFOLIO MANAGEMENT OF THE FUND.
Since it is necessary to call a shareholder meeting to consider the new
investment advisory agreement, we are also taking this opportunity to allow you,
the shareholders, to elect the Trustees of the Universal Capital Investment
Trust and to ratify the selection of Ernst & Young as the independent auditors
of the Trust.
THE BOARD OF TRUSTEES UNANIMOUSLY APPROVED EACH PROPOSAL AND RECOMMENDS
THEM FOR YOUR APPROVAL.
We urge you to sign and return your proxy card in the enclosed postage-paid
envelope to ensure a quorum at the meeting. Thank you for your attention to this
matter and for your continued investment in the Fund.
Sincerely,
Andrew J. Goodwin, III
President
<PAGE> 3
UNIVERSAL CAPITAL INVESTMENT TRUST
100 SOUTH WACKER DRIVE, SUITE 2100
CHICAGO, ILLINOIS 60606
(312) 782-1515
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 17, 2000
To the shareholders of Universal Capital Investment Trust:
Please take notice that a special meeting of the shareholders of Universal
Capital Growth Fund (the "Fund"), a series of Universal Capital Investment Trust
(the "Trust"), will be held at Suite 2100, 100 South Wacker Drive, Chicago,
Illinois, on August 17, 2000, at 8:00 am, Chicago time, to:
PROPOSAL 1: Elect a board of trustees;
PROPOSAL 2: Consider the approval (Proposal 2-A) and continuation
(Proposal 2-B) of an investment advisory agreement with
Optimum Investment Advisers, L.P., on the same terms and
conditions as the Trust's current investment advisory
agreement;
PROPOSAL 3: Ratify the selection of Ernst & Young LLP as independent
auditors for the current fiscal year; and
PROPOSAL 4: Transact any other business as may properly come before the
meeting.
The appointed proxies will vote on any other business as may properly come
before the meeting or any adjournments thereof. Shareholders of record at the
close of business on July 14, 2000 are entitled to vote at the meeting and any
adjournments thereof.
For the Board of Trustees,
Keith F. Pinsoneault,
Vice President, Secretary and Treasurer
July 18, 2000
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR
EACH OF THE FOREGOING ITEMS.
IMPORTANT - WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN
IT IN THE ENCLOSED ADDRESSED ENVELOPE WHICH REQUIRES NO POSTAGE AND IS INTENDED
FOR YOUR CONVENIENCE.
2
<PAGE> 4
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Board") of Universal Capital Investment
Trust (the "Trust") for use at a special meeting of the Trust's shareholders, to
be held at Suite 2100, 100 South Wacker Drive, Chicago, Illinois, on August 17,
2000, at 8:00 am, Chicago time, and at any adjournments thereof (the "Meeting").
The Trust's shareholders of record at the close of business on July 14,
2000 are entitled to participate in the Meeting and to cast one vote for each
share held. The Trust had 763,388 shares of beneficial interest outstanding on
the record date, all of which were shares of the Universal Capital Growth Fund
(the "Fund"), the only series of the Trust. This proxy statement is first being
mailed to the shareholders on or about July 18, 2000. ANY SHAREHOLDER WHO
DESIRES A COPY OF THE PREVIOUSLY MAILED ANNUAL REPORT (OR THE MORE RECENT
SEMI-ANNUAL REPORT) MAY OBTAIN IT, WITHOUT CHARGE, FROM THE OFFICE OF THE TRUST,
100 SOUTH WACKER DRIVE, SUITE 2100, CHICAGO, ILLINOIS, 60606, OR BY CALLING
(312) 782-1515.
INTRODUCTION
The current investment adviser of the Fund, Graver, Bokhof, Goodwin &
Sullivan (the "Adviser"), is organized as a limited partnership under the laws
of the State of Illinois. Recently, Stephen F. Graver and James F. Sullivan, two
of the general partners in the parent company of the Adviser, Optimum
Investments Group, Ltd. (the "Parent"), announced their intention to relinquish
their partnership interests (each of which approximate 27% of the Parent), which
interests will be transferred back to the Parent (the "Transactions"). Mr.
Graver will transfer his stock in the Parent on July 31, 2000. In return, he
will be released by the Parent and its remaining shareholders from certain
agreements, primarily non-competition agreements. Mr. Sullivan has not yet
solidified the timing or terms of his separation from the Adviser; however, it
is anticipated that on or before December 15, 2000, Mr. Sullivan will transfer
his stock in the Parent in return for the investment advisory assets and
business affiliated with the Parent and located in Michigan. In conjunction with
the Transactions, the Adviser will change its name to "Optimum Investment
Advisers, L.P." Following the Transactions and the name change, the Adviser will
continue investment management of the Fund under the same terms and conditions
contained in the current investment advisory agreement between the Trust and the
Adviser (the "Current Agreement").
Each of the Transactions may constitute an "assignment" of the Current
Agreement, as that term is defined by the Investment Company Act of 1940, as
amended (the "1940 Act"). If either of the Transactions are in fact an
assignment, the Current Agreement would be automatically terminated by action of
law. Since the 1940 Act requires a contract between an investment company such
as the Trust and its investment manager, it is necessary for the Adviser to
enter into a new investment advisory agreement with the Trust upon the
conclusion of the first Transaction (Mr. Graver's separation). It is this
agreement (the "New Agreement") between the Adviser and the Trust that is being
proposed for shareholders' approval. Although the New Advisory Agreement will be
executed and become effective immediately upon approval by shareholders, it may
be deemed to terminate upon the occurrence of the second transaction (Mr.
Sullivan's separation) unless its continuation after that transaction is also
approved by shareholders. Therefore, you will be asked to approve both the New
Advisory Agreement (Proposal 2-A) and its continuation after the second
transaction (Proposal 2-B).
1
<PAGE> 5
The Adviser has assured the Board of Trustees that it intends to comply
with Section 15(f) of the 1940 Act. Section 15(f) provides a non-exclusive safe
harbor for an investment adviser or any of its affiliated persons to receive any
amount or benefit in connection with a change in control of the investment
adviser so long as two conditions are met. First, for a period of three years
after the transaction, at least 75% of the board members of the investment
company must not be interested persons of such investment adviser. The
composition of the Board of Trustees, currently and as proposed, would be in
compliance with this provision of Section 15(f). Second, an "unfair burden" must
not be imposed upon the investment company as a result of the transaction or any
express or implied terms, conditions or understandings applicable thereto. The
Adviser is not aware of any express or implied term, condition, arrangement or
understanding that would impose an "unfair burden" on the Trust as a result of
the Transactions. The Adviser has agreed that it and its affiliates will take no
action that would have the effect of imposing an "unfair burden" on the Trust as
a result of the Transactions. The Adviser has undertaken to pay the costs of
preparing and distributing proxy materials to and of holding the meeting of the
Trust's shareholders.
THERE ARE NO SUBSTANTIVE DIFFERENCES BETWEEN THE CURRENT AGREEMENT AND THE
NEW AGREEMENT. THIS SHAREHOLDER VOTE IS NECESSARY TO COMPLY WITH CERTAIN LEGAL
REQUIREMENTS. IF THE NEW AGREEMENT AND ITS CONTINUATION ARE APPROVED, THERE WILL
BE NO CHANGES IN THE PORTFOLIO MANAGEMENT OF THE TRUST.
PROPOSAL 1: ELECTION OF THE TRUSTEES
The persons named on the accompanying proxy card intend, in the absence of
contrary instructions, to vote all proxies in favor of the election of the
nominees for Trustee listed below to serve until the next meeting held for the
purpose of electing trustees and until their successors are duly elected and
qualified. All nominees have consented to stand for reelection and to serve if
elected. If any such nominee should be unable to serve, an event not now
anticipated, the proxies will be voted for such person, if any, as shall be
determined by the persons acting under the proxies in their discretion.
INFORMATION CONCERNING NOMINEES
The following table sets forth certain information concerning the nominees
for Trustee. Each of the nominees is currently a Trustee and, except for Mr.
Korajczyk, was elected by a shareholder vote on August 13, 1997. Mr. Korajczyk
was appointed by the Board to fill a vacancy on May 14, 1998.
2
<PAGE> 6
<TABLE>
<CAPTION>
PRESENT OFFICE WITH THE TRUST IF ANY; SHARES
PRINCIPAL OCCUPATION OR YEAR FIRST BENEFICIALLY
EMPLOYMENT AND DIRECTORSHIPS IN BECAME A OWNED AS OF
NAME (DATE OF BIRTH) PUBLICLY HELD COMPANIES TRUSTEE JULY 14, 2000
------------------------------------ ------------------------------------------------------ -------- -------------
<S> <C> <C> <C>
Andrew J. Goodwin, III* (10/22/43) President of Optimum Investment Group Ltd. since 1999, 1997 None
Officer of the Adviser since 1990
Robert A. Korajczyk (07/26/54) Professor of Finance, Northwestern University since 1998 53
1983; Principal, Chicago Partners since 1995.
Robert F. Seebeck Retired; formerly, Managing Director of Russell 1997 1,741
(05/19/26) Reynolds Associates, Inc., August, 1974 through
December, 1996.
Alan L. Zable Consultant since January 1, 1995; president and sole 1991 3,184
(10/28/36) shareholder of CAZCO, Inc. (hair salon business); prior
thereto, Senior Vice President and Treasurer, Midwest
Stock Exchange, Incorporated.
</TABLE>
---------------
* Mr. Goodwin is an "interested person" of the Trust as defined in the 1940 Act.
The Board has an audit and nominating committee that is comprised of
Messrs. Korajczyk, Seebeck and Zable. The audit and nominating committee makes
recommendations regarding the selection of the Trust's independent auditors and
meets with representatives of the independent auditors to determine the scope
and review the results of each audit; the committee also selects and nominates
candidates for independent trustees. The Trust pays Independent Trustees an
attendance fee of $500 for each meeting attended. Trustees or officers of the
Trust who are affiliates of the Investment Adviser receive no compensation from
the Trust. The Board met 5 times during its 1999 fiscal year. Except for Mr.
Korajczyk, each Trustee attended 75% or more of the respective meetings of the
Board, and the audit and nominating committee held one meeting during its 1999
fiscal year; Mr. Korajczyk attended 3 of 5 Board meetings and all meetings of
the audit and nominating committee.
The table below shows, for each Trustee entitled to receive compensation
from the Trust, the aggregate compensation earned during the Trust's 1999 fiscal
year.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
NAME OF TRUSTEE FROM THE TRUST
--------------- ------------------
<S> <C>
Robert A. Korajczyk $1,500
Robert F. Seebeck $2,500
Alan L. Zable $2,500
</TABLE>
3
<PAGE> 7
PROPOSAL 2: APPROVAL AND CONTINUATION OF NEW INVESTMENT ADVISORY AGREEMENT
INTRODUCTION
As previously discussed, each of the Transactions may constitute an
"assignment" of the Current Agreement between the Trust and the Adviser and,
therefore, result in the automatic termination of the Current Agreement.
Accordingly, on June 19, 2000, the Board, including a majority of disinterested
trustees, unanimously approved the New Agreement with the Adviser, subject to
approval by the Fund's Shareholders. Although the New Advisory Agreement will be
executed and become effective immediately following its approval by
shareholders, Mr. Sullivan's retirement separation from the Adviser and its
Parent could also be deemed an assignment of the New Advisory Agreement,
resulting in its termination. Therefore, shareholders are being asked to approve
both the New Advisory Agreement (Proposal 2-A) and its continuation following
Mr. Sullivan's separation (Proposal 2-B). The following discussion is qualified
in its entirety by reference to the form of the New Agreement attached hereto as
Exhibit A.
CURRENT AGREEMENT AND NEW AGREEMENT
The Adviser has been the Fund's investment adviser since 1997 pursuant to
the Current Agreement, which is dated August 15, 1997. The Current Agreement was
last approved by shareholders on August 13, 1997 and last renewed by the Board,
including a majority of the Independent Trustees, on February 16, 2000.
Under the terms of the Current Agreement, subject to the expense
limitations described below, the Fund pays all its own operating expenses that
are not specifically assumed by the Adviser, including (i) the advisory fee;
(ii) interest, taxes and any governmental filing fees; (iii) compensation and
expenses of the Independent Trustees; (iv) legal, audit, custodial, fund
accounting and transfer agency fees and expenses; (v) fees and expenses related
to the organization of the Fund and registration and qualification of the Fund
and its shares under federal and state securities laws; (vi) expenses of
printing and mailing reports, notices and proxy material to shareholders, and
expenses incidental to meetings of shareholders; (vii) insurance premiums;
(viii) litigation and indemnification expenses and other extraordinary expenses
not incurred in the normal course of the business of the Trust; and (ix)
brokerage commissions and other transaction-related costs. THESE TERMS OF THE
CURRENT AGREEMENT WILL REMAIN THE SAME IN THE NEW AGREEMENT.
Under the Current Agreement, the Adviser receives a fee, accrued daily and
paid monthly, from the Trust for its management and advisory services at an
annual rate of 1.0% of the first $250 million of the Fund's average daily net
assets and .75% of the average daily net assets in excess of $250 million. The
Adviser has voluntarily agreed to reimburse the Trust for any annual operating
expenses in excess of 2% of the Fund's average daily net assets through December
31, 2000. In addition, the Adviser agreed in the Current Agreement that for any
fiscal year of the Trust during which the total of the Fund's expenses
(including investment advisory fees, but excluding interest, portfolio brokerage
commissions and expenses, taxes and extraordinary items) exceeds the lowest
expense limitation imposed in any state in which the
4
<PAGE> 8
Fund is then making sales of its shares or in which its shares are then
qualified for sale, the Adviser would reimburse the Fund for the excess amount
not otherwise excluded in the Agreement. (Due to changes in the Federal and
State securities laws, the Trust is not aware of any state which imposes expense
limitations on investment companies such as the Trust). THESE TERMS OF THE
CURRENT AGREEMENT WILL REMAIN THE SAME IN THE NEW AGREEMENT.
During the fiscal year ended September 30, 1999, the Fund incurred total
advisory fees of $172,359, but the Adviser waived fees or reimbursed expenses in
the aggregate amount of $31,486 pursuant to its expense limitation undertaking.
The Current Agreement will remain in effect so long as it is approved at
least annually by (a) the Board or by the vote of a majority of the outstanding
voting securities of the Fund and (b) the vote of a majority of the Independent
Trustees, cast in persons at a meeting called for the purpose of voting on such
approval. The Current Agreement may be terminated at any time without penalty,
by vote of the Trustees or by vote of a majority of the outstanding shares (as
defined in the 1940 Act) of the Fund, or by the Adviser on 60 days written
notice to the Trust, and will automatically and immediately terminate in the
event of its assignment (as defined in the 1940 Act), except that it will
continue after Mr. Sullivan's separation, which could be deemed an assignment.
The initial term of the New Agreement will end on March 31, 2001, (the
expiration date of the Current Agreement); the New Agreement may be continued
thereafter from year to year if approved at least annually by a majority of the
Independent Trustees, as well as either the entire Board or a majority of Fund
shareholders. THE NEW AGREEMENT CONTAINS THE SAME TERMS AS THE CURRENT
AGREEMENT.
INTERIM AGREEMENT
If the first Transactions constitutes an assignment of the Trust's current
investment agreement with the Adviser, the Current Agreement will automatically
terminate, as required by the 1940 Act. In anticipation of the Transactions and
the possible termination of the Current Agreement, the New Agreement between the
Trust and the Adviser is being proposed for approval by the Trust's
shareholders. The New Agreement will be executed and become effective
immediately following its approval by shareholders. Since Mr. Graver's
separation from the Parent will occur on July 31, 2000, possibly causing the
termination of the Current Advisory Agreement before the New Advisory Agreement
can become effective, the Board of Trustees has approved an interim investment
advisory contract with the Adviser. Under Paragraph b.2. of SEC Rule 15a-4, this
interim contract cannot extend more than 150 days, the investment advisory fee
cannot be greater than under the Current Advisory Agreement, and the investment
advisory fees paid under the interim Agreement must be deposited in escrow until
the New Advisory Agreement is approved by shareholders. With these exceptions,
the interim Agreement contains the same terms as the Current Advisory Agreement.
5
<PAGE> 9
ADMINISTRATION AGREEMENT
To assist in fulfilling certain of its administrative duties under the
Current Agreement, the Adviser has entered into an Administration Agreement with
Sunstone Financial Group, Inc. ("Sunstone") under which Sunstone furnishes
accounting, recordkeeping, operational oversight, and other administrative
services to the Fund. All of Sunstone's fees under the Administration Agreement
are paid by the Adviser. This Administration Agreement will terminate according
to its terms upon the termination of the Current Agreement. Sunstone and the
Adviser propose to enter into a new Administration Agreement, with identical
terms and conditions as the current Administration Agreement, upon termination
of the current Administration Agreement; the Board of Trustees of the Fund has
approved the new Administration Agreement.
BOARD OF TRUSTEES EVALUATION
The Board met on June 19, 2000, to consider the Transactions and their
anticipated effects on the Fund and the Adviser. At that meeting, the Adviser
represented that the Transactions would have no effect on the persons managing
the Fund or on the level of services provided to the Fund pursuant to the
Current Agreement. After considering all relevant information, the Board,
including a majority of the Independent Trustees voted to approve the New
Agreement and the continuation of the New Agreement following Mr. Sullivan's
separation: the Board of Trustees recommend that shareholders do the same.
During its deliberations, the Board used the assistance of legal
counsel in understanding its fiduciary duties and the ramifications of the
Transactions on the Fund, and the Board obtained assurances from the Adviser
that:
- the Adviser intends to comply with Section 15(f) of the 1940 Act and
is not aware of any express or implied term, condition, arrangement or
understanding that would impose an "unfair burden" on the Fund as a
result of the Transactions;
- the Adviser will take no action that would have the effect of imposing
an "unfair burden" on the Fund as a result of the Transactions; and
- the Adviser will pay the cost of preparing and distributing proxy
materials to and of holding the meeting of the Trust's shareholders as
well as other fees and expenses in connection with the reorganization,
including the fees and expenses of legal counsel to the Trust.
In evaluating the New Agreement, the Board took into account that the terms
relating to the service provided and the fees and expenses payable by the Fund
are the same as under the Current Agreement. As a result of its investigation
and consideration of the Transactions and the New Agreement at its June 19, 2000
meeting, the Board unanimously voted to approve the New Agreement, as well as
its continuation and to recommend both proposals to the shareholders of the Fund
for their approval.
The foregoing discussion relates to two proposals: Proposal 2-A is for the
approval of the New Agreement (following Mr. Graver's separation from the
Adviser), and Proposal 2-B is for the continuation of the New Agreement
following Mr. Sullivan's separation from the Adviser. Voting in favor of both
Proposals 2-A and 2-B will result in the continuation of the management of the
Fund by the Adviser after each of the Transactions; it is necessary for each of
the two proposals to be approved for the New Agreement to continue after the
Transactions. PLEASE VOTE ON BOTH PROPOSAL 2-A AND PROPOSAL 2-B.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL AND THE CONTINUATION OF THE
NEW AGREEMENT.
6
<PAGE> 10
PROPOSAL 3: SELECTION OF INDEPENDENT AUDITORS
A majority of the Independent Trustees selected Ernst & Young LLP ("E&Y"),
independent auditors, to audit the books and records of the Trust for the
current fiscal year. E&Y has served in this capacity since the Trust was
organized and has no direct or indirect financial interest in the Trust except
as independent auditors. The selection of E&Y as independent auditors of the
Trust is being submitted to the shareholders for ratification. A representative
of E&Y is expected to be available by telephone at the Meeting to respond to any
appropriate questions raised at the Meeting and may make a statement.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS FOR THE FUND.
OTHER MATTERS
The Board is unaware of any matters that will be presented for action at
the meeting other than the matters set forth herein. Should any other matters
requiring a vote of shareholders arise, the proxy in the accompanying form will
confer upon the person on persons entitled to vote the shares represented by
such proxy the discretionary authority to vote the shares as to any such other
matters in accordance with their best judgment in the interest of the Trust.
ADDITIONAL INFORMATION
TRUST OFFICERS
Information about the executive officers of the Trust, with their
respective dates of birth, terms as Trust officers indicated and principal
occupation for the past five years, is set forth below.
Andrew J. Goodwin, III (10/22/43), president of the Trust since August 15, 1997,
is an Officer of the Adviser and Vice Chairman of Optimum Investment Group, Ltd.
Keith F. Pinsoneault (10/25/47), vice president, secretary and treasurer of the
Trust since August 15, 1997, is a Managing Director of the Adviser and formerly
Chief Operating Officer and Director of Capital Markets for Rodman & Renshaw.
7
<PAGE> 11
INFORMATION REGARDING THE ADVISER
The Adviser is a registered investment adviser whose predecessor firm was
founded in 1981. The Adviser is located at 100 South Wacker Drive, Suite 2100,
Chicago, Illinois 60606-4005, and is organized as a limited partnership under
the laws of the State of Illinois. The Adviser is 99% owned by Optimum
Investment Group, Ltd. ("Parent"), which also has an ownership interest in three
other advisory firms. As of June 30, 2000, the combined assets under management
for the affiliated firms exceed $1 billion, with investment management provided
to both institutional and individual clients. Among the firms there are 28
professional and 23 staff members who provide investment and administrative
services to clients in equity, fixed income and venture capital portfolio
management.
The names and principal occupations of the controlling shareholders of the
Parent are as follows:
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
Steven F. Graver1 Officer, Adviser;
Officer, Optimum Investment Group, Ltd.
H. Steel Bokhof, Jr. Officer, Adviser;
Officer, Optimum Investment Group, Ltd.
Andrew J. Goodwin, III2 Officer, Adviser;
Officer, Optimum Investment Group, Ltd.
James F. Sullivan1 Officer, Adviser;
Officer, Optimum Investment Group, Ltd.
Principal, Burnham, Sullivan, Andelbradt & Co.
</TABLE>
PRINCIPAL UNDERWRITER
Dreher & Associates, Inc., One Oakbrook Terrace, Suite 708, Oakbrook
Terrace, Illinois 60181, serves as the Trust's principal underwriter pursuant to
an underwriting agreement.
ADMINISTRATOR
Sunstone Financial Group, Inc., 207 E. Buffalo Street, Suite 400,
Milwaukee, WI 53202, serves as the Trust's administrator pursuant to the
Administration Agreement.
-------------------------
1 After the Transactions, Messrs. Graver and Sullivan will no longer be
shareholders of the Adviser's Parent, nor will Mr. Graver continue to be
affiliated with the Adviser. Mr. Sullivan will continue as an employee of
the Parent.
2 As 85% General Partner of Goodwin Investors L.P.
8
<PAGE> 12
PRINCIPAL SHAREHOLDERS
To the best of the Trust's knowledge, as of July 14, 2000, no shareholder
held 5% or more of the Trust's Shares. As of July 14, 2000, the Trust's
Trustees and officers as a group owned less than 1% of the outstanding voting
securities of the Trust.
SOLICITATION OF PROXIES
Proxies will be solicited by the Trust, and the cost of solicitation will
be paid by the Adviser. Additional solicitation may be made by mail, personal
interview, telephone, e-mail, and telegraph by the Adviser who will not receive
additional compensation therefor.
PROPOSALS OF SHAREHOLDERS
The Trust does not intend to hold a regular or special meeting of
shareholders unless and until required by the 1940 Act. Therefore, the date of
the next meeting, if any, is not known. Shareholders wishing to submit
proposals for consideration for inclusion in a proxy statement for the next
meeting of shareholders should send their written proposals to Universal
Capital Investment Trust, 100 South Wacker Drive, Suite 2100, Chicago, Illinois
60606.
QUORUM, VOTING
Each valid proxy will be voted in accordance with the instructions on the
proxy and as the persons named in the proxy determine on such other business as
may come before the meeting. If no instructions are given, the proxy will be
voted FOR items 1, 2-A, 2-B and 3. Voting instructions given by telephone or
electronically transmitted instruments may be counted as if obtained pursuant to
procedures designed to verify that such instructions have been authorized. Any
shareholder giving a proxy has the power to revoke it at any time before it is
voted by written notice to the Trust (addressed to the Secretary at the
principal executive office of the Trust, 100 South Wacker Drive, Suite 2100,
Chicago, Illinois, 60606), in person at the meeting, by executing a superseding
proxy, or by submitting a notice of revocation to the Trust.
Election of each of the listed nominees for Trustee (Proposal 1) and
ratification of Ernst & Young as independent auditors of the Trust (Proposal 3)
require the affirmative vote of a majority of the votes cast at the Meeting in
person or by proxy.
Approval and continuation of the new investment advisory agreement
(Proposals 2-A and 2-B) require the affirmative vote of a "majority of the
outstanding voting securities" as defined in the 1940 Act, meaning the
affirmative vote of the lesser of (1) 67% of the voting securities of the Fund
at the Meeting if more than 50% of the outstanding shares of the Fund are
present in person or by proxy or (2) more than 50% of the outstanding shares of
the Fund.
The presence, in person or by proxy, of a majority of the votes of shares
of the Trust entitled to be cast at the Meeting shall be necessary and
sufficient to constitute a quorum for the transaction of business. In the event
that the necessary quorum to transact business or the vote required to approve
any Proposal is not obtained at the Meeting, the persons named as proxies may
propose one or more adjournments of the Meeting in accordance with applicable
law to
9
<PAGE> 13
permit further solicitation of proxies with respect to the Proposal that did not
receive the vote necessary for its passage or to obtain a quorum. Any such
adjournment as to a matter will require the affirmative vote of the holders of a
majority of the Trust's or the Fund's shares (as applicable) present in person
or by proxy at the Meeting. The persons named as proxies will vote in favor of
any such adjournment if they determine that such adjournment and additional
solicitation are reasonable and in the interest of the Trust's or the Fund's
shareholders
For purposes of determining the presence of a quorum for transacting
business at the Meeting, abstentions and broker "non-votes" will be treated as
shares that are present but which have not been voted. Broker non-votes are
proxies received by the Trust from brokers or nominees when the broker or
nominee has neither received instructions from the beneficial owner or other
persons entitled to vote nor has discretionary power to vote on a particular
matter. Abstentions and broker non-votes will not be counted in favor of, but
will have no other effect on the votes for Proposal 1 and Proposal 3,
respectively. Abstentions and broker non-votes will have the effect of a "no"
vote on Proposals 2-A and 2-B. Shareholders of the Trust will vote separately
with respect to each Proposal.
Accordingly, shareholders are urged to forward their voting instructions
promptly.
By Order of the Board of Trustees
of the Trust,
Keith F. Pinsoneault
Vice President, Secretary and
Treasurer
July 18, 2000
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY OR VOTING INSTRUCTION CARD IN THE ACCOMPANYING
ENVELOPE. PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING
AND YOUR COOPERATION WILL BE APPRECIATED.
10
<PAGE> 14
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
OPTIMUM INVESTMENT ADVISERS, L.P., a registered investment adviser (the
"Adviser"), a limited partnership organized under the laws of the State of
Illinois and having its principal office and place of business in Chicago,
Illinois (the "Adviser"), and UNIVERSAL CAPITAL INVESTMENT TRUST, a
Massachusetts business trust registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act") and having its
principal office and place of business in Chicago, Illinois (the "Trust"),
hereby agree as follows:
1. APPOINTMENT OF ADVISER.
(a) Initial Fund. The Trust appoints the Adviser to act as manager and
investment adviser to Universal Capital Growth Fund (the "Fund"), a
series of the Trust, for the period and on the terms herein set forth.
The Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
(b) Additional Funds. If the Trust establishes one or more series of
shares other than the Fund with respect to which it wishes to retain
the Adviser to render management and investment advisory services
hereunder, it shall notify the Adviser in writing, indicating the
advisory fee which will be payable with respect to the additional
series of shares. If the Adviser is willing to render such services,
it shall notify the Trust in writing, whereupon such series of shares
shall become a Fund hereunder.
2. DUTIES OF ADVISER.
The Adviser, at its own expense, shall furnish the following services
and facilities to the Trust:
(a) Investment Program. The Adviser will (i) furnish continuously an
investment program of the Fund, (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust (the
"Trustees")) what investments shall be purchased, held, sold or
exchanged by the Fund and what portion, if any, of the assets of the
Fund shall be held uninvested, and (iii) make changes on behalf of the
Trust in the investments of the Fund. The Adviser will also manage,
supervise and conduct the other affairs and business of the Trust and
the Fund and matters incidental thereto, subject always to the control
of the Trustees and to the provisions of the Declaration of Trust and
Bylaws and the 1940 Act.
1
<PAGE> 15
EXHIBIT A
(b) Office Space and Facilities. The Adviser shall furnish the Trust
office space in the offices of the Adviser, or in such other place or
places as may be agreed upon from time to time, and all necessary
office facilities, simple business equipment, supplies, utilities, and
telephone service for managing the affairs and investments of the
Trust. These services are exclusive of the necessary services and
records of any dividend disbursing agent, transfer agent, registrar,
custodian or fund accounting agent.
(c) Personnel. The Adviser shall provide all necessary executive and
clerical personnel for administering the affairs of the Trust and
shall compensate the Trustees and all personnel and officers of the
Trust if such persons are also employees of the Adviser or its
affiliates, except as provided in Paragraph 3(g) hereof.
(d) Portfolio Transactions. The Adviser shall place all orders for the
purchase and sale of portfolio securities for the account of the Fund
with brokers or dealers selected by the Adviser, although the Fund
will pay the actual brokerage commissions on portfolio transactions in
accordance with Paragraph 3(d). In executing portfolio transactions
and selecting brokers or dealers, the Adviser will use its best
efforts to seek on behalf of the Trust or the Fund the best overall
terms available for any transaction. The Adviser shall consider all
factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness
of the commission, if any (for the specific transaction and on a
continuing basis).
To the extent contemplated by the Trust's registration statement
under the 1933 Act, in evaluating the best overall terms available,
and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Fund and/or other
accounts over which the Adviser or an affiliate of the Adviser
exercises investment discretion. Consistent with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. and
subject to seeking the most favorable combination of net price and
execution available, the Adviser may consider sales of shares of a
Fund as a factor in the selection of broker-dealers to execute
portfolio transactions for the Fund. The Adviser is authorized to pay
to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the
Fund which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only
if, the Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that
particular transaction or in terms of all of the accounts over which
investment discretion is so exercised.
2
<PAGE> 16
EXHIBIT A
The Adviser (or an affiliate of the Adviser) may act as broker
for Trust in connection with the purchase or sale of securities by or
to Trust if and to the extent permitted by procedures adopted from
time to time by the Trustees. Such brokerage services are not within
the scope of the duties of the Adviser under this agreement, and,
within the limits permitted by law and the Trustees, the Adviser (or
an affiliate of the Adviser) may receive brokerage commissions, fees
or other remuneration from Trust for such services in addition to its
fee for services as Adviser.
(e) Other Services. Within the limits permitted by law, the
Adviser may receive compensation from the Trust for other services
performed by it for the Trust which are not within the scope of the
duties of the Adviser under this agreement.
3. ALLOCATION OF EXPENSES.
Except for the services and facilities to be provided by the Adviser as set
forth in Paragraph 2 above, the Trust assumes and shall pay all expenses for all
other Trust operations and activities and shall reimburse the Adviser for any
such expenses incurred by the Adviser. The expenses to be borne by the Trust
shall include, without limitation:
(a) the charges and expenses of any registrar, stock transfer or
dividend disbursing agent, custodian or depository appointed by the
Trust for the safekeeping of its cash, portfolio securities and other
property or agent performing fund accounting services;
(b) payments under the Trust's distribution plan or plans adopted
pursuant to rule 12b-1 under the 1940 Act;
(c) the charges and expenses of independent auditors;
(d) brokerage commissions and any other costs incurred for
transactions in the portfolio securities of the Trust;
(e) all taxes, including issuance and transfer taxes, and corporate
fees payable by the Trust to Federal, state or other governmental
agencies;
(f) the cost of stock certificates (if any) representing shares of the
Trust;
(g) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and Exchange
Commission and various states and other jurisdictions, including
reimbursements of actual expenses incurred by the Adviser in
performing such functions for the
3
<PAGE> 17
EXHIBIT A
Trust and including compensation of employees of the Adviser in
proportion to the time spent on such matters;
(h) all expenses of shareholders' and Trustees' meetings, including
meetings of committees and of preparing, printing and mailing proxy
statements, quarterly reports, semi-annual reports, annual reports and
other communications to shareholders (but not expenses of printing and
mailing any such documents used for promotional purposes);
(i) all expenses of preparing and setting in type prospectuses, and
expenses of printing and mailing the same to shareholders (but not
expenses of printing and mailing of prospectuses and literature used
for promotional purposes);
(j) compensation and travel expenses of Trustees who are not
"interested persons" within the meaning of the 1940 Act;
(k) the expense of furnishing, or causing to be furnished, to each
shareholder a statement of the shareholder's account, including the
expense of mailing;
(l) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's corporate and financial
structure and relations with its shareholders, issuance of Trust
shares and registration and qualification of securities under Federal,
state and other laws;
(m) the expenses of attendance at professional meetings of
organizations such as the Investment Company Institute by the Trustees
and officers of the Trust, and the membership or association dues of
such organizations;
(n) the cost and expense of maintaining the books and records of the
Trust, including general ledger accounting;
(o) the expense of obtaining and maintaining insurance including a
fidelity bond as required by Section 17(g) of the 1940 Act;
(p) interest payable on Trust borrowings; and
(q) postage.
4
<PAGE> 18
EXHIBIT A
4. ADVISORY FEE.
(a) For the services and facilities to be provided to the Fund by the
Adviser as provided in Paragraph 2 hereof, the Trust shall pay the
Adviser a monthly fee with respect to the Fund as soon as practical
after the last day of each calendar month, which fee shall be paid at
the rate set forth below based upon the Monthly Average Net Assets (as
defined in subparagraph (c) below) of the Fund for such calendar month:
ADVISORY FEE SCHEDULE
<TABLE>
<CAPTION>
Monthly Average Monthly
Net Assets Fee Rate
---------- --------
<S> <C>
Up to and including $250 million 1/12 of 1.00%
Over $250 million 1/12 of .75%
</TABLE>
(b) In the case of termination of this Agreement during any
calendar month, the fee for that month shall be reduced
proportionately based upon the number of calendar days during
which it is in effect and the fee shall be computed upon the
average net assets of the Fund for the business days during
which it is so in effect.
(c) The "Monthly Average Net Assets" of the Fund for any
calendar month shall be equal to the quotient produced by
dividing (i) the sum of the net assets of the Fund, determined
in accordance with procedures established from time to time by
or under the direction of the Trustees in accordance with the
Agreement and Declaration of Trust of the Trust, as of the
close of business on each day during such month that the Fund
was open for business, by (ii) the number of such days.
5. EXPENSE LIMITATION.
The Adviser agrees that for any fiscal year of the Trust during which the
total of all expenses of the Fund (including investment advisory fees under this
agreement, but excluding interest, portfolio brokerage commissions and expenses,
taxes and extraordinary items) exceeds the lowest expense limitation imposed in
any state in which the Fund is then making sales of its shares or in which its
shares are then qualified for sale, the Adviser will reimburse the Fund for such
expenses not otherwise excluded from reimbursement by this Paragraph 5 to the
extent that they exceed such expense limitation.
6. TRUST TRANSACTIONS.
The Adviser agrees that neither it nor any of its officers or directors
will take any long or short position in the shares of the Trust; provided,
however, that such prohibition:
5
<PAGE> 19
EXHIBIT A
(a) shall not prevent the Adviser from purchasing shares of the Trust
if orders to purchase such shares are placed upon the receipt by the
Adviser of purchase orders for such shares and are not in excess of
such purchase orders received by the Adviser; and
(b) shall not prevent the purchase of shares of the Trust by any of
the persons above described for their account and for investment.
7. RELATIONS WITH TRUST.
Subject to and in accordance with the Agreement and Declaration of Trust
and Bylaws of the Trust and the Articles of Incorporation and Bylaws of the
Adviser, respectively, it is understood that the Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, officers, or otherwise, that directors,
officers, agents and shareholders of the Adviser are or may be interested in the
Trust as Trustees, officers, shareholders or otherwise, and that the effect of
any such adverse interests shall be governed by the Agreement and Declaration of
Trust, Articles of Incorporation and Bylaws.
8. LIABILITY OF ADVISER AND OFFICERS AND TRUSTEES OF THE TRUST
No provision of this Agreement shall be deemed to protect the Adviser
against any liability to the Trust or its shareholders to which it might
otherwise be subject by reason of any willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement. Nor shall any provision hereof be
deemed to protect any Trustee or officer of the Trust against any such liability
to which he might otherwise be subject by reason of any willful misfeasance, bad
faith, gross negligence or reckless disregard of his obligations and duties. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise the remainder of this Agreement shall not
be affected thereby.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective on the date
hereof. Unless terminated as herein provided, this Agreement shall
remain in full force and effect until March 31, 2001 and shall
continue in full force and effect for successive periods of one year
thereafter so long as such continuance is approved at least annually
(i) by either the Trustees or by vote of a majority of the outstanding
voting shares (as defined in the 1940 Act) of the Fund, and (ii) in
either event by the vote of a majority of the Trustees who are not
parties to this Agreement or "interested persons" (as defined in the
1940 Act) of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
6
<PAGE> 20
EXHIBIT A
Any approval of this Agreement by the holders of a majority of
the outstanding shares (as defined in the 1940 Act) of the Fund shall
be effective to continue this Agreement notwithstanding that this
Agreement has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be
required by any other applicable law or otherwise.
(b) Termination. This Agreement may be terminated at any time, without
payment of any penalty, by vote of the Trustees or by vote of a
majority of the outstanding shares (as defined in the 1940 Act) of the
Fund, or by the Adviser on sixty (60) days' written notice to the
other party.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment.
10. SERVICES NOT EXCLUSIVE.
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
11. LIMITATION OF LIABILITY.
The obligations of the Trust hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Trust,
personally, but shall bind only the assets and property of the Trust as provided
in the Agreement and Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the Trustees and shareholders
of the Trust and signed by an authorized officer of the Trust, acting as such,
and neither such authorization by the Trustees and shareholders nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as provided in its
Declaration of Trust.
IN WITNESS WHEREOF, this Investment Advisory Agreement has been executed
for the Adviser and the Trust by their duly authorized officers, as of the
day of , 2000.
OPTIMUM INVESTMENT ADVISERS, L.P.
By:
--------------------------------------
UNIVERSAL CAPITAL INVESTMENT TRUST
By:
--------------------------------------
Andrew J. Goodwin, President
7
<PAGE> 21
SPECIAL MEETING OF SHAREHOLDERS OF THE
UNIVERSAL CAPITAL INVESTMENT TRUST TO BE HELD
ON AUGUST 17, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Universal Capital Investment Trust (the "Trust") hereby appoint Andrew J.
Goodwin, III, or Keith F. Pinsoneault, or either of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of
Universal Capital Investment Trust, 100 South Wacker Drive, Suite 2100, Chicago,
Illinois 60606, which the undersigned is entitled to vote at the Special Meeting
of Shareholders to be held on August 17, 2000, at 100 South Wacker Drive, Suite
2100, Chicago, Illinois 60606, at 8:00 a.m., (Chicago time), and at any
adjournments thereof.
The attorneys named will vote the shares represented by this proxy in
accordance with the choices made on this ballot. Discretionary authority is
hereby conferred as to all other matters as may properly come before the Special
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF UNIVERSAL
CAPITAL INVESTMENT TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN
THE MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS.
Proposal 1 To elect Andrew J. Goodwin, III, Robert A. Korajczyk,
Robert F. Seebeck, and Alan L. Zable, as Trustees of the Trust.
FOR AGAINST WITHHOLD AUTHORITY TO VOTE
FOR ALL EXCEPT
If you do not wish your shares to be voted "FOR" a particular nominee, mark
the "For All Except" box and strike a line through the nominee(s') name.
Your shares will be voted for the remaining nominees.
Proposal 2-A To approve a new Investment Advisory Agreement with Optimum
Investment Advisers, L.P.
FOR AGAINST ABSTAIN
Proposal 2-B To continue the New Investment Agreement with Optimum Investment
Advisers, L.P.
FOR AGAINST ABSTAIN
Proposal 3 To ratify the appointment of Ernst & Young LLP as auditors of the
Trust for the current fiscal year.
FOR AGAINST ABSTAIN
Mark with an X in the box.
YOUR VOTE IS IMPORTANT. Please complete, sign and return this card as soon
as possible.
Date
-----------------------------
Signature
-----------------------------
Signature (Joint Owners)
<PAGE> 22
Please sign this proxy exactly as your name appears on the books of the
Trust. Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be that
of an authorized officer who should state his or her title.
