Registration No. 33-51910
811-7160
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No.
Post-Effective Amendment No. 14
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 15
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Maplewood Investment Trust, a series company
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(Exact Name of Registrant as Specified in Charter)
312 Walnut Street, 21st Floor, Cincinnati, Ohio 45202
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (513)629-2000
John F. Splain, Esq.
312 Walnut Street, 21st Floor
Cincinnati, OH 45202
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/ X/ immediately upon filing pursuant to Rule 485(b)
/ / on ( ) pursuant to Rule 485(b)
/ / 60 days after filing pursuant to Rule 485(a)
/ / on ( ) pursuant to Rule 485(a)
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933, as amended, pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended. The Rule 24f-2 Notice for the fiscal year ended
February 28, 1998 was filed on May 15, 1998.
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MAPLEWOOD INVESTMENT TRUST, A SERIES COMPANY
Cross-Reference Sheet Pursuant to Rule 495(a)
PART A PROSPECTUS
FORM ITEM CROSS-REFERENCE
Item 1. Cover Page Cover Page
Item 2. Synopsis Prospectus Summary; Synopsis of
Costs and Expenses
Item 3. Condensed Financial Financial Highlights;
Information Dividends, Distributions, Taxes
and Other Information
Item 4. General Description Investment Objective,
of Registrant Investment Policies and Risk
Considerations; Management of the
Fund
Item 5. Management of the Fund Management of the Fund
Item 5A. Management's Discussion Not Applicable
of Fund Performance
Item 6. Capital Stock and Dividends, Distributions,
Distributions, Taxes and Other
Other Securities Information
Item 7. Purchase of Securities How to Purchase Shares;
Being Offered How Shares are Valued;
Distributor and Distribution
Plan; Application
Item 8. Redemption or Repurchase How to Redeem Shares
Item 9. Pending Legal Proceedings Not Applicable
PART B STATEMENT OF ADDITIONAL INFORMATION
FORM ITEM CROSS-REFERENCE
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
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Item 12. General Information Description of the Trust
and History
Item 13. Investment Objectives Investment Objective and
and Policies Policies; Investment Limitations;
Appendix A-Description of
Ratings;
Item 14. Management of the Fund Trustees and Officers
Item 15. Control Persons and Trustees and Officers
Principal Holders of
Securities
Item 16. Investment Advisory and Investment Advisor;
Other Services Administrator;
Distributor; Other Services;
Distribution Plan Under Rule
12b-1
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock and Description of the Trust
Other Securities
Item 19. Purchase, Redemption Special Shareholder Services;
and Pricing of Additional Purchase and
Securities Being Redemption Information; How Share
Offered Price is Determined
Item 20. Tax Status Additional Tax Information
Item 21. Underwriters Distributor
Item 22. Calculation of Calculation of
Performance Data Performance Data
Item 23. Financial Statements Financial Statements and
Reports
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PROSPECTUS
July 1, 1998
MISSISSIPPI OPPORTUNITY FUND
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The investment objective of the MISSISSIPPI OPPORTUNITY FUND is to provide
long-term capital growth by investing primarily in the common stocks and other
equity securities of publicly-traded companies headquartered in Mississippi, and
those companies having a significant presence in the state. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the investment policies described in this Prospectus.
INVESTMENT ADVISOR
Vector Money Management, Inc.
4266 I-55 North, Suite 102
Jackson, Mississippi 39211
The Mississippi Opportunity Fund (the "Fund") is a non-diversified, open-end
series of Maplewood Investment Trust, a series company, a registered management
investment company. This Prospectus provides you with the basic information you
should know before investing. You should read it and keep it for future
reference.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANKING OR DEPOSITORY INSTITUTION. SHARES ARE NOT FEDERALLY INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF
THE PRINCIPAL AMOUNT INVESTED.
A Statement of Additional Information, dated July 1, 1998, containing additional
information about the Fund has been filed with the Securities and Exchange
Commission and is incorporated by reference in this Prospectus in its entirety.
The Fund's address is P.O. Box 5354, Cincinnati, Ohio 45201-5354, and its
telephone number is 1-800-580-4820. A copy of the Statement of Additional
Information may be obtained at no charge by calling or writing the Fund.
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TABLE OF CONTENTS
PROSPECTUS SUMMARY ........................................................
SYNOPSIS OF COSTS AND EXPENSES.............................................
FINANCIAL HIGHLIGHTS.......................................................
INVESTMENT OBJECTIVE, INVESTMENT POLICIES
AND RISK CONSIDERATIONS..................................................
HOW TO PURCHASE SHARES.....................................................
HOW TO REDEEM SHARES.......................................................
HOW SHARES ARE VALUED......................................................
MANAGEMENT OF THE FUND.....................................................
DISTRIBUTOR AND DISTRIBUTION PLAN..........................................
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION .....................
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PROSPECTUS SUMMARY
THE FUND. The Mississippi Opportunity Fund (the "Fund") is a non-
diversified, open-end management investment company commonly known
as a "mutual fund." The Fund's investment objective is to provide long-
term capital growth. While there is no assurance that the Fund will
achieve its investment objective, it endeavors to do so by following
the investment policies described in this Prospectus.
INVESTMENT APPROACH. In seeking to achieve the Fund's investment
objective, the Fund will invest primarily in the common stocks and
other equity securities of publicly-traded companies headquartered in
Mississippi, and those companies having a significant presence in the
state. Realization of current income is not a significant investment
consideration and any income realized will be incidental to the Fund's
objective. (See "Investment Objective, Investment Policies and Risk
Considerations.")
INVESTMENT ADVISOR. Vector Money Management, Inc. (the "Advisor")
serves as investment advisor to the Fund. For its services, the
Advisor receives compensation of .875% of the average daily net assets
of the Fund. (See "Management of the Fund.")
PURCHASE OF SHARES. Shares of the Fund are offered at net asset value
plus a maximum 3.5% sales charge and are subject to 12b-1 distribution
fees of up to .50% of average daily net assets. Shares may be
purchased at reduced sales charges or with no sales charge through
purchases described in "How to Purchase Shares" in this Prospectus.
The minimum initial investment for purchases is $2,000 ($1,000 for IRA
accounts). (See "How to Purchase Shares.")
REDEMPTION OF SHARES. There is currently no charge for redemptions.
Shares may be redeemed at any time in which the Fund is open for
business at the net asset value next determined after receipt of a
redemption request by the Fund. A shareholder who submits written
authorization may redeem shares by telephone. (See "How to Redeem
Shares.")
DIVIDENDS AND DISTRIBUTIONS. Net investment income and net capital
gains, if any, of the Fund are distributed annually. Shareholders may
elect to receive dividends and distributions in cash or the dividends
and distributions may be reinvested in additional Fund shares. (See
"Dividends, Distributions, Taxes and Other Information.")
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MANAGEMENT. The Fund is a series of Maplewood Investment Trust, a
series company (the "Trust"), the Board of Trustees of which is
responsible for overall management of the Trust and the Fund. The
Trust has employed Countrywide Fund Services, Inc. (the
"Administrator") to provide administration, accounting and transfer
agent services. (See "Management of the Fund.")
DISTRIBUTOR. CW Fund Distributors, Inc. (the "Distributor") serves as
the national distributor of shares of the Fund. For its services, the
Distributor receives commissions on the sale of shares of the Fund
consisting of the portion of the sales charge remaining after the
discounts it allows to securities dealers. (See "Distributor and
Distribution Plan.")
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SYNOPSIS OF COSTS AND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Charge Imposed on Purchases
(As a percentage of offering price) 3.50%
Deferred Sales Charge None
Sales Charge Imposed on Reinvested Dividends None
Redemption Fee None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average net assets)
Management Fees After Waivers(1) .00%
12b-1 Fees(2) .50%
Other Expenses After Reimbursements 1.62%
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Total Operating Expenses After Waivers
and Reimbursements(3) 2.12%
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(1) Absent waivers of management fees, such fees would have been .875% for
the fiscal year ended February 28, 1998.
(2) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales loads permitted by the National Association of
Securities Dealers.
(3) Absent waivers of management fees and expense reimbursements by the
Advisor, total operating expenses would have been 4.88% for the fiscal
year ended February 28, 1998.
EXAMPLE: You would pay the following expenses on a $1,000 investment,
whether or not you redeem at the end of the period, assuming 5% annual
return:
1 Year $ 56
3 Years 99
5 Years 145
10 Years 272
The purpose of the foregoing table is to assist investors in the Fund in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Fund" for more information about the fees and
costs of operating the Fund. The Annual Fund Operating Expenses shown above are
based upon actual operating history for the fiscal year ended February 28, 1998.
THE EXAMPLE SHOWN SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES IN THE FUTURE MAY BE GREATER OR LESS THAN THOSE SHOWN.
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FINANCIAL HIGHLIGHTS
The following financial information has been audited by KPMG Peat
Marwick LLP, independent auditors, whose report covering the financial
statements for the fiscal year ended February 28, 1998 is contained in the
Statement of Additional Information. This information should be read in
conjunction with those financial statements and notes thereto, which are also
contained in the Statement of Additional Information, a copy of which may be
obtained at no charge by calling the Fund.
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD
<TABLE>
<S> <C> <C> <C>
Year Year Period
Ended Ended Ended
Feb. 28, 1998 Feb. 28, 1997 Feb. 29, 199(A)
Net asset value at beginning of period $ 11.78 $ 11.22 $ 10.00
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Income from investment operations:
Net investment loss (0.13) (0.10) (0.03)
Net realized and unrealized gains
on investments 4.68 0.76 1.27
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Total from investment operations 4.55 0.66 1.24
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Distributions from net realized gains (0.06) (0.10) (0.02)
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Net asset value at end of period $ 16.27 $ 11.78 $ 11.22
=============== =============== =================
Total return (B) 38.64% 5.92% 12.41%
================ =============== =================
Net assets at end of period $ 4,000,490 $ 1,813,797 $ 1,448,527
================= ================ ==================
Ratio of expenses to average net assets
Before expense reimbursement and waived fees 4.88% 5.29% 6.90%(D)
After expense reimbursement and waived fees 2.12% 2.11% 2.12%(D)
Ratio of net investment loss to average net assets (1.03)% (4.08)% (5.20)%(D)
Portfolio turnover rate 14% 15% 7%
Average commission rate per share (C) $ 0.0777 $ 0.0877 --
(A) Represents the period from the commencement of operations (April 4, 1995) through February 29, 1996.
(B) The total returns shown do not include the effect of applicable sales loads.
(C) Beginning with the year ended February 28, 1997, the Fund is required to disclose its average commission
for purchases and sales of investment securities.
(D) Annualized.
</TABLE>
Further information about the performance of the Fund is contained in the Annual
Report, a copy of which can be obtained at no charge by calling the Fund.
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INVESTMENT OBJECTIVE, INVESTMENT POLICIES
AND RISK CONSIDERATIONS
The investment objective of the Fund is to provide long-term capital growth by
investing primarily in common stocks and other equity securities of
publicly-traded companies headquartered in Mississippi, and those companies
having a significant presence in the state ("Mississippi Securities").
Realization of current income will not be a significant investment
consideration, and any such income realized should be considered incidental to
the Fund's objective. Any investment involves risk, and there can be no
assurance that the Fund will achieve its investment objective. The investment
objective and fundamental investment limitations of the Fund may not be altered
without the prior approval of a majority, as defined by the Investment Company
Act of 1940 (the "1940 Act"), of the Fund's shares.
The Advisor believes that the demographic and economic characteristics of
Mississippi, including population, employment, retail sales, personal income,
bank loans, bank deposits and residential construction are such that many
companies headquartered in the state, or having a significant presence in the
area by virtue of having a significant portion of their corporate earnings
generated from operations in the state and/or a significant number of employees
in the state, have a greater than average potential for capital appreciation. If
a company is not headquartered in Mississippi, the Advisor will consider such
company as having a "significant presence" in the state if 25% or more of its
revenues or earnings are generated from operations (including plants, offices or
a sales force) based in Mississippi, or if such company has 400 or more
employees in its operations within the State of Mississippi.
INVESTMENT SELECTION. Through fundamental analysis the Advisor will attempt to
identify securities and groups of securities with potential for capital
appreciation. Under normal market conditions, not less than 75% of the Fund's
total assets will be invested in Mississippi Securities. The Advisor will
generally focus on common stocks and other equity securities of companies
headquartered or having a significant presence in Mississippi. The Fund will
generally remain fully invested at all times. The Advisor intends to limit
portfolio turnover in the Fund, believing that a long-term rather than a
short-term selection of investments is preferable.
The equity securities in which the Fund may invest include common stocks,
convertible preferred stocks, straight preferred stocks and convertible bonds.
The Fund may also invest up to 5% of its net assets in warrants or rights to
acquire equity securities other than those acquired in units or attached to
other securities. (See "Investment Limitations.")
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<PAGE>
The Fund's concentration in companies headquartered in or having a significant
presence in Mississippi generally will tie the performance of the Fund to the
economic environment of the state and the surrounding area. There is no
assurance that the demographic and economic characteristics and other factors
that the Advisor believes favor companies in Mississippi will continue in the
future. Moreover, the Fund's portfolio may include securities of smaller
companies and companies that are not nationally recognized. The prices of stocks
of such companies generally are more volatile than those of larger or more
mature companies, their securities are generally less liquid, and they are more
likely to be negatively affected by adverse economic or market conditions.
Moreover, because of its concentration, the Fund's portfolio may be invested in
a smaller number of companies than a general equity mutual fund. This may result
in investments by the Fund in a smaller number of industry sectors.
Under normal market conditions, at least 90% of the Fund's total assets will be
invested in equity securities (with at least 75% of the Fund's total assets
invested in Mississippi Securities). Warrants and rights will be excluded for
purposes of this calculation. As a temporary defensive measure, however, the
Fund may invest up to 100% of its total assets in investment grade bonds, U.S.
Government Securities or money market instruments. When the Fund invests in
investment grade bonds, U.S. Government Securities or money market instruments
as a temporary defensive measure, it is not pursuing its stated investment
objective.
U.S. GOVERNMENT SECURITIES. The Fund may invest a portion of its assets in U.S.
Government Securities. "U.S. Government Securities" include U.S. Treasury
notes, U.S. Treasury bonds, and U.S. Treasury bills, obligations guaranteed by
the U.S. Government such as Government National Mortgage Association
certificates as well as obligations of U.S. Government authorities, agencies and
instrumentalities such as Federal National Mortgage Association, Federal Home
Loan Mortgage Corporation, Federal Farm Credit Bank, Federal Home Loan Bank,
Resolution Funding Corporation, Financing Corporation, Tennessee Valley
Authority and Student Loan Marketing Association. U.S. Government Securities
may be acquired subject to repurchase agreements. While obligations of some
U.S. Government sponsored entities are supported by the full faith and credit of
the U.S. Government, several are supported by the right of the issuer to
borrow from the U.S. Government, and still others are supported only by the
credit of the issuer itself. The guarantee of the U.S. Government does not
extend to the yield or value of the U.S. Government Securities held by the Fund
or to the Fund's shares.
MONEY MARKET INSTRUMENTS. Money market instruments may be purchased for
temporary defensive purposes when the Advisor believes that unusually volatile
or unstable economic and market
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conditions exist. When the Fund assumes a temporary defensive posture, it may
invest up to 100% of its net assets in money market instruments. Under normal
circumstances, money market instruments will typically represent a portion of
the Fund's portfolio, as funds awaiting investment, to accumulate cash for
anticipated purchases of portfolio securities and to provide for shareholder
redemptions and operational expenses of the Fund. Money market instruments
mature in thirteen months or less from the date of purchase and include U.S.
Government Securities (defined above) and corporate debt securities (including
those subject to repurchase agreements), bankers' acceptances and certificates
of deposit of domestic branches of U.S. banks, and commercial paper (including
variable amount demand master notes). At the time of purchase, money market
instruments will have a short-term rating in one of the two highest categories
by any nationally recognized statistical rating organization ("NRSRO") or, if
not rated, of equivalent quality in the Advisor's opinion. See the Statement of
Additional Information for a further description of money market instruments.
REPURCHASE AGREEMENTS. The Fund may acquire U.S. Government Securities or other
high-grade debt securities subject to repurchase agreements. A repurchase
agreement transaction occurs when the Fund acquires a security and
simultaneously resells it to the vendor (normally a member bank of the Federal
Reserve or a registered Government Securities dealer) for delivery on an agreed
upon future date. The repurchase price exceeds the purchase price by an amount
which reflects an agreed upon market interest rate earned by the Fund effective
for the period of time during which the repurchase agreement is in effect.
Delivery pursuant to the resale typically will occur within one to five days of
the purchase. For purposes of the 1940 Act, a repurchase agreement is considered
to be a loan collateralized by the securities subject to the repurchase
agreement. The Fund will not enter into a repurchase agreement which will cause
more than 10% of its assets to be invested in repurchase agreements which extend
beyond seven days and other illiquid securities.
INVESTMENT COMPANIES. In order to achieve its investment objective, the Fund may
invest in the securities of open-end investment companies which are generally
authorized to invest in securities eligible for purchase by the Fund. To the
extent the Fund does so, Fund shareholders would indirectly pay a portion of the
operating costs of the underlying investment companies. These costs include
management, brokerage, shareholder servicing and other operational expenses.
Indirectly, then, shareholders may pay higher operational costs than if they
owned the underlying investment companies directly. The Fund will only invest in
other investment companies by purchase of such securities on the open market
where no commission or profit to a sponsor or dealer results from the purchase
other than the
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customary broker's commissions or when the purchase is part of a plan of merger,
consolidation, reorganization or acquisition. The Advisor will waive its
advisory fee for that portion of the Fund's assets invested in other investment
companies, except when such purchase is part of a plan of merger, consolidation,
reorganization or acquisition. The Fund may invest up to 10% of its total assets
in securities of other investment companies. In addition, the Fund will not
invest more than 5% of its total assets in securities of any single investment
company, nor will it purchase more than 3% of the outstanding voting securities
of any investment company.
REAL ESTATE SECURITIES. The Fund may not invest in real estate (including
limited partnership interests), but may invest in readily marketable securities
secured by real estate or interests therein or issued by companies that invest
in real estate or interests therein. The Fund may also invest in readily
marketable interests in real estate investment trusts ("REITs"). REITs are
generally publicly traded on the national stock exchanges and in the
over-the-counter market and have varying degrees of liquidity.
OPTIONS. When the Advisor believes that individual portfolio securities are
approaching the top of the Advisor's growth and price expectations, covered call
options (calls) may be written (sold) against such securities in a disciplined
approach to selling portfolio securities. The Fund writes options only for
hedging purposes and not for speculation. If the Advisor is incorrect in its
expectations and the market price of a stock subject to a call option rises
above the exercise price of the option, the Fund will lose the opportunity for
further appreciation of that security. Additional information on writing covered
call options is contained in the Statement of Additional Information.
FACTORS TO CONSIDER. The Fund is not intended to be a complete investment
program and there can be no assurance that the Fund will achieve its investment
objective. To the extent that a major portion of the Fund's portfolio consists
of common stocks and other equity securities, it may be expected that its net
asset value will be subject to greater fluctuation than a portfolio containing
mostly fixed-income securities. The Fund is a non-diversified fund and therefore
may invest more than 5% of its total assets in the securities of one or more
issuers. Because a relatively high percentage of the assets of the Fund may be
invested in the securities of a limited number of issuers, the value of shares
of the Fund may be more sensitive to any single economic, business, political or
regulatory occurrence than the value of shares of a diversified investment
company. The Fund may borrow only under certain limited conditions (including to
meet redemption requests), but not to purchase securities. Borrowing, if done,
would tend to exaggerate the effects of market fluctuations in the Fund's net
asset value until repaid. (See "Borrowing.")
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<PAGE>
PORTFOLIO TURNOVER. The Fund sells portfolio securities without regard to the
length of time they have been held in order to take advantage of new investment
opportunities. Nevertheless, the Fund's annual portfolio turnover generally is
not expected to exceed 50%. The degree of portfolio activity affects the
brokerage costs of the Fund. The portfolio turnover of the Fund for the fiscal
year ended February 28, 1998 was 14%.
BORROWING. The Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase the limit to 15% of its total assets to
meet redemption requests which might otherwise require untimely disposition of
portfolio holdings. To the extent the Fund borrows for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If, while such borrowing is in effect, the value of the Fund's
assets declines, the Fund would be forced to liquidate portfolio securities when
it is disadvantageous to do so. The Fund would incur interest and other
transaction costs in connection with such borrowing. The Fund will not make any
additional investments while its outstanding borrowings exceed 5% of the current
value of its total assets.
ILLIQUID INVESTMENTS. The Fund may invest up to 10% of its net assets in
illiquid securities. Illiquid securities are those that may not be sold or
disposed of in the ordinary course of business within seven days at
approximately the price at which they are valued. Under the supervision of the
Board of Trustees, the Advisor determines the liquidity of the Fund's
investments. The absence of a trading market can make it difficult to ascertain
a market value for illiquid investments. Disposing of illiquid securities before
maturity may be time consuming and expensive, and it may be difficult or
impossible for the Fund to sell illiquid investments promptly at an acceptable
price. Included within the category of illiquid securities are restricted
securities, which cannot be resold to the public without registration under the
federal securities laws. Unless registered for sale, these securities can only
be sold in privately negotiated transactions or pursuant to an exemption from
registration.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. The Fund may purchase
when-issued securities and commit to purchase securities for a fixed price at a
future date beyond customary settlement time. The Fund is required to hold and
maintain in a segregated account until the settlement date, cash or liquid
securities in an amount sufficient to meet the purchase price. Purchasing
securities on a when-issued or forward commitment basis involves a risk of loss
if the value of the security to be purchased declines prior to the settlement
date, which risk is in addition to the risk of decline in value of the Fund's
other assets. In addition, no income accrues to the purchaser of when-issued
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<PAGE>
securities during the period prior to issuance. Although the Fund would
generally purchase securities on a when-issued or forward commitment basis with
the intention of acquiring securities for its portfolio, the Fund may dispose of
a when- issued security or forward commitment prior to settlement if the Advisor
deems it appropriate to do so. The Fund may realize short-term gains or losses
upon such sales.
INVESTMENT LIMITATIONS. For the purpose of limiting the Fund's exposure to risk,
the Fund has adopted certain investment limitations. The Fund will not: (1)
issue senior securities, borrow money or pledge its assets, except that it may
borrow from banks as a temporary measure (a) for extraordinary or emergency
purposes, in amounts not exceeding 5% of the Fund's total assets, or (b) in
order to meet redemption requests which might otherwise require untimely
disposition of portfolio securities in amounts not exceeding 15% of its total
assets (the Fund will not make any investment if borrowings exceed 5% of its
total assets); (2) make loans of money or securities, except that the Fund may
invest in repurchase agreements (but repurchase agreements having a maturity of
longer than seven days are subject to the limitation on investing in illiquid
securities); (3) invest more than 10% of its net assets in illiquid securities;
(4) invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of bonds,
guarantors), if more than 5% of its total assets would be invested in such
securities; (5) purchase foreign securities; (6) purchase or sell commodities,
commodities contracts, real estate (including limited partnership interests, but
excluding readily marketable securities secured by real estate or interests
therein, readily marketable interests in real estate investment trusts, or
readily marketable securities issued by companies that invest in real estate or
interests therein) or interests in oil, gas, or other mineral exploration or
development programs or leases (although it may invest in readily marketable
securities of issuers that invest in or sponsor such programs or leases); (7)
invest more than 10% of its total assets in the securities of other investment
companies; (8) write, purchase, or sell call or put straddles, spreads or
combinations thereof, or futures contracts or related options (but the Fund may
write covered call options as described in this Prospectus); and (9) invest more
than 5% of its net assets in warrants. Investment restrictions
(1),(2),(5),(6),(7),(8) and (9) are deemed fundamental, that is, they may not be
changed without shareholder approval. See "Investment Limitations" in the Fund's
Statement of Additional Information for a complete list of investment
limitations.
If the Board of Trustees determines that the Fund's investment objective can
best be achieved by a substantive change in a nonfundamental investment
limitation, the Board can make such change without shareholder approval and will
disclose any such
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<PAGE>
material changes in its Prospectus. Any limitation that is not specified in the
Fund's Prospectus or Statement of Additional Information as being fundamental is
nonfundamental. If a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such percentage resulting from a
change in the value of the Fund's portfolio securities will not constitute a
violation of such limitation.
HOW TO PURCHASE SHARES
Assistance in opening accounts may be obtained from the Administrator by calling
1-800-580-4820, or by writing to the Fund at the address shown below for regular
mail orders. Assistance is also available through any broker-dealer authorized
to sell shares of the Fund. Such broker-dealer may charge you a fee for its
services. Payment for shares purchased may be made through your account at the
broker-dealer processing your application and order to purchase. Your investment
will purchase shares at the public offering price (net asset value plus any
applicable sales charge) next determined after your order is received by the
Fund in proper form as indicated herein. The minimum initial investment in the
Fund is $2,000 ($1,000 for IRAs). The Fund may, in the Advisor's sole
discretion, accept certain accounts with less than the stated minimum initial
investment.
Payment must be made by check or money order drawn on a U.S. bank and payable in
U.S. dollars. All orders received by the Administrator, whether by mail, bank
wire or facsimile order, prior to 4:00 p.m., Eastern time, will purchase shares
at the next determined public offering price on that business day. If your order
is not received by 4:00 p.m., Eastern time, your order will purchase shares at
the public offering price determined on the next business day. Broker-dealers
are responsible for transmitting properly completed orders so that they will be
received by 4:00 p.m., Eastern time.
Under certain circumstances, the Advisor, in its sole discretion, may allow
payment in kind for Fund shares purchased by accepting securities in lieu of
cash. Any securities so accepted would be valued on the date received and
included in the calculation of the net asset value of the Fund. See the
Statement of Additional Information for more information on purchases in kind.
Due to Internal Revenue Service ("IRS") regulations, the Fund is required to,
and will, withhold taxes on all distributions and redemption proceeds without
social security or tax identification numbers, if the number is not delivered to
the Fund within 60 days. If, however, you have already applied for a social
security or tax identification number at the time of completing your account
application, the application should so indicate.
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<PAGE>
Investors should be aware that the Fund's account application contains
provisions in favor of the Fund, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating to
the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by the
Fund or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to the
Mississippi Opportunity Fund, and mail it to:
MISSISSIPPI OPPORTUNITY FUND
C/O SHAREHOLDER SERVICES
P.O. BOX 5354
CINCINNATI, OHIO 45201-5354
BANK WIRE ORDERS. Investments can be made directly by bank wire. To establish a
new account or add to an existing account by wire, please call the Fund, at
1-800-580-4820, before wiring funds, to advise the Fund of the investment, the
dollar amount and the account registration. This will ensure prompt and accurate
handling of your investment. Please have your bank use the following wiring
instructions to purchase by wire:
THE FIFTH THIRD BANK
ABA# 042000314
FOR MAPLEWOOD INVESTMENT TRUST #999-36756
FOR MISSISSIPPI OPPORTUNITY FUND
(SHAREHOLDER NAME AND ACCOUNT NUMBER)
It is important that the wire contain all the information and that the Fund
receive prior telephone notification to ensure proper credit. Once your wire is
sent you should, as soon as possible thereafter, complete and mail your Account
Application to the Fund as described under "Regular Mail Orders," above.
Investors should be aware that some banks may impose a wire service fee.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire at any time
by purchasing shares at the then current public offering price. Before making
additional investments by bank wire, please call the Fund at 1-800-580-4820 to
alert the Fund that your wire is to be sent. Follow the wire instructions above
to send your wire. When calling for any reason, please have your account number
ready, if known. Mail orders should include, when
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<PAGE>
possible, the "Invest by Mail" stub which is attached to your Fund confirmation
statement. Otherwise, be sure to identify your account in your letter.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders to
make regular monthly or bimonthly investments in shares through automatic
charges to their checking account. With shareholder authorization and bank
approval, the Administrator will automatically charge the checking account for
the amount specified ($50 minimum), which will be automatically invested in
shares at the applicable public offering price on or about the fifteenth day
and/or the last business day of the month. A shareholder may change the amount
of the investment or discontinue the plan at any time by writing to the
Administrator.
STOCK CERTIFICATES. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
SALES CHARGES ON PURCHASES OF SHARES
Shares of the Fund are purchased at the public offering price. The public
offering price is the next determined net asset value per share plus a sales
charge as shown in the following table. The Distributor receives the sales
charge and may reallow it in the form of dealer discounts as follows:
Sales Sales Dealer
Charge As Charge As Reallowance as
% of Public % of Net % of Public
Offering Amount Offering
Amount of Investment Price Invested Price
- -------------------- --------- ---------- -------------
Less than $100,000 3.50% 3.63% 3.00%
$100,000 but less than $250,000 3.00% 3.09% 2.50%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 or more None None None
At times the Distributor may reallow the entire sales charge to dealers. From
time to time dealers who receive dealer discounts from the Distributor may
reallow all or a portion of such dealer discounts to other dealers or brokers.
The dealer discounts shown above apply to all dealers who have agreements with
the Distributor.
REDUCED SALES CHARGES. A shareholder may purchase shares at a reduced sales
charge or without a sales charge by purchasing shares through one of the methods
described below.
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<PAGE>
RIGHT OF ACCUMULATION. Pursuant to the right of accumulation, shareholders are
permitted to purchase shares at the public offering price applicable to the
total of (a) the total public offering price of the shares of the Fund then
being purchased plus (b) an amount equal to the then current net asset value of
the purchaser's current holdings of Fund shares. To receive the applicable
public offering price pursuant to the right of accumulation, a shareholder must,
at the time of purchase, provide sufficient information to permit confirmation
of qualification. The right of accumulation may be modified or eliminated at any
time or from time to time by the Fund without notice.
LETTERS OF INTENT. Shareholders may qualify for a lower sales charge by
executing a letter of intent. A letter of intent allows an investor to purchase
shares of the Fund over a 13 month period at reduced sales charges based on the
total amount intended to be purchased plus an amount equal to the then current
net asset value of the purchaser's current holdings of Fund shares. Thus, a
letter of intent permits an investor to establish a total investment goal to be
achieved by any number of purchases over a 13 month period. Each investment made
during the period receives the reduced sales charge applicable to the total
amount of the intended investment.
The letter of intent does not obligate the shareholder to purchase, or the Fund
to sell, the indicated amount. If such amount is not invested within the period,
the shareholder must pay the difference between the sales charge applicable to
the purchases made and the charges previously paid. If such difference is not
paid by the shareholder, the Administrator is authorized by the shareholder to
liquidate a sufficient number of shares held by the shareholder to pay the
amount due. On the initial purchase of shares, if required (or subsequent
purchases, if necessary), shares equal to at least 5% of the amount indicated in
the letter of intent will be held in escrow during the 13 month period (while
remaining registered in the name of the shareholder) for this purpose. The value
of any shares redeemed or otherwise disposed of by the shareholder prior to
termination or completion of the letter of intent will be deducted from the
total purchases made under such letter of intent.
A 90-day backdating period can be used to include earlier purchases at the
shareholder's cost (without a retroactive downward adjustment of the sales
charge). The 13 month period would then begin on the date of the first purchase
during the 90- day period. No retroactive adjustment will be made if purchases
exceed the amount indicated in the letter of intent. Shareholders must notify
the Administrator whenever a purchase is being made pursuant to a letter of
intent.
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<PAGE>
Shareholders electing to purchase shares pursuant to a letter of intent should
carefully read the letter of intent, which is included in the Application
contained in this Prospectus or is otherwise available from the Administrator.
The letter of intent option may be modified or eliminated at any time or from
time to time by the Fund without notice.
REINVESTMENT. Shareholders may reinvest proceeds from a redemption of shares,
without a sales charge, in shares of the Fund. The amount that may be so
reinvested may not exceed the amount of the redemption proceeds, and a written
order for the purchase of such shares must be received by the Administrator
within 90 days after the effective date of the redemption.
If a shareholder realizes a gain on the redemption, the reinvestment will not
affect the amount of any federal capital gains tax payable on the gain. If a
shareholder realizes a loss on the redemption, the reinvestment may cause some
or all of the loss to be disallowed as a tax deduction, depending on the number
of shares purchased by reinvestment and the period of time that has elapsed
after the redemption, although for tax purposes the amount disallowed is added
to the cost of the shares acquired upon the reinvestment.
PURCHASES BY RELATED PARTIES AND GROUPS. Reductions in sales charges apply to
purchases by a single "person," including an individual, members of a family
unit, consisting of a husband, wife and children under the age of 21 purchasing
securities for their own account, or a trustee or other fiduciary purchasing for
a single fiduciary account or single trust estate.
Reductions in sales charges also apply to purchases by individual members of a
"qualified group." The reductions are based on the aggregate dollar value of
shares purchased by all members of the qualified group and still owned by the
group plus the shares currently being purchased. For purposes of this paragraph,
a qualified group consists of a "company," as defined in the 1940 Act, which has
been in existence for more than six months and which has a primary purpose other
than acquiring shares of the Fund at a reduced sales charge, and the "related
parties" of such company. For purposes of this paragraph, a "related party" of a
company is: (i) any individual or other company that directly or indirectly
owns, controls, or has the power to vote 5% or more of the outstanding voting
securities of such company; (ii) any other company of which such company
directly or indirectly owns, controls, or has the power to vote 5% or more of
its outstanding voting securities; (iii) any other company under common control
with such company; (iv) any executive officer, director or partner of such
company or of a related party; and (v) any partnership of which such company is
a partner.
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<PAGE>
PURCHASES AT NET ASSET VALUE. Shares of the Fund may be purchased at a price
equal to the net asset value of such shares, without a sales charge, by
Trustees, officers, and employees of the Trust and the Advisor, and by employees
and principals of related organizations and their families, and certain parties
related thereto, including clients and related accounts of the Advisor.
An investor may purchase shares of the Fund at net asset value when the payment
for the investment represents the proceeds form the redemption of shares of any
other mutual fund which has a front-end sales load and is not distributed by the
Distributor. The investment will qualify for this provision if the purchase
price of the shares of the other fund included a sales charge and the redemption
occurred within one year of the purchase of such shares and no more than sixty
days prior to the purchase of shares of the Fund. To make a purchase at net
asset value pursuant to this provision, the investor must submit photocopies of
the confirmations (or similar evidence) showing the purchase and redemption of
shares of the other fund. Payment may be made with the redemption check
representing the proceeds of the shares redeemed, endorsed to the order of the
Fund. The redemption of shares of the other fund is, for federal income tax
purposes, a sale on which an investor may realize a gain or loss. These
provisions may be modified or terminated at any time. Contact your securities
dealer or the Distributor for further information.
Banks, bank trust departments and savings and loan associations, in their
fiduciary capacity or for their own accounts, may also purchase shares of the
Fund at net asset value. To the extent permitted by regulatory authorities, a
bank trust department may charge fees to clients for whose account it purchases
shares at net asset value. Federal and state credit unions may also purchase
shares at net asset value.
In addition, shares of the Fund may be purchased at net asset value by
broker-dealers who have a sales agreement with the Distributor, and their
registered personnel and employees, including members of the immediate families
of such registered personnel and employees.
Clients of investment advisors and financial planners may also purchase shares
of the Fund at net asset value if the investment advisor or financial planner
has made arrangement to permit them to do so with the Fund and the Distributor.
The investment advisor or financial planner must notify the Administrator that
an investment qualifies as a purchase at net asset value.
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<PAGE>
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed on each day that the Fund is open for
business. The Fund is open for business on each day the New York Stock Exchange
(the "Exchange") is open for business. Any redemption may be for more or less
than the purchase price of your shares depending on the market value of the
Fund's portfolio securities. All redemption orders received in proper form, as
indicated herein, by the Administrator prior to 4:00 p.m., Eastern time, will
redeem shares at the net asset value determined as of that business day's close
of trading. Otherwise, your order will redeem shares on the next business day.
There is no charge for redemptions from the Fund. You may also redeem your
shares through a broker-dealer or other institution which may charge you a fee
for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $2,000 (due to redemptions, exchanges or
transfers, but not due to market action) upon 30 days' written notice. If the
shareholder brings his account value up to $2,000 or more during the notice
period, the account will not be redeemed. Redemptions from retirement plans may
be subject to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Fund, at 1-800-580-4820, or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to the Mississippi
Opportunity Fund, P.O. Box 5354, Cincinnati, Ohio 45201-5354. Your request for
redemption must include:
1) your letter of instruction specifying the account number and the number
of shares or dollar amount to be redeemed. This request must be signed
by all registered shareholders in the exact names in which they are
registered;
2) any required signature guarantees (see "Signature
Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships,
pension or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days after
receipt of your redemption request. However, the Fund may delay forwarding a
redemption check for recently purchased shares while it determines whether the
purchase payment will be honored. Such delay (which may take up to 15 days) may
be reduced or avoided if the purchase is made by wire transfer. In such cases,
the net asset value next determined after receipt of the request for redemption
will be used in processing the
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<PAGE>
redemption and your redemption proceeds will be mailed to you upon clearance of
your check to purchase shares. The Fund may suspend redemption privileges or
postpone the date of payment (i) during any period that the Exchange is closed,
or trading on the Exchange is restricted as determined by the Securities and
Exchange Commission (the "Commission"), (ii) during any period when an emergency
exists as defined by the rules of the Commission as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned by it, or to
fairly determine the value of its assets, and (iii) for such other periods as
the Commission may permit.
TELEPHONE AND BANK WIRE REDEMPTIONS. The Fund offers shareholders the option of
redeeming shares by telephone under certain limited conditions. You may redeem
shares, subject to the procedures outlined below, by calling the Fund at
1-800-580- 4820. The Fund will redeem shares when requested by telephone if, and
only if, the shareholder confirms redemption instructions in writing. The Fund
may rely upon confirmation of redemption requests transmitted via facsimile (FAX
# 513-629-2901). The confirmation instructions must include:
1) Shareholder name and account number;
2) Number of shares or dollar amount to be redeemed;
3) Instructions for transmittal of redemption funds to the shareholder;
4) Shareholder signature as it appears on the application then on file
with the Fund; and
5) Any required signature guarantees (see "Signature Guarantees").
In such cases, the net asset value used in processing the redemption will be the
net asset value next determined after the telephone request is received.
Redemption proceeds will not be remitted until written confirmation of the
redemption request is received. You can choose to have redemption proceeds
mailed to you at your address of record, your bank, or to any other authorized
person, or you can have the proceeds sent by bank wire to your bank ($1,000
minimum). Shares of the Fund may not be redeemed by wire on days in which your
bank is not open for business. Redemption proceeds will only be sent to the bank
account or person named in your Account Application currently on file with the
Fund. You can change your redemption instructions anytime you wish by filing a
letter with the Fund including your new redemption instructions. (See "Signature
Guarantees.")
The Fund reserves the right to restrict or cancel telephone redemption
privileges for any or all shareholders, without notice, if the Trustees believe
it to be in the best interest of the shareholders to do so. During drastic
economic and market changes, telephone redemption privileges may be difficult to
implement.
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<PAGE>
Neither the Fund, the Administrator, nor their respective affiliates will be
liable for complying with telephone instructions they reasonably believe to be
genuine or for any loss, damage, cost or expense in acting on such telephone
instructions. The affected shareholders will bear the risk of any such loss. The
Fund or the Administrator, or both, will employ reasonable procedures to
determine that telephone instructions are genuine. If the Fund or the
Administrator do not employ such procedures, they may be liable for losses due
to unauthorized or fraudulent instructions. These procedures may include, among
others, requiring forms of personal identification prior to acting upon
telephone instructions, providing written confirmation of the transactions
and/or tape recording telephone instructions.
There is currently no charge by the Administrator for wire redemptions. However,
the Administrator reserves the right, upon thirty days' written notice, to make
reasonable charges for wire redemptions. All charges will be deducted from your
account by redemption of shares in your account. Your bank or brokerage firm may
also impose a charge for processing the wire. In the event that wire transfer of
funds is impossible or impractical, the redemption proceeds will be sent by mail
to the designated account.
SYSTEMATIC WITHDRAWAL PLAN. A shareholder who owns shares of the Fund valued at
$5,000 or more at the current net asset value may establish a Systematic
Withdrawal Plan to receive a monthly or quarterly check in a stated amount of
not less than $50. Each month or quarter, as specified, the Fund will
automatically redeem sufficient shares from your account to meet the specified
withdrawal amount. A shareholder may establish this service whether dividends
and distributions are reinvested or paid in cash. Systematic withdrawals may be
deposited directly to the shareholders' bank account by completing the
applicable section on the Account Application form accompanying this Prospectus,
or by calling or writing the Fund. See the Statement of Additional Information
for further details.
SIGNATURE GUARANTEES. To protect your account and the Fund from fraud, signature
guarantees are required to be sure that you are the person who has authorized a
change in registration, or standing instructions, for your account. Signature
guarantees are required for (1) change of registration requests, and (2)
requests to establish or change redemption services other than through your
initial account application, and (3) requests for redemptions in excess of
$25,000. Signature guarantees are acceptable from a member bank of the Federal
Reserve System, a savings and loan institution, credit union, registered
broker-dealer or a member firm of a U.S. Stock Exchange, and must appear on the
written request for redemption or change of registration.
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<PAGE>
HOW SHARES ARE VALUED
The public offering price (net asset value plus applicable sales charge) of
shares of the Fund is determined on each business day that the Exchange is open
for trading, as of the close of the Exchange (currently 4:00 p.m., Eastern
time). Net asset value per share is determined by dividing the total value of
all Fund securities (valued at market value) and other assets, less liabilities,
by the total number of shares then outstanding. Net asset value includes
interest on fixed-income securities, which is accrued daily.
Securities which are traded over-the-counter are priced at the last sale price,
if available, otherwise, at the last quoted bid price. Securities traded on a
securities exchange are valued based upon the closing price on the valuation
date on the principal exchange where the security is traded. Securities that are
listed on an exchange and which are not traded on the valuation date are valued
at the bid price. Securities in which market quotations are not readily
available may be valued on the basis of prices provided by an independent
pricing service, when such prices are believed to reflect the fair market value
of such securities. Securities and other assets for which no quotations are
readily available will be valued in good faith at fair value using methods
determined by the Board of Trustees.
MANAGEMENT OF THE FUND
The Fund is a non-diversified series of Maplewood Investment Trust, a series
company, (the "Trust"), an investment company organized as a Massachusetts
business trust in 1992, which was formerly known as The Nottingham Investment
Trust. The Board of Trustees has overall responsibility for management of the
Fund under the laws of Massachusetts governing the responsibilities of Trustees
of business trusts. The Statement of Additional Information identifies the
Trustees and officers of the Trust and provides information about them.
INVESTMENT ADVISOR. Subject to the authority of the Board of Trustees, Vector
Money Management, Inc. (the "Advisor") provides the Fund with a continuous
program of supervision of the Fund's assets, including the composition of its
portfolio, and furnishes advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities, pursuant to an
Investment Advisory Agreement with the Trust. The Advisor is also responsible
for the selection of broker-dealers through which the Fund executes portfolio
transactions, subject to brokerage policies established by the Trustees.
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<PAGE>
The controlling shareholder and President of the Advisor is Ashby M. Foote III.
The Advisor currently serves as investment manager to over $100 million in
assets. The Advisor has been rendering investment counsel, utilizing investment
strategies substantially similar to those of the Fund, to individuals, pension
and profit sharing plans, trusts, estates, charitable organizations and
corporations since its inception in 1988. The Advisor's address is 4266 I-55
North, Suite 102, Jackson, Mississippi 39211.
Ashby M. Foote III is primarily responsible for managing the portfolio of the
Fund and has acted in this capacity since the Fund's inception.
Under the Investment Advisory Agreement with the Trust, the Advisor receives a
monthly management fee equal to an annual rate of .875% of the average daily net
assets of the Fund. The Advisor currently intends to waive its investment
advisory fee and reimburse expenses to the extent necessary to limit total
operating expenses (exclusive of interest, taxes, brokerage commissions, sales
charges and extraordinary expenses) to 2.125% per annum of the Fund's average
daily net assets. However, there is no assurance that any voluntary fee waivers
and expense reimbursements will continue in the current or future fiscal years,
and expenses may therefore exceed 2.125% of the Fund's average daily net assets.
ADMINISTRATOR. The Fund has retained Countrywide Fund Services, Inc., P.O. Box
5354, Cincinnati, Ohio 45201, to serve as its transfer agent, dividend paying
agent and shareholder service agent. The Administrator is an indirect
wholly-owned subsidiary of Countrywide Credit Industries, Inc., a New York Stock
Exchange listed company principally engaged in the business of residential
mortgage lending.
In addition, the Administrator has been retained to provide administrative
services to the Fund. In this capacity, the Administrator supplies executive,
administrative and regulatory services, supervises the preparation of tax
returns, and coordinates the preparation of reports to shareholders and reports
to and filings with the Commission and state securities authorities. The Fund
pays the Administrator a fee for these administrative services at the annual
rate of .15% of the average value of its daily net assets up to $50 million,
.125% of the next $50 million of such assets and .1% of such assets in excess of
$100 million, subject to a $1,000 minimum monthly fee.
The Administrator also provides accounting and pricing services to the Fund. The
Administrator receives a monthly fee of $2,000 for calculating daily net asset
value per share and maintaining such books and records as are necessary to
enable it to perform its duties. The Administrator also charges the Fund for
certain costs involved with the daily valuation of investment securities and is
reimbursed for out-of-pocket expenses.
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<PAGE>
CUSTODIAN. The Custodian of the Fund's assets is Trustmark National Bank. The
Custodian's mailing address is P.O. Box 291, Jackson, Mississippi 39205. The
Custodian acts as the depository for the Fund, safekeeps its portfolio
securities, collects all income, disperses monies at the Fund's request and
maintains records in connection with its duties.
OTHER EXPENSES. The Fund is responsible for the payment of all of its operating
expenses. These include the fees payable to the Advisor, or expenses otherwise
incurred in connection with the management of the investment of the Fund's
assets, the fees and expenses of the Custodian, the fees and expenses of the
Administrator, the fees and expenses of Trustees, outside auditing and legal
expenses, all taxes and corporate fees payable by the Fund, registration fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to shareholders, costs
of shareholder reports and shareholder meetings, and any extraordinary expenses.
The Fund also pays for brokerage commissions and transfer taxes (if any) in
connection with the purchase and sale of portfolio securities.
BROKERAGE. In selecting broker-dealers through which to execute brokerage
transactions for the Fund, the Advisor attempts to obtain the best execution for
all such transactions. If it is believed that more than one broker is able to
provide the best execution, the Advisor will consider the receipt of quotations
and other market services, receipt of research, statistical and other data and
the sale of shares of the Fund in selecting a broker. Research services obtained
through the Fund's brokerage transactions may be used by the Advisor for its
other clients; conversely, the Fund may benefit from research services obtained
through the brokerage transactions of the Advisor's other clients. The Advisor
may also utilize a brokerage firm affiliated with the Trust or the Advisor if it
believes it can obtain the best execution of transactions from such broker. The
Statement of Additional Information contains more information about the
management and brokerage practices of the Fund.
DISTRIBUTOR AND DISTRIBUTION PLAN
CW Fund Distributors, Inc., 312 Walnut Street, Cincinnati, Ohio 45202 (the
"Distributor"), is the national distributor for the Fund pursuant to an
Underwriting Agreement with the Trust. The Distributor may sell Fund shares to
or through qualified securities dealers or others. The Distributor is an
indirect wholly-owned subsidiary of Countrywide Credit Industries, Inc., a New
York Stock Exchange listed company principally engaged in the business of
residential mortgage lending. Certain officers of the Distributor also serve as
officers of the Trust.
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<PAGE>
The Trust has adopted a Distribution Plan for shares of the Fund (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund may
reimburse any expenditures to finance any activity primarily intended to result
in the sale of shares of the Fund or the servicing of shareholder accounts,
including, but not limited to, the following: (i) payments to the Distributor,
securities dealers, and others for the sale of shares of the Fund; (ii) payment
of compensation to and expenses of personnel who engage in or support
distribution of shares of the Fund or who render shareholder support services
not otherwise provided by the Administrator or Custodian; and (iii) expenses of
formulating and implementing marketing and promotional activities. The
categories of expenses for which reimbursement is made are approved by the Board
of Trustees of the Trust. Expenditures by the Fund pursuant to the Plan are
accrued based on average daily net assets and may not exceed .50% of the Fund's
average net assets for each year elapsed subsequent to the adoption of the Plan.
In addition to the payments by the Fund pursuant to the Plan for distribution
fees, dealers and other service organizations may charge their clients
additional fees for account services. Customers who are beneficial owners of
shares of the Fund should read this Prospectus in light of the terms and fees
governing their accounts with dealers or other service organizations.
The National Association of Securities Dealers has placed certain limitations on
asset-based sales charges of mutual funds. These limitations require fund-level
accounting in which all sales charges - front-end charge, 12b-1 fees or
contingent deferred charge - terminate when a percentage of gross sales is
reached. Expenditures paid as shareholder servicing fees under the Plan which
are limited to .25% of the Fund's average daily net assets are not included in
the limit. If in any month the Distributor expends more monies than are
immediately payable under the Plan because of the percentage limitations
described above (or, due to any expense limitation imposed on the Fund, monies
otherwise payable by the Fund to the Distributor under the Plan are rendered
uncollectible), the unpaid expenditures may be "carried forward" from month to
month until such time, if ever, as they may be paid. In addition, payments to
service organizations (which may include the Distributor, the Advisor, and their
affiliates) are not tied directly to the organizations' own out-of-pocket
expenses and therefore may be used as they elect (including, for example, to
defray their overhead expenses).
Amounts accrued by the Fund under the Plan in one year but which are not
actually paid in that year, may be paid in subsequent years. Amounts not accrued
by the Fund under the Plan during a year may not be carried forward to
subsequent years. The Plan may not be amended to increase materially the amount
to be spent
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<PAGE>
under the Plan without shareholder approval. The continuation of the Plan must
be approved annually by the Board of Trustees. At least quarterly the Board of
Trustees will review a written report of amounts expended pursuant to the Plan
and the purposes for which such expenditures were made.
For the fiscal year ended February 28, 1998, the Fund incurred $19,599 of
distribution expenses.
DIVIDENDS, DISTRIBUTIONS, TAXES
AND OTHER INFORMATION
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Fund in general and,
particularly, with respect to dividends and distributions and other matters. The
discussion herein of the federal income tax consequences of an investment in the
Fund is not exhaustive on the subject. Consequently, investors should seek
qualified tax advice.
The Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Fund but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed to
them. The Fund intends to declare dividends, if any, annually and will
distribute any net short-term or long-term capital gains derived from the sale
of securities at the end of its fiscal year. In addition, the Fund may make a
supplemental distribution of capital gains annually in December. The nature and
amount of all dividends and distributions will be identified separately when tax
information is distributed by the Fund at the end of each year. The Fund intends
to withhold 30% on taxable dividends and any other payments that are subject to
such withholding and are made to persons who are neither citizens nor residents
of the U.S.
There is no fixed dividend rate, and there can be no assurance as to the payment
of any dividends or the realization of any gains. All dividends and capital
gains distributions are reinvested in additional shares of the Fund unless the
shareholder requests in writing to receive dividends and/or capital gains
distributions in cash. That request must be received by the Fund prior to the
record date to be effective as to the next dividend. Tax consequences to
shareholders of dividends and distributions are the same if received in cash or
if received in additional shares of the Fund.
- 25 -
<PAGE>
TAX STATUS OF THE FUND. If the Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to qualify.
For a more detailed discussion of the tax status of the Fund, see "Additional
Tax Information" in the Statement of Additional Information.
DESCRIPTION OF SHARES. The Trust was organized as a Massachusetts business trust
on August 12, 1992 under a Declaration of Trust. The Declaration of Trust
permits the Board of Trustees to issue an unlimited number of full and
fractional shares and to create additional series, or funds, at any time.
When issued, the shares of the Fund, will be fully paid, nonassessable and
redeemable. The Trust does not intend to hold annual shareholder meetings; it
may, however, hold special shareholder meetings for purposes such as changing
fundamental policies or electing Trustees. The Board of Trustees shall promptly
call a meeting for the purpose of electing or removing Trustees when requested
in writing to do so by the record holders of at least 10% of the outstanding
shares of the Trust. The term of office of each Trustee is of unlimited
duration. The holders of at least two-thirds of the outstanding shares of the
Trust may remove a Trustee from that position either by declaration in writing
filed with the Custodian or by votes cast in person or by proxy at a meeting
called for that purpose.
Shareholders of the Trust will vote in the aggregate and not by series (fund),
except as otherwise required by the 1940 Act or when the Board of Trustees
determines that the matter to be voted on affects only the interests of the
shareholders of a particular series. Matters affecting an individual series,
such as the Fund, include, but are not limited to, the investment objectives,
policies and restrictions of that series. Shares have no subscription,
preemptive or conversion rights. Share certificates will not be issued. Each
share is entitled to one vote (and fractional shares are entitled to
proportionate fractional votes) on all matters submitted for a vote, and shares
have equal voting rights except that only shares of a particular series are
entitled to vote on matters affecting only that series. Shares do not have
cumulative voting rights. Therefore, the holders of more than 50% of the
aggregate number of shares of all series of the Trust may elect all the
Trustees.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See "Description of the Trust" in the
Statement of Additional Information for further information about the Trust and
its shares.
-26-
<PAGE>
REPORTING TO SHAREHOLDERS. The Fund will send to its shareholders annual reports
which have been audited by the Trust's independent accountants and semiannual
reports which are unaudited. In addition, the Administrator will send to each
shareholder having an account directly with the Fund a quarterly statement
showing transactions in the account, the total number of shares owned and any
dividends or distributions paid.
CALCULATION OF PERFORMANCE DATA. From time to time the Fund may advertise its
total return. The Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate future
performance.
The "total return" of the Fund refers to the average annual compounded rates of
return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of all
dividends and distributions, includes all recurring fees that are charged to all
shareholder accounts and deducts all nonrecurring charges at the end of each
period. The calculation further assumes the deduction of the current maximum
sales load from the initial investment. If the Fund has been operating less than
1, 5 or 10 years, the time period during which the Fund has been operating is
substituted.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same or
different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative rate of return, actual
year-by-year rates or any combination thereof. Cumulative total return
represents the cumulative change in value of an investment in the Fund for
various periods.
The "yield" of the Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses of
the Fund all recurring fees that are charged to all shareholder accounts and any
nonrecurring charges for the period stated.
- 27 -
<PAGE>
THE MISSISSIPPI OPPORTUNITY FUND
INVESTMENT ADVISOR
Vector Money Management, Inc.
4266 I-55 North, Suite 102
Jackson, Mississippi 39211
(601) 981-1773
ADMINISTRATOR
Countrywide Fund Services, Inc.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-580-4820
DISTRIBUTOR
CW Fund Distributors, Inc.
312 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
201 East Fifth Street
Cincinnati, Ohio 45202
BOARD OF TRUSTEES
Jack E. Brinson
David S. Brollier
O. James Peterson III
Christopher J. Smith
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell
shares in any State to any person to whom it is unlawful for the Fund to make
such offer in such State.
- 28 -
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
ACCOUNT APPLICATION
Please mail account application to:
Mississippi Opportunity Fund
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
ACCOUNT NO.W8-____________________
(For Fund Use Only)
FOR BROKER/DEALER USE ONLY
Firm Name:_______________________
Home Office Address:_____________
Branch Address:__________________
Rep Name & No.:__________________
Rep Signature:___________________
- ----------------------------------------------------------------------------
Initial Investment of $____________ ($2,000 minimum, $1,000 minimum for IRAs)
o Check or draft enclosed payable to the Mississippi Opportunity Fund.
o Bank Wire From:___________________________________________________
ACCOUNT NAME S.S. #/TAX I.D.#
_____________________________________ ____________________________
Name of Individual, Corporation, (In case of custodial account
Organization, or Minor, etc. please list minor's S.S.#)
_____________________________________ Citizenship: o U.S.
Name of Joint Tenant, Partner, Custodian o Other________
ADDRESS PHONE
_____________________________________ ( )_____________________
Street or P.O. Box Business Phone
_____________________________________ ( )_____________________
City State Zip Home Phone
Check Appropriate Box: o Individual o Joint Tenant (Right of survivorship
presumed) o Partnership o Corporation o Trust o Custodial o Non-Profit
o Other
Occupation and Employer Name/Address____________________________________
Are you an associated person of an NASD member? o Yes o No
- ----------------------------------------------------------------------------
TAXPAYER IDENTIFICATION NUMBER -- Under penalties of perjury I certify that
the Taxpayer Identification Number listed above is my correct number. The
Internal Revenue Service does not require my consent to any provision of this
document other than the certifications required to avoid backup withholding.
Check box if appropriate:
<PAGE>
o I am exempt from backup withholding under the provisions of section
3406(a)(1)(c) of the Internal Revenue Code; or I am not subject to backup
withholding because I have not been notified that I am subject to backup
withholding as a result of a failure to report all interest or dividends;
or the Internal Revenue Service has notified me that I am no longer subject
to backup withholding.
o I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me and I have mailed or delivered an application to
receive a Taxpayer Identification Number to the Internal Revenue Service
Center or Social Security Administration Office. I understand that if I do
not provide a Taxpayer Identification Number within 60 days that 31% of all
reportable payments will be withheld until I provide a number.
DISTRIBUTIONS (If no election is checked the SHARE OPTION will be assigned.)
o Share Option -- Income distributions and capital gains distributions
automatically reinvested in additional shares.
o Income Option -- Income distributions and short term capital gains
distributions paid in cash, long term capital gains distributions
reinvested in additional shares.
o Cash Option -- Income distributions and capital gains distributions paid
in cash.
- ---------------------------------------------------------------------------
REDUCED SALES CHARGES
Right of Accumulation: I apply for Right of Accumulation subject to the
Agent's confirmation of the following holdings of the Mississippi Opportunity
Fund.
ACCOUNT NUMBER/NAME ACCOUNT NUMBER/NAME
______________________________________ _________________________________
______________________________________ _________________________________
LETTER OF INTENT: (Complete the Right of Accumulation section if related
accounts are being applied to your Letter of Intent.)
o I agree to the Letter of Intent in the current Prospectus of the Mississippi
Opportunity Fund. Although I am not obligated to purchase, and
the Fund is not obligated to sell, I intend to invest over a 13 month period
beginning ______________________ 19 _______ (Purchase Date of not more than
90 days prior to this Letter) an aggregate amount in the Fund at least equal
to (check appropriate box):
o $100,000 o $250,000 o $500,000
- ---------------------------------------------------------------------------
<PAGE>
SIGNATURES
By signature below each investor certifies that he has received a copy of the
Fund's current Prospectus, that he is of legal age, and that he has full
authority and legal capacity for himself or the organization named below, to
make this investment and to use the options selected above. The investor
appoints Countrywide Fund Services, Inc. as his agent to enter orders for
shares whether by direct purchase or exchange, to receive dividends and
distributions for automatic reinvestment in additional shares of the Fund
for credit to the investor's account and to surrender for redemption shares
held in the investor's account in accordance with any of the procedures elected
above or for payment of service charges incurred by the investor. The investor
further agrees that Countrywide Fund Services, Inc. can cease to act as such
agent upon ten days' notice in writing to the investor at the address contained
in this Application. The investor hereby ratifies any instructions given
pursuant to this Application and for himself and his successors and assigns does
hereby release Countrywide Fund Services, Inc., the Mississippi Opportunity
Fund, CW Fund Distributors, Inc., and their respective officers, employees,
agents and affiliates from any and all liability in the performance of the acts
instructed herein. Neither the Fund, Countrywide Fund Services, Inc., nor
their respective affiliates will be liable for complying with telephone
instructions they reasonably believe to be genuine or for any loss, damage,
cost or expense in acting on such telephone instructions. The investor(s)
will bear the risk of any such loss. The Fund or Countrywide Fund Services,
Inc., or both, will employ reasonable procedures to determine that telephone
instructions are genuine. If the Trust and/or Countrywide Fund Services, Inc.
do not employ such procedures, they may be liable for losses due to
unauthorized or fraudulent instructions. These procedures may include,
among others, requiring forms of personal identification prior to acting
upon telephone instructions, providing written confirmation of the
transactions and/or tape recording telephone instructions.
_______________________________________________________________
Signature of Individual Owner, Corporate Officer, Trustee, etc.
_______________________________________________________________
Signature of Joint Owner, if Any
_______________________________________________________________
Title of Corporate Officer, Trustee, etc.
_______________________________________________________________
Date
NOTE: CORPORATIONS, TRUSTS AND OTHER ORGANIZATIONS MUST COMPLETE THE
RESOLUTION FORM ON THE REVERSE SIDE.
UNLESS OTHERWISE SPECIFIED, EACH JOINT OWNER SHALL HAVE FULL AUTHORITY TO ACT
ON BEHALF OF THE ACCOUNT.
- ---------------------------------------------------------------------------
AUTOMATIC INVESTMENT PLAN (COMPLETE FOR INVESTMENTS INTO THE FUND)
The Automatic Investment Plan is available for all established accounts of
the Mississippi Opportunity Fund. There is no charge for this service,
and it offers the convenience of automatic investing on a regular basis.
The minimum investment is $50.00 per month. For an account that is opened by
using this Plan, the minimum initial and subsequent investments must be $50.00.
Though a continuous program of 12 monthly investments is recommended, the Plan
may be discontinued by the shareholder at any time.
<PAGE>
Please invest $_____________ per month in the Mississippi Opportunity Fund.
ABA Routing Number_____________________
FI Account Number______________________
o Checking Account o Savings Account
_______________________________________
Name of Financial Institution (FI)
_______________________________________
City State
X______________________________________ X_________________________________
(Signature of Depositor EXACTLY as (Signature of Joint Tenant -
it appears on FI Records) if any)
(Joint Signatures are required when bank account is in joint names. Please
sign exactly as signature appears on your FI's records.)
PLEASE ATTACH A VOIDED CHECK FROM YOUR CHECKING ACCOUNT OR A VOIDED DEPOSIT/
WITHDRAWAL SLIP FROM YOUR SAVINGS ACCOUNT FOR THE AUTOMATIC INVESTMENT PLAN.
Please make my automatic investment on:
o the last business day of each month
o the 15th day of each month
o both the 15th and last business day
INDEMNIFICATION TO DEPOSITOR'S BANK
In consideration of your participation in a plan which Countrywide Fund
Services, Inc. ("CFS") has put into effect, by which amounts, determined by your
depositor, payable to the Mississippi Opportunity Fund, for purchase of
shares of said Fund, are collected by CFS, CFS hereby agrees:
CFS will indemnify and hold you harmless from any liability to any person
or persons whatsoever arising out of the payment by you of any amount drawn
by the Fund to its own order on the account of your depositor or from
any liability to any person whatsoever arising out of the dishonor
by you whether with or without cause or intentionally or inadvertently,
of any such checks. CFS will defend, at its own cost and expense,
any action which might be brought against you by any person or persons
whatsoever because of your actions taken pursuant to the foregoing
request or in any manner arising by reason of your participation in this
arrangement. CFS will refund to you any amount erroneously paid by you
to the Fund on any such check if the claim for the amount of such erroneous
payment is made by you within six (6) months from the date of such erroneous
payment; your participation in this arrangement and that of the Fund may be
terminated by thirty (30) days written notice from either party to the other.
- - ---------------------------------------------------------------------------
AUTOMATIC WITHDRAWAL PLAN (COMPLETE FOR WITHDRAWALS FROM THE FUND)
This is an authorization for you to withdraw $_________________________from
my mutual fund account beginning the last business day of the month of
_____________________.
Please Indicate Withdrawal Schedule (Check One):
o MONTHLY -- Withdrawals will be made on the last business day of each month.
o QUARTERLY -- Withdrawals will be made on or about 3/31, 6/30, 9/30 and
12/31.
o ANNUALLY -- Please make withdrawals on the last business day of the month
of:___________________________.
<PAGE>
Please Select Payment Method (Check One):
o CHECK: Please mail a check for my withdrawal proceeds to the mailing
address on this account.
o ACH TRANSFER: Please send my withdrawal proceeds via ACH transfer to my
bank checking or savings account as indicated below. I understand that the
transfer will be completed in two to three business days and that there is
no charge.
o BANK WIRE: Please send my withdrawal proceeds via bank wire, to the
account indicated below. I understand that the wire will be completed in one
business day and that there is an $8.00 fee.
PLEASE ATTACH A VOIDED CHECK FOR ACH OR BANK WIRE
___________________________________________________________________________
Bank Name Bank Address
___________________________________________________________________________
Bank ABA# Account # Account Name
O SEND TO SPECIAL PAYEE (OTHER THAN APPLICANT): Please mail a check for my
withdrawal proceeds to the mailing address below:
Name of payee_____________________________________________________________
Please send to:___________________________________________________________
Street address City State Zip
- - ---------------------------------------------------------------------------
RESOLUTIONS
(This Section to be completed by Corporations, Trusts, and Other
Organizations)
RESOLVED: That this corporation or organization become a shareholder of the
Mississippi Opportunity Fund (the Fund) and that
__________________________________________________________________________
is (are) hereby authorized to complete and execute the Application on behalf
of the corporation or organization and to take any action for it as may be
necessary or appropriate with respect to its shareholder account with the
Fund, and it is
FURTHER RESOLVED: That any one of the above noted officers is authorized to
sign any documents necessary or appropriate to appoint Countrywide Fund
Services, Inc. as redemption agent of the corporation or organization for
shares of the Fund, to establish or acknowledge terms and conditions governing
the redemption of said shares and to otherwise implement the privileges elected
on the Application.
<PAGE>
CERTIFICATE
I hereby certify that the foregoing resolutions are in conformity with the
Charter and By-Laws or other empowering documents of the
__________________________________________________________________________
(Name of Organization)
incorporated or formed under the laws of___________________________
(State)
and were adopted at a meeting of the Board of Directors or Trustees of the
organization or corporation duly called and held on ____________________ at
which a quorum was present and acting throughout, and that the same are now
in full force and effect.
I further certify that the following is (are) duly elected officer(s) of the
corporation or organization, authorized to act in accordance with the
foregoing resolutions.
NAME TITLE
______________________________________ _________________________________
______________________________________ _________________________________
______________________________________ _________________________________
Witness my hand and seal of the corporation or organization
this______________________day of________________________________, 19_______
______________________________________ _________________________________
*Secretary-Clerk Other Authorized Officer (if
required)
*If the Secretary or other recording officer is authorized to act by the
above resolutions, this certificate must also be signed by another officer.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MISSISSIPPI OPPORTUNITY FUND
July 1, 1998
A Series of
MAPLEWOOD INVESTMENT TRUST, A SERIES COMPANY
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-580-4820
Table of Contents
INVESTMENT OBJECTIVE AND POLICIES..............................................2
INVESTMENT LIMITATIONS............................................. ...........5
TRUSTEES AND OFFICERS..........................................................7
INVESTMENT ADVISOR.................................................. ......... 9
ADMINISTRATOR.................................................................11
DISTRIBUTOR...................................................................12
OTHER SERVICES................................................................12
BROKERAGE.....................................................................13
DISTRIBUTION PLAN UNDER RULE 12b-1............................................15
SPECIAL SHAREHOLDER SERVICES......................................... ........16
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION................................18
HOW SHARE PRICE IS DETERMINED.................................................19
ADDITIONAL TAX INFORMATION....................................................19
DESCRIPTION OF THE TRUST......................................................21
CALCULATION OF PERFORMANCE DATA....................................... .......22
APPENDIX A - DESCRIPTION OF RATINGS...........................................26
FINANCIAL STATEMENTS AND REPORTS..............................................31
This Statement of Additional Information ("SAI") is not a prospectus
and should be read in conjunction with the Prospectus dated July 1,
1998 for the Mississippi Opportunity Fund (the "Fund"). Copies of the
Fund's Prospectus may be obtained at no charge from the Fund, at the
address and phone number shown above.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Fund are described
in the Prospectus. Supplemental information about these policies
is set forth below. Certain capitalized terms used but not
defined have the same meaning as in the Prospectus. A
description of the various ratings used by the nationally
recognized statistical rating organizations ("NRSROs") for
securities in which the Fund may invest is included in this SAI
as Appendix A.
REPURCHASE AGREEMENTS. The Fund may acquire U.S. Government
Securities or corporate debt securities subject to repurchase
agreements. A repurchase transaction occurs when, at the time
the Fund purchases a security (normally a U.S. Treasury
obligation), it also resells it to the vendor (normally a member
bank of the Federal Reserve System or a registered Government
Securities dealer) and must deliver the security (and/or
securities substituted for them under the repurchase agreement)
to the vendor on an agreed upon date in the future. Such
securities, including any securities so substituted, are referred
to as the "Repurchase Securities." The repurchase price exceeds
the purchase price by an amount which reflects an agreed upon
market interest rate effective for the period of time during
which the repurchase agreement is in effect.
The majority of these transactions run day to day and the
delivery pursuant to the resale typically will occur within one
to five days of the purchase. The Fund's risk is limited to the
ability of the vendor to pay the agreed upon sum upon the
delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating
the instrument purchased, decline in its value and loss of
interest. These risks are minimized when the Fund holds a
perfected security interest in the Repurchase Securities and can
therefore sell the instrument promptly. Under guidelines issued
by the Trustees, the Advisor will carefully consider the
creditworthiness during the term of the repurchase agreement.
Repurchase agreements are considered as loans collateralized by
the Repurchase Securities, such agreements being defined as
"loans" under the Investment Company Act of 1940 (the "1940
Act"). The return on such "collateral" may be more or less than
that from the repurchase agreement. The market value of the
resold securities will be monitored so that the value of the
"collateral" is at all times as least equal to the value of the
loan, including the accrued interest earned thereon. All
Repurchase Securities will be held by the Fund's custodian either
directly or through a securities depository.
- 2 -
<PAGE>
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market
instruments may include U.S. Government Securities or corporate
debt securities (including those subject to repurchase
agreements) as described herein, provided that they mature in
thirteen months or less from the date of acquisition and are
otherwise eligible for purchase by the Fund. Money market
instruments also may include Bankers' Acceptances and
Certificates of Deposit of domestic branches of U.S. banks,
Commercial Paper and Variable Amount Demand Master Notes ("Master
Notes"). BANKERS' ACCEPTANCEs are time drafts drawn on and
"accepted" by a bank, are the customary means of effecting
payment for merchandise sold in import-export transactions and
are a source of financing used extensively in international
trade. When a bank "accepts" such a time draft, it assumes
liability for its payment. When the Fund acquires a Bankers'
Acceptance, the bank which "accepted" the time draft is liable
for payment of interest and principal when due. The Bankers'
Acceptance, therefore, carries the full faith and credit of such
bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured interest-
bearing debt obligation of a bank. COMMERCIAL PAPER is an
unsecured, short term debt obligation of a bank, corporation or
other borrower. Commercial Paper maturity generally ranges from
two to 270 days and is usually sold on a discounted basis rather
than as an interest-bearing instrument. The Fund will invest in
Commercial Paper only if it is rated in one of the two highest
rating categories by any NRSRO or, if not rated, is of equivalent
quality in the Advisor's opinion. Commercial Paper may include
Master Notes of the same quality. MASTER NOTES are unsecured
obligations which are redeemable upon demand of the holder and
which permit the investment of fluctuating amounts at varying
rates of interest. Master Notes are acquired by the Fund only
through the Master Note program of the Fund's custodian, acting
as administrator thereof. The Advisor will monitor, on a
continuous basis, the earnings power, cash flow and other
liquidity ratios of the issuer of a Master Note held by the Fund.
ILLIQUID INVESTMENTS. The Fund may invest up to 10% of its net
assets in illiquid securities, which are investments that cannot
be sold or disposed of in the ordinary course of business within
seven days at approximately the prices at which they are valued.
Under the supervision of the Board of Trustees, the Advisor
determines the liquidity of the Fund's investments and, through
reports from the Advisor, the Board monitors investments in
illiquid instruments. In determining the liquidity of the Fund's
investments, the Advisor may consider various factors including
(1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security
(including any demand or tender features) and (5) the nature of
the marketplace for trades (including the ability to assign or
offset the Fund's rights and obligations relating to the
- 3 -
<PAGE>
investment). Investments currently considered by the Fund to be
illiquid include repurchase agreements not entitling the holder
to payment of principal and interest within seven days and
restricted securities. If through a change in values, net assets
or other circumstances, the Fund were in a position where more
than 10% of its net assets were invested in illiquid securities,
it would seek to take appropriate steps to protect liquidity.
RESTRICTED SECURITIES. Within its limitation on investments in
illiquid securities, the Fund may purchase restricted securities
that generally can be sold in privately negotiated transactions,
pursuant to an exemption from registration under the federal
securities laws, or in a registered public offering. Where
registration is required, the Fund may be obligated to pay all or
part of the registration expense and a considerable period may
elapse between the time it decides to seek registration and the
time the Fund may be permitted to sell a security under an
effective registration statement. If during such a period,
adverse market conditions were to develop, the Fund might
obtain a less favorable price than prevailed when it decided to
seek registration of the security.
WRITING COVERED CALL OPTIONS. When the Advisor believes that
individual portfolio securities are approaching the top of the
Advisor's growth and price expectations, covered call options
("calls") may be written (sold) against such securities in a
disciplined approach to selling portfolio securities. The Fund
writes options only for hedging purposes and not for speculation.
When the Fund writes a call, it receives a premium and agrees to
sell the underlying securities to a purchaser of a corresponding
call at any time during the call period (usually not more than 9
months) at a fixed exercise or "strike" price (which may, and
often does, differ from the market price of the underlying
securities at the time of writing the call). The strike price
remains the same throughout the option period, regardless of
market price changes. To terminate its obligation on a call the
Fund has written, it may purchase a corresponding call in a
"closing purchase transaction." A profit or loss will be
realized, depending upon whether the price of the closing
purchase transaction is more or less than the premium (net of
transaction costs) previously received on the call written. The
Fund may also realize a profit if the call it has written lapses
unexercised, in which case the Fund keeps the premium and retains
the underlying securities as well. If a call written by the Fund
is exercised the Fund forgoes any possible profit from an
increase in the market price of the underlying security over the
exercise price plus the premium received.
Utilizing the facilities of the Options Clearing Corporation
("OCC"), the Custodian or a securities depository acting for the
Custodian, will, as the Fund's escrow agent, hold the securities
- 4 -
<PAGE>
underlying calls written by the Fund, so that no margin will be
required for such transactions. OCC will release the securities
on the expiration of the calls or upon the Fund's entering into a
closing purchase transaction. Call writing affects the Fund's
portfolio turnover rate and the brokerage commissions it pays.
Commissions for options, which are normally higher than for
general securities transactions, are payable when writing calls
and when purchasing closing purchase transactions. The writing
of call options by the Fund is subject to limitations established
by each of the exchanges governing the maximum number of options
which may be written or held by a single investor or group of
investors acting in concert, regardless of whether the options
were written or purchased on the same or different exchanges or
are held in one or more accounts or through one or more different
exchanges or through one or more brokers. Therefore the number
of calls the Fund may write (or purchase in closing transactions)
may be affected by options written or held by other entities,
including other clients of the Advisor. An exchange may order
the liquidation of positions found to be in violation of these
limits and may impose certain other sanctions. If the Fund
desires to enter into a closing purchase transaction, but there
is no market when it desires to do so, it would have to hold the
securities underlying the call until the call lapses or until the
call is exercised.
INVESTMENT LIMITATIONS
The Fund has adopted the following fundamental investment
limitations, which cannot be changed without approval of the
holders of a majority of the outstanding voting shares of the
Fund. When used in the Prospectus or this SAI, a "majority" of
shareholders means the vote of the lesser of (1) 67% of the
shares of the Trust (or the Fund) present at a meeting if the
holders of more than 50% of the outstanding shares are present in
person or by proxy, or (2) more than 50% of the outstanding
shares of the Trust (or the Fund). Unless otherwise indicated,
percentage limitations apply at the time of purchase.
As a matter of fundamental policy, the Fund MAY NOT:
(1) Issue senior securities, borrow money, or pledge its assets,
except that it may borrow from banks as a temporary measure
(a) for extraordinary or emergency purposes, in amounts not
exceeding 5% of its total assets or (b) in order to meet
redemption requests in amounts not exceeding 15% of its
total assets. The Fund will not make any further
investments if borrowing exceeds 5% of its total assets
until such time as total borrowing represents less than 5%
of Fund assets.
- 5 -
<PAGE>
(2) Invest for the purpose of exercising control or management
of another issuer;
(3) Purchase or sell commodities or commodities contracts, real
estate, (including limited partnership interests, but
excluding readily marketable securities secured by real
estate or interests therein, readily marketable interests
in real estate investment trusts, or readily marketable
securities issued by companies that invest in real estate or
interests therein) or interests in oil, gas or other mineral
exploration or development programs or leases (although it
may invest in readily marketable securities of issuers that
invest in or sponsor such programs or leases).
(4) Underwrite securities issued by others, except to the extent
that the disposition of portfolio securities, either
directly from an issuer or from an underwriter for an issuer
may be deemed to be an underwriter under the federal
securities laws.
(5) Invest in warrants, valued at the lower of cost or market,
exceeding more than 5% of the value of the Fund's net
assets. Included within this amount, but not to exceed 2%
of the value of the Fund's net assets, may be warrants which
are not listed on the New York or American Stock Exchange;
warrants acquired by the Fund in units or attached to
securities may be deemed to be without value;
(6) Participate on a joint or joint and several basis in any
trading account in securities;
(7) Purchase foreign securities;
(8) Invest more than 10% of its total assets in the securities
of one or more investment companies;
(9) Make loans of money or securities, except that the Fund may
(i) invest in repurchase agreements and commercial paper;
(ii) purchase a portion of an issue of publicly distributed
bonds, debentures or other debt securities; and (iii)
acquire private issues of debt securities subject to the
limitations on investments in illiquid securities; or
(10) Write, purchase or sell puts, calls, straddles, or
combinations thereof or futures contracts or related options
(but the Fund may write covered call options as described in
the Prospectus).
The following investment limitations are not fundamental, and may be changed
without shareholder approval. As a matter of nonfundamental policy, the Fund
MAY NOT:
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<PAGE>
(1) Invest in securities of issuers which have a record of less
than three years' continuous operation (including
predecessors and, in the case of bonds, guarantors) if more
than 5% of its total assets would be invested in such
securities;
(2) Invest more than 10% of its net assets in illiquid
securities. For this purpose, illiquid securities include,
among others (a) securities for which no readily available
market exists or which have legal or contractual
restrictions on resale, (b) fixed time deposits that are
subject to withdrawal penalties and have maturities of more
than seven days, and (c) repurchase agreements not
terminable within seven days;
(3) Make short sales of securities or maintain a short
position, except short sales "against the box." A short
sale is made by selling a security the Fund does not own.
A short sale is "against the box" to the extent that the
Fund contemporaneously owns or has the right to obtain at no
additional cost securities identical to those sold short.
(While the Fund has reserved the right to make short sales
"against the box", the Advisor has no present intention of
engaging in such transactions at this time or during the
coming year); or
(4) Purchase any securities on margin except in connection with
such short-term credits as may be necessary for the
clearance of transactions.
Whenever any fundamental investment policy or investment
restriction states a maximum percentage of assets, it is intended
that if the percentage limitation is met at the time the
investment is made, a later change in percentage resulting from
changing total or net asset values will not be considered a
violation of such policy.
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Trust,
their present position with the Trust, age, principal occupations
during the past 5 years and their aggregate compensation from the
Trust for the fiscal year ended February 28, 1998:
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<PAGE>
<TABLE>
<S> <C> <C>
Name, Position, Principal Occupation(s) Compensation
Age and Address During Past 5 Years From the Trust
- ----------------- ------------------------ --------------
Jack E. Brinson (age 66) President, Brinson Investment Co. $3,900
Trustee and Brinson Chevrolet, Inc.,
1105 Panola Street Tarboro, North Carolina;
Tarboro, North Carolina 27886 Trustee, The Nottingham Investment
Trust II, The Chesapeake Funds and
New Providence Funds, registered
investment companies
David S. Brollier (age 55) President and Chief Operating Officer, $3,900
Trustee America's Utility Fund, Inc. (until
1633 Monument Avenue August 1995); Director, Vice
Richmond, Virginia 23220 President and Assistant
Treasurer of Dominion Capital, Inc.
(until August 1995); and Assistant
Treasurer of Dominion Resources, Inc.,
Richmond, Virginia (until December 1994)
O. James Peterson III (age 62) President, Colonial Downs Holdings, Inc., $3,900
Trustee and Chairman New Kent, Virginia; previously, Chief
Ten Bellona Arsenal Financial Officer of the Maryland Jockey
Midlothian, Virginia 23113 Club, Laurel, Maryland (April 1994 -
December 1996); previously, Senior Vice
President and Chief Financial Officer of
Dominion Resources, Inc., Richmond,
Virginia (until March 1994)
Christopher J. Smith (age 31) President, ObjectTiger Ltd., a $3,900
Trustee and Vice Chairman computer services firm, Bloomfield
867 Thorntree Court Hills, Michigan; previously, Corporate
Bloomfield Hills, Michigan 48304 Counsel of Seligman & Associates and
a Director of Amelia Earhart Capital
Management, Inc., Southfield, Michigan
(until 1996)
Ashby M. Foote III (age 46) President,
President Vector Money Management, Inc.
4266 I-55 North, Suite 102 Jackson, Mississippi
Jackson, Mississippi 39211
- 8 -
<PAGE>
Robert G. Dorsey (age 41) President and Treasurer, Countrywide Fund
Vice President Services, Inc., a transfer agent; and CW Fund
312 Walnut Street, 21st Floor Distributors, Inc., a broker-dealer; Vice President-
Cincinnati, Ohio 45202 Finance and Treasurer, Countrywide Financial Services,
Inc., a holding company; Treasurer, Countrywide
Investments, Inc., an investment adviser and broker-
dealer; Vice President, Countrywide Investment Trust,
Countrywide Tax-Free Trust and Countrywide Strategic
Trust, registered investment companies, Cincinnati, Ohio
John F. Splain (age 41) Vice President, Secretary and General
Secretary Counsel, Countrywide Fund Services, Inc. and CW 312
Walnut Street, 21st Floor Fund Distributors, Inc.; Secretary and General
Cincinnati, Ohio 45202 Counsel, Countrywide Financial Services, Inc. and
Countrywide Investments, Inc.; Secretary, Countrywide
Investment Trust, Countrywide Tax-Free Trust and
Countrywide Strategic Trust
Mark J. Seger (age 36) Chief Operating Officer, Countrywide Fund
Treasurer Services, Inc.; Vice President, CW Fund
312 Walnut Street, 21st Floor Distributors, Inc.; Treasurer, Countrywide
Cincinnati, Ohio 45202 Investment Trust, Countrywide Tax-Free Trust and
Countrywide Strategic Trust
___________________________________
</TABLE>
The officers of the Trust do not receive compensation from the
Trust for performing the duties of their office. All Trustees
are reimbursed for any out-of-pocket expenses incurred in
connection with their attendance at Board meetings.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of June 1, 1998, the
Trustees and officers of the Trust as a group owned beneficially
(i.e., had voting and/or investment power) less than 1% of the
then outstanding shares of the Fund. On the same date, Sta-Home
Health Agency Inc. Pension Plan, 406 Briarwood Drive, Jackson,
Mississippi 39206, owned of record 9.1% of the then outstanding
shares of the Fund; and Harmon & Co. c/o Trustmark National Bank
Trust Dept., P.O. Box 291, Jackson, Mississippi 39205, owned of
record 7.6% of the then outstanding shares of the Fund.
INVESTMENT ADVISOR
Vector Money Management, Inc. (the "Advisor") supervises the
Fund's investments pursuant to an Investment Advisory Agreement
(the "Advisory Agreement") described in the Prospectus. The
Advisory Agreement will be renewed for one year periods only so
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<PAGE>
long as such renewal and continuance is specifically approved at
least annually by the Board of Trustees or by vote of a majority
of the Fund's outstanding voting securities, provided the
continuance is also approved by a majority of the Trustees who
are not "interested persons" of the Trust or the Advisor by vote
cast in person at a meeting called for the purpose of voting on
such approval. The Advisory Agreement is terminable without
penalty on sixty days notice by the Board of Trustees of the
Trust or by the Advisor. The Advisory Agreement will terminate
automatically in the event of its assignment.
Compensation of the Advisor is at the annual rate of .875% of the
Fund's average daily net assets. For the fiscal year ended
February 28, 1998, the Advisor waived its entire advisory fee of
$26,881 and reimbursed the Fund $57,959 of expenses in order to
voluntarily reduce the operating expenses of the Fund. For the
fiscal year ended February 28, 1997, the Advisor waived its
entire advisory fee of $20,989 and reimbursed the Fund $55,363 of
expenses in order to voluntarily reduce the operating expenses of
the Fund. For the fiscal year ended February 29, 1996, the
Advisor waived its entire advisory fee of $11,633 and reimbursed
the Fund $50,193 of expenses in order to voluntarily reduce the
operating expenses of the Fund.
The Advisor is controlled by Ashby M. Foote III, who is President
of both the Advisor and the Trust. In addition to acting as
Advisor to the Fund, the Advisor provides investment advice to
individuals, pension and profit sharing plans, trusts, estates,
charitable organizations and corporations.
The Advisor provides a continuous investment program for the
Fund, including investment research and management with respect
to all securities, investments, cash and cash equivalents of the
Fund. The Advisor determines what securities and other
investments will be purchased, retained or sold by the Fund, and
does so in accordance with the investment objective and policies
of the Fund as described herein and in the Prospectus. The
Advisor places all securities orders for the Fund, determining
with which broker, dealer, or issuer to place the orders.
The Advisor also provides, at its own expense, certain Executive
Officers to the Trust.
The Advisor must adhere to the brokerage policies of the Fund in
placing all orders, the substance of which policies are that the
Advisor attempts to obtain the best execution for all securities
brokerage transactions.
Under the Advisory Agreement, the Advisor is not responsible for
any error of judgment or mistake of law or for any loss suffered
by the Fund 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
- 10 -
<PAGE>
resulting from willful misfeasance, bad faith or gross negligence
on the part of the Advisor in the performance of its duties or
from the reckless disregard of its duties and obligations under
the Agreement.
ADMINISTRATOR
Countrywide Fund Services, Inc. (the "Administrator") maintains
the records of each shareholder's account, answers shareholders'
inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder
service functions. The Administrator receives for its services
as transfer agent a fee payable monthly at an annual rate of $17
per account, provided, however, that the minimum fee is $1,000
per month. In addition, the Fund pays out-of-pocket expenses,
including but not limited to, postage, envelopes, checks, drafts,
forms, reports, record storage and communication lines.
The Administrator also provides accounting and pricing services
to the Fund. The Administrator receives $2,000 per month from
the Fund for calculating daily net asset value per share and
maintaining such books and records as are necessary to enable the
Administrator to perform its duties.
In addition, the Administrator has been retained to provide
administrative services to the Fund. In this capacity, the
Administrator supplies non-investment related statistical and
research data, internal regulatory compliance services and
executive and administrative services. The Administrator
supervises the preparation of tax returns, reports to
shareholders of the Fund, reports to and filings with the
Securities and Exchange Commission and state securities
commissions, and materials for meetings of the Board of Trustees.
For the performance of these administrative services, the Fund
pays the Administrator a fee at the annual rate of .15% of the
average value of its daily net assets up to $50,000,000, .125% of
such assets from $50,000,000 to $100,000,000 and .1% of such
assets in excess of $100,000,000, provided, however, that the
minimum fee is $1,000 per month.
For the fiscal year ended February 28, 1998, the Administrator
received from the Fund transfer agent fees of $24,000, accounting
and pricing fees of $24,000 and administrative fees of $12,000.
For the fiscal year ended February 28, 1997, the Administrator
received from the Fund transfer agent fees of $15,000, accounting
and pricing fees of $15,000 and administrative fees of $7,500.
Prior to June 1, 1996 the administrator to the Fund was The
Nottingham Company, Rocky Mount, North Carolina. For the fiscal
years ended February 28, 1997 and February 29, 1996, The
Nottingham Company received from the Fund fees of $10,321 and
$33,000, respectively.
- 11 -
<PAGE>
DISTRIBUTOR
CW Fund Distributors, Inc. (the "Distributor") is the principal
underwriter of the Fund and, as such, the exclusive agent for
distribution of shares of the Fund. The Distributor is obligated
to sell the shares on a best efforts basis only against purchase
orders for the shares. Shares of the Fund are offered to the
public on a continuous basis.
The Distributor currently allows concessions to dealers who sell
shares of the Fund. The Distributor retains the entire sales
charge on all direct investments in the Fund and on all
investments in accounts with no designated dealer of record.
During the fiscal year ended February 28, 1998, Alpha-Omega
Capital Corp. served as the distributor for the Fund. For the
fiscal year ended February 28, 1998, Alpha-Omega Capital Corp.
earned $2,103 in underwriting and brokerage commissions. Prior
to April 21, 1997, Countrywide Investments, Inc. served as the
distributor for the Fund. For the fiscal year ended February 28,
1997, Countrywide Investments, Inc. earned $629 in underwriting
and brokerage commissions. Prior to June 1, 1996, Capital
Investment Group, Inc. served as the distributor for the Fund.
For the fiscal year ended February 29, 1996, Capital Investment
Group, Inc. earned $7,050 in underwriting commissions.
The Fund may compensate dealers, including the Distributor and
its affiliates, based on the average balance of all accounts in
the Fund for which the dealer is designated as the party
responsible for the account. See "Distribution Plan Under Rule
12b-1" below.
OTHER SERVICES
AUDITORS. The firm of KPMG Peat Marwick LLP, 201 East Fifth
Street, Cincinnati, Ohio 45202, has been retained by the Board of
Trustees to perform an independent audit of the financial
statements of the Fund.
CUSTODIAN. The Custodian of the Fund's assets is Trustmark
National Bank, 248 East Capitol Street, Jackson, Mississippi
39205. The Custodian holds all cash and securities of the Fund
(either in its possession or in its favor through "book entry
systems" authorized by the Trustees in accordance with the 1940
Act), collects all income and effects all securities transactions
on behalf of the Fund. For its services as Custodian, the
Custodian receives an annual fee from the Fund based on the
average net assets of the Fund held by the Custodian.
- 12 -
<PAGE>
BROKERAGE
It is the Fund's practice to seek to obtain the best overall
terms available in executing Fund transactions and selecting
brokers or dealers. Subject to the general supervision of the
Board of Trustees, the Advisor is responsible for, makes
decisions with respect to, and places orders for all purchases
and sales of portfolio securities for the Fund.
In assessing the best overall terms available for any
transaction, the Advisor shall consider 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, both for the specific transaction and on a
continuing basis. In addition, the Advisor may cause the Fund to
pay a broker-dealer which furnishes brokerage and research
services a higher commission than that which might be charged by
another broker-dealer for effecting the same transaction,
provided the Advisor determines in good faith that such
commission is reasonable in relation to the value of the
brokerage and research services provided by such broker-dealer,
viewed in terms of either the particular transaction or the
overall responsibilities of the Advisor to the Fund. Such
brokerage and research services may consist of reports and
statistics relating to specific companies or industries, general
summaries of groups of stocks or bonds and their comparative
earnings and yields, or broad overviews of the economy and the
stock, bond and government securities markets.
Supplementary research information so received is in addition to,
and not in lieu of, services required to be performed by the
Advisor and does not reduce the advisory fees payable by the
Fund. The Trustees will periodically review any commissions paid
by the Fund to consider whether the commissions paid over
representative periods of time appear to be reasonable in
relation to the benefits received by the Fund. It is possible
that certain of the supplementary research or other services
received will primarily benefit one or more other accounts for
which investment discretion is exercised by the Advisor.
Conversely, the Fund may be the primary beneficiary of the
research or other services received as a result of securities
transactions effected for such other accounts.
The Advisor may also utilize a brokerage firm affiliated with the
Trust or the Advisor if it believes it can obtain the best
execution from such firm. The Fund will not execute portfolio
transactions through, acquire securities issued by, make savings
deposits in or enter into repurchase agreements with the Advisor
or an affiliated person of the Advisor (as such term is defined
in the 1940 Act) acting as principal, except to the extent
- 13 -
<PAGE>
permitted by the Securities and Exchange Commission ("SEC"). In
addition, the Fund will not purchase securities during the
existence of any underwriting or selling group relating thereto
of which the Advisor or an affiliated person of the Advisor, is a
member, except to the extent permitted by the SEC. Under certain
circumstances, the Fund may be at a disadvantage because of these
limitations in comparison with other investment companies that
have similar investment objectives but are not subject to such
limitations.
The Fund purchases money market instruments from dealers,
underwriters and issuers. The Fund does not expect to incur any
brokerage commissions on such purchases because money market
instruments are generally traded on a net basis by a dealer
acting as principal for its own account without a stated
commission. The price of the security, however, usually includes
a profit to the dealer. Securities purchased in underwritten
offerings include a fixed amount of compensation to the
underwriter, generally referred to as the underwriter's
concession or discount. When securities are purchased directly
from or sold directly to an issuer, no commissions or discounts
are paid.
Transactions on U.S. stock exchanges involve the payment of
negotiated brokerage commissions. On exchanges on which
commissions are negotiated, the cost of transactions may vary
among different brokers. Transactions in the over-the-counter
market are generally on a net basis (i.e. without commission)
through dealers, or otherwise involve transactions directly with
the issuer of an instrument.
The Fund may participate, if and when practicable, in bidding for
the purchase of Fund securities directly from an issuer in order
to take advantage of the lower purchase price available to
members of a bidding group. The Fund will engage in this
practice, however, only when the Advisor, in its sole discretion,
believes such practice to be otherwise in the Fund's interest.
Investment decisions for the Fund will be made independently from
those for any other accounts advised or managed by the Advisor.
Such other accounts may also invest in the same securities as the
Fund. To the extent permitted by law, the Advisor may aggregate
the securities to be sold or purchased for the Fund with those to
be sold or purchased for other accounts in executing
transactions. When a purchase or sale of the same security is
made at substantially the same time on behalf of the Fund and
other accounts, the transaction will be averaged as to price and
available investments allocated as to amount, in the manner which
the Advisor believes to be equitable to the Fund and such other
accounts. In some instances, this investment procedure may
adversely affect the price paid or received by the Fund or the
size of the position obtained or sold by the Fund.
- 14 -
<PAGE>
For the fiscal years ended February 28, 1998 and 1997 and
February 29, 1996, the total brokerage commissions paid by the
Fund were $5,089, $2,949 and $7,178, respectively.
DISTRIBUTION PLAN UNDER RULE 12b-1
The Fund has adopted a Plan of Distribution under Rule 12b-1 of
the 1940 Act (the "Plan"). The Plan permits the Fund to pay for
expenses incurred in the distribution and promotion of the Fund's
shares.
Under the Plan, the Fund may expend in any fiscal year up to .50%
of its average daily net assets to finance any activity which is
primarily intended to result in the sale of shares of the Fund
and the servicing of shareholder accounts, provided the Board of
Trustees has approved the category of expenses for which payment
is being made. Expenditures under the Plan as service fees to
any person who sells shares of the Fund may not exceed an annual
rate of .25% of the Fund's average daily net assets.
During the fiscal year ended February 28, 1998, the Fund incurred
$11,081 in distribution expenses under the Plan for payments to
broker-dealers and others for the sale or retention of assets.
Ashby M. Foote III, as the President and controlling shareholder
of the Advisor, may be deemed to have a financial interest in the
operation of the Plan and the Implementation Agreements.
Potential benefits to the Fund from the Plan include improved
shareholder servicing, savings in transfer agency costs, benefits
to the investment process from growth and stability of assets and
maintenance of a financially healthy management organization.
Subject to its practice of seeking to obtain best execution, the
Fund may, from time to time, buy or sell portfolio securities
from or to firms which receive payments under the Plan.
The Plan, the Underwriting Agreement with the Distributor and the
form of Dealer Agreement with broker-dealers have all been
approved by the Board of Trustees of the Trust, including a
majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust and who have no direct or
indirect financial interest in the Plan or any related
agreements, by vote cast in person or at a meeting duly called
for the purpose of voting on the Plan and such Agreements.
Continuation of the Plan, the Underwriting Agreement and the form
of Dealer Agreement must be approved annually by the Board of
Trustees in the same manner as specified above. Each year the
Trustees must determine that continuation of the Plan is in the
best interests of shareholders of the Fund and there is a
reasonable likelihood that the Plan will benefit the Fund. The
Board of Trustees has made such a determination for the current
- 15 -
<PAGE>
year of operations under the Plan. The Plan, the Underwriting
Agreement and the Dealer Agreements may be terminated at any time
without penalty by a majority of those trustees who are not
"interested persons" or by a majority of the outstanding shares
of the Fund. Any amendment materially increasing the maximum
percentage payable under the Plan must likewise be approved by a
majority of the outstanding shares of the Fund as well as a
majority of the Trustees who are not "interested persons" and
have no direct or indirect financial interest in the Plan (the
"Independent Trustees"). In order for the Plan to remain
effective, the selection and nomination of those Trustees who are
not interested persons of the Trust must be effected by the
Independent Trustees during such period. All amounts spent by
the Fund pursuant to the Plan must be reported quarterly in a
written report to the Trustees for their review.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Fund offers the following
shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary
investments to be made at any time. Available to individuals,
custodians, corporations, trusts, estates, corporate retirement
plans and others, investors are free to make additions and
withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Fund, a
shareholder account is opened in accordance with the investor's
registration instructions. Each time there is a transaction in a
shareholder account, such as an additional investment or the
reinvestment of a dividend or distribution, the shareholder will
receive a confirmation statement showing the current transaction
and all prior transactions in the shareholder account during the
calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables
investors to make regular monthly or bi-monthly investments in
shares through automatic charges to their checking account. With
shareholder authorization and bank approval, the Administrator
will automatically charge the checking account for the amount
specified ($50 minimum) which will be automatically invested in
shares at the public offering price on or about the fifteenth day
or the last business day of the month. The shareholder may
change the amount of the investment or discontinue the plan at
any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a
value of $5,000 or more may establish a Systematic Withdrawal
Plan. A shareholder may receive monthly or quarterly payments,
in amounts of not less than $50 per payment, by authorizing the
Fund to redeem the necessary number of shares periodically (each
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<PAGE>
month, or quarterly in the months of March, June, September and
December). Payments may be made directly to an investor's
account with a commercial bank or other depository institution
via an Automated Clearing House ("ACH") transaction.
Instructions for establishing this service are included in the
Application contained in the Prospectus or are available by
calling the Fund. Payment may also be made by check made payable
to the designated recipient and mailed within 7 days of the
valuation date. If the designated recipient is other than the
registered shareholder, the signature of each shareholder must be
guaranteed on the application (see "Signature Guarantees" in the
Prospectus). A corporation (or partnership) must also submit a
"Corporate Resolution" (or "Certification of Partnership")
indicating the names, titles and required number of signatures
authorized to act on its behalf. The application must be signed
by a duly authorized officer(s) and the corporate seal affixed.
No redemption fees are charged to shareholders under this plan.
Costs in conjunction with the administration of the plan are
borne by the Fund. Investors should be aware that such
systematic withdrawals may deplete or use up entirely their
initial investment and may result in realized long-term or short-
term capital gains or losses. The Systematic Withdrawal Plan may
be terminated at any time by the Fund upon sixty days' written
notice or by an investor upon written notice to the Fund.
Applications and further details may be obtained by calling the
Fund at 1-800-580-4820, or by writing to:
Mississippi Opportunity Fund
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
PURCHASES IN KIND. The Fund may accept securities in lieu of
cash in payment for the purchase of shares of the Fund. The
acceptance of such securities is at the sole discretion of the
Advisor based upon the suitability of the securities accepted for
inclusion as a long term investment of the Fund, the
marketability of such securities, and other factors which the
Advisor may deem appropriate. If accepted, the securities will
be valued using the same criteria and methods as described in
"How Shares are Valued" in the Prospectus. Transactions
involving the issuance of shares in the Fund for securities in
lieu of cash will be limited to acquisitions of securities
(except for municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) which: (a)
meet the investment objective and policies of the Fund; (b) are
acquired for investment and not for resale; (c) are liquid
securities which are not restricted as to transfer either by law
or liquidity of market; and (d) have a value which is readily
ascertainable (and not established only by evaluation procedures)
as evidenced by a listing on the American Stock Exchange, the New
York Stock Exchange or NASDAQ.
- 17 -
<PAGE>
REDEMPTION IN KIND. The Fund does not intend, under normal
circumstances, to redeem its securities by payment in kind. It
is possible, however, that conditions may arise in the future
which would, in the opinion of the Trustees, make it undesirable
for the Fund to pay for all redemptions in cash. In such case,
the Board of Trustees may authorize payment to be made in readily
marketable portfolio securities of the Fund. Securities
delivered in payment of redemptions would be valued at the same
value assigned to them in computing the net asset value per
share. Shareholders receiving such securities would incur
brokerage costs when the securities are sold. An irrevocable
election has been filed under Rule 18f-1 of the 1940 Act, wherein
the Fund is committed to pay redemptions in cash, rather than in
kind, to any shareholder of record of the Fund who redeems during
any ninety day period, the lesser of (a) $250,000 or (b) one
percent (1%) of the Fund's net assets at the beginning of such
period.
TRANSFER OF REGISTRATION. To transfer shares to another owner,
send a written request to the Administrator at the address shown
herein. Your request should include the following: (1) the Fund
name and existing account registration; (2) signature(s) of the
registered owner(s) exactly as the signature(s) appear(s) on the
account registration; (3) the new account registration, address,
social security or taxpayer identification number and how
dividends and capital gains are to be distributed; (4) signature
guarantees (see the Prospectus under the heading "Signature
Guarantees"); and (5) any additional documents which are required
for transfer by corporations, administrators, executors,
trustees, guardians, etc. If you have any questions about
transferring shares, call or write the Administrator.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
PURCHASES. Shares of the Fund are offered and sold on a
continuous basis and may be purchased through authorized dealers
or directly by contacting the Distributor or the Administrator.
Selling dealers have the responsibility of transmitting orders
promptly to the Administrator. The public offering price of
shares of the Fund equals the net asset value plus a sales
charge. The Distributor receives the sales charge on purchases
of shares and may reallow it in the form of dealer discounts and
brokerage commissions. The current schedule of sales charges and
related dealer discounts and brokerage commissions is set forth
in the Prospectus. See "How to Purchase Shares" in the
Prospectus.
REDEMPTIONS. Under the 1940 Act, the Fund may suspend the right
of redemption or postpone the date of payment for shares during
any period when (a) trading on the New York Stock Exchange is
restricted by applicable rules and regulations of the SEC; (b)
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<PAGE>
the Exchange 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 Fund may also suspend or postpone the recordation of the
transfer of shares upon the occurrence of any of the foregoing
conditions.
In addition to the situations described in the Prospectus under
"How to Redeem Shares," the Fund may redeem shares involuntarily
to reimburse the Fund for any loss sustained by reason of the
failure of an investor to make full payment for shares purchased
by the investor or to collect any charge relating to a
transaction effected for the benefit of an investor which is
applicable to Fund shares as provided in the Prospectus from time
to time.
HOW SHARE PRICE IS DETERMINED
Under the 1940 Act, the Trustees are responsible for determining
in good faith the fair value of the securities and other assets
of the Fund and they have adopted procedures to do so as follows:
The public offering price (net asset value plus applicable sales
charge) of shares of the Fund is determined as of 4:00 p.m.,
Eastern time, Monday through Friday, except on business holidays
when the New York Stock Exchange is closed. The New York Stock
Exchange recognizes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, President's Day, Good Friday,
Memorial Day, Fourth of July, Labor Day, Thanksgiving Day and
Christmas Day. Any other holiday recognized by the New York
Stock Exchange will be considered a business holiday on which the
Fund's share price will not be determined.
The net asset value per share of the Fund is calculated by adding
the value of the securities and other assets belonging to the
Fund, subtracting the liabilities charged to the Fund and
dividing the result by the number of outstanding shares. Assets
belonging to the Fund consist of the consideration received upon
the issuance of shares of the Fund together with all net
investment income, realized gains/losses and proceeds derived
from the investment thereof, including any proceeds from the sale
of such investments and any funds or payments derived from any
reinvestment of such proceeds.
ADDITIONAL TAX INFORMATION
The following summarizes certain additional tax considerations
generally affecting the Fund and its shareholders that are not
described in the Prospectus. No attempt is made to present a
detailed explanation of the tax treatment of the Fund or its
shareholders, and the discussion here and in the Prospectus is
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<PAGE>
not intended as a substitute for careful tax planning. This tax
information is based on tax laws and regulations that are in
effect on the date hereof; such laws and regulations may be
changed by legislative, judicial or administrative action.
Investors are advised to consult their tax advisors with specific
reference to their own tax situations.
The Fund intends to qualify or remain qualified as a regulated
investment company. In order to qualify, the Fund must elect to
be a regulated investment company or have made such an election
for a previous year and must satisfy, in addition to the
distribution requirement described in the Prospectus, certain
requirements with respect to the source of its income for a
taxable year. At least 90% of the gross income of the Fund must
be derived from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of
stocks, securities or foreign currencies, and other income
derived with respect to the Fund's business of investing in such
stock, securities or currencies. Any income derived by the Fund
from a partnership or trust is derived with respect to the Fund's
business of investing in such stock, securities or currencies
only to the extent that such income is attributable to items of
income that would have been qualifying income if realized by the
Fund in the same manner as by the partnership or trust.
An investment company may not qualify as a regulated investment
company for any taxable year unless it satisfies certain
requirements with respect to the diversification of its
investments at the close of each quarter of the taxable year. In
general, at least 50% of the value of its total assets must be
represented by cash, cash items, government securities,
securities of other regulated investment companies and other
securities which, with respect to any one issuer, do not
represent more that 5% of the total assets of the investment
company nor more than 10% of the outstanding voting securities of
such issuer. In addition, not more than 25% of the value of the
investment company's total assets may be invested in the
securities (other than government securities or the securities of
other regulated investment companies) of any one issuer. The
Fund intends to satisfy all requirements on an ongoing basis for
continued qualification as a regulated investment company.
The Fund will designate any distribution of long term capital
gains as a capital gain dividend in a written notice mailed to
shareholders within 60 days after the close of the Fund's taxable
year. Distributions of net capital gains (net long-term capital
gains less net short-term capital losses) to shareholders are
taxable as capital gains, regardless of how long a shareholder
has held the Fund's shares. The maximum capital gains rate for
individuals is 28% (for assets held for more than 12 months, but
not more than 18 months) and 20% (for assets held for more than
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<PAGE>
18 months). The maximum capital gains rate for corporate
shareholders is the same as the maximum tax rate for ordinary
income. Redemptions of shares of the Fund are taxable events in
which a shareholder may realize a gain or loss.
A 4% nondeductible excise tax is imposed on regulated investment
companies that fail to currently distribute an amount equal to
specified percentages of their ordinary taxable income and
capital gain net income (excess of capital gains over capital
losses). The Fund intends to make sufficient distributions or
deemed distributions of its ordinary taxable income and any
capital gain net income prior to the end of each calendar year to
avoid liability for this excise tax.
If for any taxable year the Fund does not qualify for the special
federal income tax treatment afforded regulated investment
companies, all of its taxable income will be subject to federal
income tax at regular corporate rates (without any deduction for
distributions to its shareholders). In such event, dividend
distributions (whether or not derived from interest on tax-exempt
securities) would be taxable as ordinary income to shareholders
to the extent of the Fund's current and accumulated earnings and
profits, and would be eligible for the dividends received
deduction for corporations.
The Fund will be required in certain cases to withhold and remit
to the U.S. Treasury 31% of taxable dividends or 31% of gross
proceeds realized upon sale paid to shareholders who have failed
to provide a correct tax identification number in the manner
required, or who are subject to withholding by the Internal
Revenue Service for failure to properly include on their tax
return payments of taxable interest or dividends, or who have
failed to certify to the Fund that they are not subject to backup
withholding when required to do so or that they are "exempt
recipients."
Depending upon the extent of the Fund's activities in states and
localities in which its offices are maintained, in which its
agents or independent contractors are located or in which it is
otherwise deemed to be conducting business, the Fund may be
subject to the tax laws of such states or localities. In
addition, in those states and localities that have income tax
laws, the treatment of the Fund and its shareholders under such
laws may differ from their treatment under federal income tax
laws.
DESCRIPTION OF THE TRUST
The Trust was organized as a Massachusetts business trust on
August 12, 1992 pursuant to an Agreement and Declaration of
Trust. Shares of the Fund, when issued, are fully paid and non-
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<PAGE>
assessable and have no preemptive or conversion rights.
Shareholders are entitled to one vote for each full share held
and a fractional vote for each fractional share held.
The Declaration of Trust provides that the Trustees of the Trust
will not be liable in any event in connection with the affairs of
the Trust, except as such liability may arise from his or her own
bad faith, willful misfeasance, gross negligence or reckless
disregard of duties. It also provides that all third parties
shall look solely to the Trust property for satisfaction of
claims arising in connection with the affairs of the Trust. With
the exceptions stated, the Declaration of Trust provides that a
Trustee or officer is entitled to be indemnified against all
liability in connection with the affairs of the Trust.
In the event of a liquidation or dissolution of the Trust or the
Fund, shareholders would be entitled to receive the assets
available for distribution belonging to the Fund. Shareholders
are entitled to participate equally in the net distributable
assets of the Fund on liquidation, based on the number of shares
of the Fund that are held by each shareholder.
Prior to June 1, 1996 the Trust was named The Nottingham
Investment Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, the Fund may, from time to time,
advertise certain total return and yield information. The
average annual total return of the Fund for a period is computed
by subtracting the net asset value per share at the beginning of
the period from the net asset value per share at the end of the
period (after adjusting for the reinvestment of any income
dividends and capital gain distributions), and dividing the
result by the net asset value per share at the beginning of the
period. In particular, the average annual total return of the
Fund ("T") is computed by using the redeemable value at the end
of a specified period of time ("ERV") of a hypothetical initial
investment of $1,000 ("P") over a period of time ("n") according
to the formula P(l+T)n=ERV. The calculation of average annual
total return assumes the reinvestment of all dividends and
distributions and the deduction of the current maximum sales load
from the initial $1,000 payment. The average annual total
returns of the Fund for the one year period ended February 28,
1998 and the period since inception (April 4, 1995) to February
28, 1998 are 33.79% and 17.36%, respectively.
In addition, the Fund may advertise other total return
performance data ("Nonstandardized Return"). Nonstandardized
Return shows as a percentage rate of return encompassing all
elements of return (i.e., income and capital appreciation or
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<PAGE>
depreciation); it assumes reinvestment of all dividends and
capital gain distributions. This computation does not include
the effect of the applicable sales load which, if included, would
reduce total return. Nonstandardized Return may consist of a
cumulative percentage of return, actual year-by-year rates or any
combination thereof.
The cumulative total return for the Fund (computed without the
applicable sales load) for the period since inception (April 4,
1995) to February 28, 1998 is 65.01%. The average annual
Nonstandardized Return of the Fund (computed without the
applicable sales load) for the one year period ended February 28,
1998 and the period since inception (April 4, 1995) to February
28, 1998 is 38.64% and 18.80%, respectively. A nonstandardized
quotation of total return will always be accompanied by the
Fund's average annual total return as described above.
From time to time, the Fund may advertise its yield. A yield
quotation is based on a 30-day (or one month) period and is
computed by dividing the net investment income per share earned
during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
Yield = 2[(a-b/cd + 1)6 - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period
Solely for the purpose of computing yield, dividend income is
recognized by accruing 1/360 of the stated dividend rate of the
security each day that the Fund owns the security. Generally,
interest earned (for the purpose of "a" above) on debt
obligations is computed by reference to the yield to maturity of
each obligation held based on the market value of the obligation
(including actual accrued interest) at the close of business on
the last business day prior to the start of the 30-day (or one
month) period for which yield is being calculated, or, with
respect to obligations purchased during the month, the purchase
price (plus actual accrued interest).
The Fund's performance may be compared in advertisements, sales
literature, shareholder reports, and other communications to the
performance of other mutual funds having similar objectives or to
standardized indices or other measures of investment performance.
In particular, the Fund may compare its performance to the S&P
500 Index, which is generally considered to be representative of
the performance of unmanaged common stocks that are publicly
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<PAGE>
traded in the United States securities markets. Comparative
performance may also be expressed by reference to a ranking
prepared by a mutual fund monitoring service, such as Lipper
Analytical Services, Inc. or Morningstar, Inc. or by one or more
newspapers, newsletters or financial periodicals. The Fund may
also occasionally cite statistics to reflect its volatility and
risk. The Fund may also compare its performance to published
reports of the performance of unmanaged portfolios of companies
located in Mississippi. The performance of such unmanaged
portfolios generally does not reflect the effects of dividends or
dividend reinvestment. Performance comparisons may be useful to
investors who wish to compare the Fund's past performance to that
of other mutual funds and investment products. Of course, past
performance is not a guarantee of future results.
The Fund's performance fluctuates on a daily basis largely
because net earnings and net asset value per share fluctuate
daily. Both net earnings and net asset value per share are
factors in the computation of total return as described above.
As indicated, from time to time, the Fund may advertise its
performance compared to similar funds or portfolios using certain
indices, reporting services, and financial publications. These
may include the following:
o Lipper Analytical Services, Inc. ranks funds in various fund
categories by making comparative calculations using total
return. Total return assumes the reinvestment of all
capital gains distributions and income dividends and takes
into account any change in net asset value over a specific
period of time.
o Morningstar, Inc., an independent rating service, is the
publisher of the bi-weekly Mutual Fund Values. Mutual Fund
Values rates more than 1,000 NASDAQ-listed mutual funds of
all types, according to their risk-adjusted returns. The
maximum rating is five stars, and ratings are effective for
two weeks.
Investors may use such indices in addition to the Fund's Prospectus to obtain a
more complete view of the Fund's performance before investing. Of course, when
comparing the Fund's performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting
services, or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods
used to value portfolio securities and compute offering price. Advertisements
and other sales literature for the Fund may quote total returns that are
calculated on nonstandardized base
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<PAGE>
periods. The total returns represent the historic change in the value of an
investment in the Fund based on monthly reinvestment of dividends over a
specified period of time.
From time to time the Fund may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Fund may also disclose from time to
time information about its portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as S&P and Moody's). The Fund may also depict the historical performance
of the securities in which the Fund may invest over periods reflecting a variety
of market or economic conditions either alone or in comparison with alternative
investments, performance indices of those investments, or economic indicators.
The Fund may also include in advertisements and in materials furnished to
present and prospective shareholders statements or illustrations relating to
the appropriateness of types of securities and/or mutual funds that may be
employed to meet specific financial goals, such as saving for retirement,
children's education, or other future needs.
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<PAGE>
APPENDIX A
DESCRIPTION OF RATINGS
Under normal market conditions, at least 90% of the Fund's net
assets will be invested in equities. As a temporary defensive
position, however, the Fund may invest up to 100% of its assets
in investment grade bonds, U.S. Government Securities, repurchase
agreements or money market instruments ("Investment-Grade Debt
Securities"). When the Fund invests in Investment-Grade Debt
Securities as a temporary defensive measure, it is not pursuing
its investment objective. Under normal circumstances, however,
the Fund may invest in money market or repurchase agreement
instruments as described in the Prospectus.
The various ratings used by the NRSROs are described below. A
rating by an NRSRO represents the organization's opinion as to
the credit quality of the security being rated. However, the
ratings are general and are not absolute standards of quality or
guarantees as to the creditworthiness of an issuer.
Consequently, the Advisor believes that the quality of fixed-
income securities in which the Fund may invest should be
continuously reviewed and that individual analysts give different
weightings to the various factors involved in credit analysis. A
rating is not a recommendation to purchase, sell or hold a
security because it does not take into account market value or
suitability for a particular investor. When a security has
received a rating from more than one NRSRO, each rating is
evaluated independently. Ratings are based on current
information furnished by the issuer or obtained by the NRSROs
from other sources that they consider reliable. Ratings may be
changed, suspended or withdrawn as a result of changes in or
unavailability of such information, or for other reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS:
The following summarizes the four highest ratings used by Moody's
Investors Service, Inc. ("Moody's") for bonds which are deemed by
the Advisor to be Investment-Grade Debt Securities.
Aaa: Bonds 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 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
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<PAGE>
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 risks appear somewhat larger than in Aaa
securities.
A: Bonds rated A possess many favorable investment
attributes and are to be considered upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate but elements may be present that suggest
a susceptibility to impairment sometime in the future.
Baa: Bonds 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.
Moody's applies numerical modifiers (1,2 and 3) with respect to
bonds rated Aa, A and Baa. The modifier 1 indicates that the
bond being rated ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the bond ranks in the lower end of its
generic rating category.
Bonds which are rated Ba, B, Caa, Ca or C by Moody's are not
considered Investment-Grade Debt Securities by the Advisor.
Bonds rated Ba are judged to have speculative elements because
their future cannot be considered as well assured. Uncertainty
of position characterizes bonds in this class, because the
protection of interest and principal payments often may be very
moderate and not well safeguarded. Bonds which are rated B
generally lack characteristics of a desirable investment.
Assurance of interest and principal payments or of maintenance of
other terms of the security over any long period of time may be
small. Bonds which are rated Caa are of poor standing. Such
securities may be in default or there may be present elements of
danger with respect to principal or interest. Bonds which are
rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked
shortcomings. Bonds which are rated C are the lowest rated class
of bonds, and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
The rating Prime-1 is the highest commercial paper rating
assigned by Moody's. Issuers rated Prime-1 (or related
supporting institutions) are considered to have superior capacity
for repayment of short-term promissory obligations. Issuers
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<PAGE>
rated Prime-2 (or related supporting institutions) are considered
to have a strong capacity for repayment of short-term promissory
obligations. This will normally be evidenced by many of the
characteristics of issuers rated Prime-1 but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while
still appropriated may be more affected by external conditions.
Ample alternate liquidity is maintained.
The following summarizes the highest rating used by Moody's for
short-term notes and variable rate demand obligations:
MIG-1; VMIG-1 - Obligations bearing these designations are
of the best quality, enjoying strong protection by
established cash flows, superior liquidity support or
demonstrated broad-based access to the market for
refinancing.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S RATINGS:
The following summarizes the four highest ratings used by
Standard & Poor's Ratings Group ("S&P") for bonds which are
deemed by the Advisor to be Investment-Grade Debt Securities.
AAA: This is the highest rating assigned by S&P to a debt
obligation and indicates an extremely strong capacity to pay
principal and interest.
AA: Bonds rated AA also qualify as high quality debt
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from AAA
issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than bonds in higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they normally
exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity to pay principal and interest for bonds in this
category than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A
and BBB ratings may be modified by the addition of a plus or
minus sign to show relative standing within these major rating
categories.
Bonds rated BB, B, CCC, CC and C are not considered by the
Advisor to be Investment-Grade Debt Securities and are regarded,
on balance, as predominately speculative with respect to the
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<PAGE>
issuer's capacity to pay interest and principal in accordance
with the terms of the obligation. BB indicates the lowest degree
of speculation and C the highest degree of speculation. While
such bonds may have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Commercial paper rated A-1 by S&P indicates that the degree of
safety regarding timely payment is strong. Those issues
determined to possess extremely strong safety characteristics are
denoted A-1+. Capacity for timely payment on commercial paper
rated A-2 is satisfactory, but the relative degree of safety is
not as high as for issues designated A-1.
The rating SP-1 is the highest rating assigned by S&P to
municipal notes and indicates very strong or strong capacity to
pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are give a plus (+)
designation.
DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S RATINGS:
The following summarizes the four highest ratings used by Fitch
Investors Service, Inc. ("Fitch") for bonds which are deemed by
the Advisor to be Investment-Grade Debt Securities.
AAA: Bonds are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely to
be affected by reasonably foreseeable events.
AA: Bonds are considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and
repay principal is very strong, although not quite as strong as
bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated
F-1+.
A: Bonds are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more vulnerable
to adverse changes in economic conditions and circumstances than
bonds with higher ratings.
BBB: Bonds are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds,
and therefore, impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
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<PAGE>
To provide more detailed indications of credit quality, the AA, A
and BBB ratings may be modified by the addition of a plus or
minus sign to show relative standing within a rating category.
Bonds rated BB, B and CCC by Fitch are not considered Investment-
Grade Debt Securities and are regarded, on balance, as
predominately speculative with respect to the issuer's ability to
pay interest and make principal payments in accordance with the
terms of the obligations. BB indicates the lowest degree of
speculation and CCC the highest degree of speculation.
The following summarizes the three highest ratings used by Fitch
for short-term notes, municipal notes, variable rate demand
instruments and commercial paper.
F-1+ - Instruments assigned this rating are regarded as
having the strongest degree of assurance for timely payment.
F-1 - Instruments assigned this rating reflect an assurance
of timely payment only slightly less in degree than issues
rated F-1+.
F-2 - Instruments assigned this rating have satisfactory
degree of assurance for timely payment, but the margin of
safety is not as great as for issues assigned F-1+ and F-1
ratings.
DESCRIPTION OF DUFF & PHELPS' CREDIT RATING CO.'S RATINGS:
The following summarizes the four highest ratings used by Duff &
Phelps Credit Rating Co. ("D&P") for bonds which are deemed by
the Advisor to be Investment-Grade Debt Securities.
AAA: This is the highest rating credit quality. The risk
factors are considered to be negligible, being only slightly more
than for risk-free U.S. Treasury debt.
AA: Bonds rated AA are considered to be of high credit
quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
A: Bonds rated A have average but adequate protection
factors. However risk factors are more variable and greater in
periods of economic stress.
BBB: Bonds rated BBB have below average protection factors,
but are still considered sufficient for prudent investment.
There is considerable variability in risk during economic cycles.
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<PAGE>
Bonds rated BB, B and CCC by D&P are not considered Investment-
Grade Debt Securities and are regarded, on balance, as
predominately speculative with respect to the issuer's ability to
pay interest and make principal payments in accordance with the
terms of the obligations. BB indicates the lowest degree of
speculation and CCC the highest degree of speculation.
The rating Duff 1 is the highest rating assigned by D&P for
short-term debt, including commercial paper. D&P employs three
designations, Duff 1+, Duff 1 and Duff 1- within the highest
rating category. Duff 1+ indicates highest certainty of timely
payment. Short-term liquidity, including internal operating
factors and/or access to alternative sources of funds, is judged
to be outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations. Duff 1 indicates very high
certainty of timely payment. Liquidity factors are excellent and
supported by good fundamental protection factors. Risk factors
are considered to be minor. Duff 1- indicates high certainty of
timely payment. Liquidity factors are strong and supported by
good fundamental protection factors. Risk factors are very
small.
FINANCIAL STATEMENTS AND REPORTS
The Financial Statements of the Fund will be audited at least
once each year by independent public accountants. Shareholders
will receive annual audited and semiannual (unaudited) reports
when published, and will receive written confirmation of all
confirmable transactions in their account. A copy of the Annual
Report will accompany the Statement of Additional Information
whenever the Statement of Additional Information is requested by
a shareholder or prospective investor. The Financial Statements
of the Fund as of February 28, 1998, together with the report of
the independent accountants thereon, are included on the
following pages.
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<PAGE>
MISSISSIPPI OPPORTUNITY FUND
Annual Report
February 28, 1998
Investment Adviser Administrator
Vector Money Management, Inc. Countrywide Fund Services, Inc.
4266 I-55 North 312 Walnut Street
Suite 102 P.O. Box 5354
Jackson, MS 39211 Cincinnati, OH 45202-5354
1.601.981.1773 1.800.543.8721
Shareholder Services
1.800.580.4820
<PAGE>
VECTOR MONEY MANAGEMENT, INC.
April 27, 1998
Dear Fellow Shareholders,
As investment advisor for The Mississippi Opportunity Fund, Vector Money
Management is pleased to provide you with the Fund's 1998 annual report. For the
fiscal year ended February 28, 1998, The Mississippi Opportunity Fund finished
up 38.64%. For the same period, the S&P 500 Index was up 35.01% and the Fund's
benchmark, the Russell 2000 Index, was up 30.04%.
The Fund is operated with a philosophy of pursuing value. In our opinion, the
region is experiencing a lengthy period of strong economic growth. The fact that
many Mississippi companies, operating in what we believe to be one of the most
growth- oriented business environments in the country, are small or midsize
companies without widespread national following provides the Fund with an
opportunity to recognize and act on local opportunities with more agility than
national investment firms.
The companies which most significantly contributed to the Fund's performance
during fiscal 1998 were Deposit Guaranty, Freide Goldman, Fred's, Magna Bancorp,
Mobile Telecommunications and Proffitt's. These companies exemplify the breadth
and diversity of the regional economy. Deposit Guaranty and Magna Bancorp were
both acquired for significant premiums during the year by out of state financial
institutions seeking to establish a presence in a growing Southern business
environment. Freide Goldman, with their successful initial public offering in
July, has been a beneficiary of the increased oil and natural gas exploration
activity, both in the Gulf of Mexico and worldwide. Fred's and Proffitt's have
both turned in strong operating results by taking advantage of the positive
retail environment. And Mobile Telecommunications has overcome initial
difficulties implementing new technologies to post strong results in both
one-way and two-way paging communication systems.
Significantly, the Fund was able to generate strong performance while realizing,
for the second year in a row, no net long-term gains, which are required to be
distributed to shareholders. Effective management of tax liabilities is an
essential aspect of our management philosophy, which not only seeks performance
in returns but also allows investors' capital to continue to compound with
minimum erosion by tax liabilities.
For the Fund, 1997 was a watershed year. The Fund's activities during 1995 were
characterized by identifying value and deploying funds as investment
opportunities presented themselves. 1996 provided to be a challenging year for
small and mid-cap companies across the board. The Fund, which has a significant
weighting of small-cap and mid-cap stocks, reflected 1996's turbulent market.
However, the discounts which the markets assigned many good
<PAGE>
companies during that year presented investment opportunities which contributed
to the Fund's superior performance in 1997. We continue to seek value and
growth, and are excited about the Fund as we head into the new year.
Should you have any questions, please call us.
Sincerely,
/s/ Ashby M.Foote /s/ Allen C. Tye
Ashby M. Foote III Allen C. Tye
President Analyst
Vector Money Management The Mississippi Opportunity Fund
<PAGE>
A Representation of the Graphic Material Contained in the Annual Report is set
forth below:
Comparison of the Change in Value of a $10,000 Investment in the Mississippi
Opportunity Fund, S&P Index and the Russell 2000 Index
S&P 500 INDEX: (w/ reinvested divds)
QTRLY
DATE RETURN BALANCE
04/04/95 10,000
06/30/95 9.28% 10,928
09/30/95 7.95% 11,796
12/31/95 6.02% 12,506
03/31/96 5.37% 13,177
06/30/96 4.49% 13,769
09/30/96 3.09% 14,195
12/31/96 8.34% 15,378
03/31/97 2.68% 15,790
06/30/97 17.46% 18,547
09/30/97 7.49% 19,936
12/31/97 2.87% 20,508
02/28/98 8.40% 22,231
RUSSELL 2000 INDEX: (w/ reinvested divds)
QTRLY
DATE RETURN BALANCE
04/04/95 10,000
06/30/95 8.75% 10,875
09/30/95 9.81% 11,941
12/31/95 2.20% 12,204
03/31/96 5.09% 12,826
06/30/96 5.14% 13,485
09/30/96 0.34% 13,531
12/31/96 5.12% 14,224
03/31/97 -5.16% 13,489
06/30/97 16.17% 15,671
09/30/97 14.85% 17,997
12/31/97 -3.39% 17,387
02/28/98 5.86% 18,406
MISSISSIPPI OPPORTUNITY FUND:
QTRLY
DATE RETURN BALANCE
04/04/95 9,650
06/30/95 5.37% 10,168
09/30/95 5.72% 10,750
12/31/95 0.09% 10,760
03/31/96 7.75% 11,594
06/30/96 4.14% 12,074
09/30/96 -2.56% 11,765
12/31/96 -2.71% 11,446
03/31/97 -6.22% 10,734
06/30/97 21.98% 13,094
09/30/97 12.58% 14,742
12/31/97 4.76% 15,444
02/28/98 3.11% 15,924
<PAGE>
Mississippi Opportunity Fund
Average Annual Total Returns
1 Year Since Inception*
33.79% 17.36%
Past performance is not predictive of future performance.
*Fund inception was April 4, 1995.
- -------------------------------------------------------------------------------
Non-Standardized Total Returns
- -------------------------------------------------------------------------------
For the Periods Ended February 28, 1998
-----------------------------------------
Since
Three Months Six Months One Year Inception
Mississippi Opportunity Fund(B) 8.23% 16.24% 38.64% 18.80%
Lipper Capital Appreciation Fund Index 9.30% 11.37% 28.03% 22.95%
S&P 500 Index 10.26% 17.62% 35.01% 31.63%
Russell 2000 Index 7.77% 9.74% 30.04% 23.35%
- --------------------------------------------------------------------------------
(A)Annualized total returns since Fund inception (April 4, 1995)
(B)The total returns shown do not include the effect of applicable sales loads.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998
<TABLE>
<S> <C> <C>
ASSETS
Investments in securities, at market value (Cost $2,752,159) (Note 1) $ 3,977,203
Cash 6,534
Receivable for capital shares sold 10,376
Dividends receivable 1,983
Receivable for securities sold 20,819
Organization expenses, net (Note 1) 18,903
Receivable from Adviser (Note 3) 4,316
Other assets 891
---------
TOTAL ASSETS 4,041,025
----------
LIABILITIES
Covered call options, at market value
(premiums received $14,361) (Note 4) 21,500
Other accrued expenses and liabilities 19,035
------
TOTAL LIABILITIES 40,535
-------
NET ASSETS $ 4,000,490
==========
Net assets consist of:
Paid-in capital $ 2,780,259
Accumulated net realized gains from security transactions 2,326
Net unrealized appreciation on investments 1,217,905
---------
Net assets $ 4,000,490
==========
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 245,912
=======
Net asset value and redemption price per share (Note 1) $ 16.27
=======
Maximum offering price per share (Note 1) $ 16.86
=======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
STATEMENT OF OPERATIONS
For the Year Ended February 28, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends 33,454
EXPENSES
Investment advisory fees (Note 3) 26,881
Accounting services fees (Note 3) 24,000
Shareholder services and transfer agent fees (Note 3) 24,000
Distribution expenses, Class A (Note 3) 11,081
Distribution expenses, Class C (Note 3) 8,518
Professional fees 13,051
Administration fees (Note 3) 12,000
Amortization of organization expenses (Note 1) 9,073
Trustees' fees and expenses 7,269
Insurance expense 4,957
Postage and supplies 3,842
Custodian fees 3,800
Printing of shareholder reports 2,662
Registration fees 1,890
Pricing expense 1,270
TOTAL EXPENSES 154,294
Fees waived and expenses reimbursed by the Adviser (Note 3) (84,840)
NET EXPENSES 69,454
NET INVESTMENT LOSS (36,000)
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized losses from security transactions (10,559)
Net realized gains on option contracts written 12,869
Net change in unrealized appreciation on investments 1,012,122
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 1,014,432
NET INCREASE IN NET ASSETS FROM OPERATIONS 978,432
See accompanying notes to financial statements.
</TABLE>
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended February 28, 1998 and 1997
<TABLE>
<S> <C> <C>
Year Year
Ended Ended
Feb. 28, 1998 Feb. 28, 1997
FROM OPERATIONS: -------------- -------------
Net investment loss (36,000) (25,145)
Net realized gains from security transactions 2,310 39,221
Net change in unrealized appreciation on investments 1,012,122 81,579
Net increase in net assets from operations 978,432 95,655
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains, Class A (10,117) (14,597)
From net realized gains, Class C (3,925) (7,156)
Decrease in net assets from distributions to shareholders (14,042) (21,753)
FROM CAPITAL SHARES TRANSACTIONS (A):
CLASS A
Proceeds from shares sold 589,562 386,710
Net asset value of shares issued in reinvestment
of distributions to shareholders 9,839 14,346
Net asset value of shares converted from Class C (Note 5) 1,077,120 --
Payments for shares redeemed (185,908) (90,783)
Net increase in net assets from Class A share transactions 1,490,613 310,273
CLASS C
Proceeds from shares sold 126,494 672,365
Net asset value of shares issued in reinvestment
of distributions to shareholders 3,477 6,416
Net asset value of shares converted to Class A (Note 5) (1,077,120) --
Payments for shares redeemed (6,352) (526,585)
Net increase (decrease) in net assets from Class C share transactions (953,501) 152,196
Net increase in net assets from capital share transactions 537,112 462,469
TOTAL INCREASE IN NET ASSETS 1,501,502 536,371
NET ASSETS:
Beginning of year 2,498,988 1,962,617
End of year 4,000,490 2,498,988
(A) Summary of capital share activity:
Class A
Shares sold 40,778 31,318
Shares issued in reinvestment of distributions to shareholders 624 1,224
Shares converted (Note 5) 66,203 --
Shares redeemed (15,679) (7,687)
Net increase in shares outstanding 91,926 24,855
Shares outstanding, beginning of year 153,986 129,131
Shares outstanding, end of year 245,912 153,986
Class C
Shares sold 8,656 55,923
Shares issued in reinvestment of distributions to shareholders 223 552
Shares converted (Note 5) (67,152) --
Shares redeemed (430) (43,811)
Net increase (decrease) in shares outstanding (58,703) 12,664
Shares outstanding, beginning of year 58,703 46,039
Shares outstanding, end of year -- 58,703
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C> <C>
Class A
----------------------------------------------------------------
Year Year Period
Ended Ended Ended
Feb. 28, 1998 Feb. 28, 1997 Feb. 29, 199(A)
------------- -------------- ---------------
Net asset value at beginning of period $ 11.78 $ 11.22 $ 10.00
Income from investment operations:
Net investment loss (0.13) (0.10) (0.03)
Net realized and unrealized gains
on investments 4.68 0.76 1.27
Total from investment operations 4.55 0.66 1.24
Distributions from net realized gains (0.06) (0.10) (0.02)
Net asset value at end of period $ 16.27 $ 11.78 $ 11.22
Total return (B) 38.64% 5.92% 12.41%
Net assets at end of period $ 4,000,490 $ 1,813,797 $ 1,448,527
Ratio of expenses to average net assets
Before expense reimbursement and waived fees 4.88% 5.29% 6.90%(D)
After expense reimbursement and waived fees 2.12% 2.11% 2.12%(D)
Ratio of net investment loss to average net assets (1.03)% (4.08)% (5.20)%(D)
Portfolio turnover rate 14% 15% 7%
Average commission rate per share (C) $ 0.0777 $ 0.0877 --
(A) Represents the period from the commencement of operations (April 4, 1995) through February 29, 1996.
(B) The total returns shown do not include the effect of applicable sales loads.
(C) Beginning with the year ended February 28, 1997, the Fund is required to disclose its average commission
for purchases and sales of investment securities.
(D) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C> <C>
Class C
-----------------------------------------------------------
Period Year Period
Ended Ended Ended
Feb. 27, 199(A) Feb. 28, 1997 Feb. 29, 199(B)
--------------- ------------- ---------------
Net asset value at beginning of period $ 11.67 $ 11.17 $ 10.00
Income from investment operations:
Net investment loss (0.19) (0.16) (0.05)
Net realized and unrealized gains
on investments 4.62 0.76 1.24
Total from investment operations 4.43 0.60 1.19
Distributions from net realized gains (0.06) (0.10) (0.02)
Net asset value at end of period $ 16.04 $ 11.67 $ 11.17
Total return 37.98% 5.37% 11.86%
Net assets at end of period $ 1,077,120 $ 685,191 $ 514,090
Ratio of expenses to average net assets
Before expense reimbursement and waived fees 5.38% 5.79% 7.40%(D)
After expense reimbursement and waived fees 2.62% 2.61% 2.49%(D)
Ratio of net investment loss to average net assets (1.53)% (1.40)% (0.69)%(D)
Portfolio turnover rate 14% 15% 7%
Average commission rate per share (C) $ 0.0777 $ 0.0877 --
(A) Represents the period from March 1, 1997 to the date of conversion to Class A shares (February 27, 1998) (Note 5).
(B) Represents the period from the commencement of operations (April 4, 1995) through February 29, 1996.
(C) Beginning with the year ended February 28, 1997, the Fund is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.
(D) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
February 28, 1998
<TABLE>
<S> <C> <C>
Market
Shares Value
COMMON STOCKS - 97.5%
Consumer, Cyclical - 17.8%
2,000 Boyd Gaming Corp. (a) $ 15,875
8,400 Cavalier Homes, Inc. 94,500
2,000 Chromcraft Revington, Inc. (a) 71,250
2,000 Cooper Tire and Rubber Co. 46,125
7,125 Fred's, Inc. 182,133
1,000 Hancock Fabrics, Inc. 16,313
4,000 Proffitt's, Inc. (a) 135,500
1,500 Southwest Airlines, Inc. 43,031
2,000 Stein Mart, Inc. (a) 64,625
1,000 Sunbeam Corp., Inc. 41,375
2,200 Wireless One, Inc. (a) 2,750
713,477
Industrial - 13.8%
700 Cooper Industries, Inc. 39,287
8,000 Delta & Pine Land Co. (b) 303,500
7,000 Halter & Marine Group, Inc. (a) 137,375
4,500 KLLM Transport Services, Inc. (a) 54,000
600 Standex International Corp. 18,638
552,800
Financial Services - 13.2%
1,400 BancorpSouth, Inc. 61,075
1,500 Community Federal Bancorp, Inc. 28,031
1,000 Deposit Guaranty Corp. 55,438
1,500 Eastgroup Properties, Inc. 30,375
1,150 Hancock Holding Co. 70,725
3,000 Parkway Properties, Inc. 97,875
3,163 Search Financial, Inc. (a) 494
2,000 Trustmark Corp. 87,750
1,549 Union Planters Corp. (b) 95,748
527,511
Technology - 12.7%
18,000 Mobile Telecommunication Technologies Corp. (a) 405,000
200 Netscape Communications Corp. (a) 3,875
750 Nichols Research Corp. (a) 19,969
1,000 Powertel, Inc. (a) 22,500
1,000 Texas Instruments, Inc. 57,875
509,219
<PAGE>
Market
Shares Value
Basic Materials - 10.6%
1,500 Birmingham Steel Corp. $ 26,344
6,000 ChemFirst, Inc. 158,625
250 Georgia Pacific Corp. 14,672
250 Georgia Pacific Corp. (Timber Group) 5,703
800 International Paper Co. 37,300
7,000 Mississippi Chemical Corp. 129,500
1,000 Quanex Corp. 33,125
1,500 Stone Container Corp. (a) 16,875
422,144
Energy - 10.1%
9,000 Callon Petroleum Co. (a) 141,750
7,000 Coho Energy, Inc. (a) 55,562
5,000 Friede Goldman International, Inc. (a) 151,875
2,000 Rowan Companies, Inc. (a) 56,375
405,562
Consumer, Non-Cyclical - 9.7%
1,000 Baxter International, Inc. 56,625
7,500 Cal-Maine Foods, Inc. (a) 47,813
4,500 Gulf South Medical Supply, Inc. (a) 162,562
1,000 PhyCor, Inc. (a) 25,718
1,000 Sanderson Farms, Inc. 10,875
1,500 Sara Lee Corp. 84,750
388,343
Utilities - 9.6%
10,050 WorldCom, Inc. (a) 383,785
Total Common Stocks (Cost $2,677,797) $ 3,902,841
Money Market Funds - 1.9%
74,362 Performance Trust Money Market Fund $ 74,362
(Cost $74,362)
Total Investments at Value - 99.4% $ 3,977,203
(Cost $2,752,159)
Other Assets in Excess of Liabilities - 0.6% 23,287
Net Assets - 100.0% $ 4,000,490
</TABLE>
(a)Non-income producing security.
(b)Security covers a call option.
See accompanying notes to financial statements.
<PAGE>
Mississippi Opportunity Fund
Schedule of Open Options Written
February 28, 1998
Market
Value of Premiums
Contracts Option Received
Covered Call Options
20 Delta & Pine Land Co., $ 14,250 $ 5,867
5/16/1998 at $35
10 Union Planters Corp., 7,250 8,494
5/16/1998 at $55
$ 21,500 14,361
See accompanying notes to financial statements.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
The Mississippi Opportunity Fund is a non-diversified, open-end series of the
Maplewood Investment Trust (the Trust), a registered management investment
company under the Investment Company Act of 1940 (the 1940 Act). The Trust was
organized as a Massachusetts business trust on August 12, 1992. The Fund began
operations on April 4, 1995.
The Fund's investment objective is to provide long-term capital growth by
investing primarily in the common stocks and other equity securities of
publicly-traded companies headquartered in Mississippi, and those companies
having a significant presence in the state.
The Fund currently offers only Class A shares sold subject to a maximum
front-end sales load of 3.50% and a distribution fee of up to 0.50% of average
daily net assets.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a securities exchange are valued
based upon the closing price on the principal exchange where the security is
traded.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The maximum offering price per share is equal to
net asset value per share plus a sales load equal to 3.63% of the net asset
value (or 3.50% of the offering price). The redemption price per share is equal
to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date.
Distributions to shareholders -- Dividends arising from net investment income,
if any, are declared and paid annually to shareholders of the Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. Income distributions and capital gain distributions are determined in
accordance with income tax regulations.
Organization expenses -- Expenses of organization have been capitalized and are
being amortized on a straight-line basis over five years. In the event any of
the initial shares of the Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by a pro rata portion of any unamortized
organization expenses in the same proportion as the number of initial shares
being redeemed bears to the number of initial shares of the Fund outstanding at
the time of the redemption.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
Allocation between classes -- During the period in which both Class A shares and
Class C shares were offered, investment income earned, realized capital gains
and losses and unrealized appreciation and depreciation were allocated daily to
each class of shares based upon its proportionate share of total net assets of
the Fund. Distribution expenses were charged directly to the class incurring the
expense. Common expenses which were not attributable to a specific class were
allocated daily to each class of shares based upon its proportionate share of
total net assets of the Fund.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of $2,752,159 and premiums received for covered call options of
$14,361 as of February 28, 1998:
Gross unrealized appreciation.....................$ 1,492,878
Gross unrealized depreciation..................... ( 274,973)
Net unrealized appreciation.........................$ 1,217,905
Reclassification of capital accounts -- For the year ended February 28, 1998,
the Fund had a net investment loss of $36,000 which was reclassified to paid-in
capital on the Statement of Assets and Liabilities. Such reclassification, the
result of permanent differences between financial statement and income tax
reporting requirements, has no effect on net assets or net asset value per
share.
Option transactions -- The Fund may write covered call options for which
premiums are received and are recorded as liabilities, and subsequently valued
daily at the closing prices on their primary exchanges. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised increase the proceeds used to calculate
the realized gain or loss on the sale of the security. If a closing purchase
transaction is used to terminate the Fund's obligation on a call, a gain or loss
will be realized, depending upon whether the price of the closing purchase
transaction is more or less than the premium previously received on the call
written. If the market price of a stock subject to a call option rises above the
exercise price of the option, the Fund will lose the opportunity for further
appreciation on that security.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
2. INVESTMENT TRANSACTIONS
During the year ended February 28, 1998, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $849,187 and $417,059, respectively.
3. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of Vector Money Management, Inc.
(the Adviser) or Countrywide Fund Services, Inc. (CFS), the administrator,
transfer agent and accounting services agent for the Fund.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by the Adviser under the terms of an
Investment Advisory Agreement. Under the Investment Advisory Agreement, the Fund
pays the Adviser a fee, which is computed and accrued daily and paid monthly at
an annual rate of 0.875% on its average daily net assets. The Adviser currently
intends to waive its advisory fees and reimburse expenses of the Fund to the
extent necessary to limit the total operating expenses of the Fund to 2.125% of
average daily net assets. For the year ended February 28, 1998, the Adviser
waived its entire advisory fee of $26,881 and reimbursed the Fund $57,959 for
other operating expenses.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, CFS supplies non-investment
related administrative and compliance services for the Fund. CFS supervises the
preparation of tax returns, reports to shareholders, reports to and filings with
the Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees. For these services, CFS
receives a monthly fee from the Fund at an annual rate of 0.15% on its average
daily net assets up to $50 million; 0.125% on the next $50 million of such net
assets; and 0.10% on such net assets in excess of $100 million, subject to a
$1,000 minimum monthly fee. For the year ended February 28, 1998, CFS earned
$12,000 of fees under the Agreement.
TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT
Under the terms of a Transfer Agent and Shareholder Servicing Agreement, CFS
maintains the records of each shareholder's account, answers shareholders'
inquiries concerning their accounts, processes purchases and redemptions of the
Fund's shares, acts as dividend and distribution disbursing agent and performs
other shareholder service functions. For these services, CFS receives a monthly
fee based on the number of shareholder accounts in the Fund, subject to a $1,000
minimum monthly fee for the Fund, or for each class of shares of the Fund, as
applicable. In addition, the Fund pays out-of-pocket expenses, including but not
limited to, postage and supplies. For the year ended February 28, 1998, CFS
earned $24,000 of fees under the Agreement.
ACCOUNTING SERVICES AGREEMENT
Under the terms of an Accounting Services Agreement, CFS calculates the daily
net asset value per share and maintains the financial books and records of the
Fund. For these services, CFS receives a monthly fee of $2,000 from the Fund.
For the year ended February 28, 1998, CFS earned $24,000 of fees under the
Agreement.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
DISTRIBUTION PLAN
The Trust has adopted a Distribution Plan (the Plan) for the Fund pursuant to
Rule 12b-1 under the 1940 Act. The Plan provides that the Fund may incur certain
costs related to the distribution of Fund shares, not to exceed 0.50% and 1.00%
of average daily net assets for Class A shares and Class C shares, respectively.
For the year ended February 28, 1998, the Fund incurred $11,081 and $8,518 of
distribution expenses on Class A shares and Class C shares, respectively, under
the Plan.
4. Covered Call Options
A summary of covered call option contracts during the year ended February 28,
1998 is as follows:
Number of Option
Options Premiums
Options outstanding at beginning of year.............. -- --
Options written........................................ 238 75,786
Options cancelled in closing purchase transactions.... (93) (38,086)
Options expired......................................... (115) (23,339)
------- --------
Options outstanding at end of year..................... 30 $ 14,361
======= =========
5. Mandatory Redemption of Class C Shares
Prior to February 27, 1998, the Fund offered two classes of shares: Class A
shares (sold subject to a maximum front-end sales load of 3.50% and a
distribution fee of up to 0.50% of average daily net assets) and Class C shares
(sold subject to a distribution fee of up to 1% of average daily net assets). On
February 27, 1998, all outstanding Class C shares were redeemed pursuant to a
mandatory redemption program authorized by the Board of Trustees.
<PAGE>
KPMG Peat Marwick LLP
1600 PNC Center
201 East Fifth Street
Cincinnati, OH 45202
Dayton, OH
Independent Auditors' Report
The Board of Trustees and Shareholders
The Maplewood Investment Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Mississippi Opportunity Fund
(the "Fund"), a series of the Maplewood Investment Trust, as of
February 28, 1998, and the related statement of operations, statements of
changes in net assets, and the financial highlights for each of the periods
indicated herein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
February 28, 1998 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Mississippi Opportunity Fund as of February 28, 1998, and the results of its
operations, changes in its net assets and financial highlights for the periods
indicated herein, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
March 27, 1998
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
----------------------------------
(a) Financial Statements
Included in Part A:
Financial Highlights For the Years Ended February 28,
1998 and 1997 and February 29, 1996
Included in Part B:
Statements of Assets and Liabilities as of February 28,
1998
Statements of Operations For the Year Ended February 28,
1998
Statements of Changes in Net Assets For the Years Ended
February 28, 1998 and 1997
Financial Highlights For the Years Ended February 28, 1998
and 1997 and February 29, 1996
Portfolio of Investments as of February 28, 1998
Notes to Financial Statements
Independent Auditors' Report
(b) Exhibits:
1. Amended and Restated Declaration of Trust*
2. Amended and Restated Bylaws*
3. Not Applicable
4. Not Applicable
5. Investment Advisory Agreement*
6. Form of Underwriting Agreement**
Form of Dealer Agreement**
7. Not Applicable
8. Custody Agreement with Trustmark National Bank*
<PAGE>
9. Administration Agreement*
Accounting Services Agreement*
Transfer, Dividend Disbursing, Shareholder
Service and Plan Agency Agreement*
10. Opinion and Consent of Counsel*
11. Consent of Accountants**
12. Not Applicable
13. Purchase Agreement*
14. Not Applicable
15. Distribution Plan*
16. Not Applicable
17. Financial Data Schedule**
18. Amended and Restated Rule 18f-3 Multi-Class Plan*
-----------
* Previously filed as Exhibit to Registration Statement on
Form N-1A
** Filed herewith
Item 25. Persons Controlled by or under Common Control with
--------------------------------------------------
Registrant
----------
No person is directly or indirectly controlled by or under
common control with the Registrant.
Item 26. Number of Holders of Securities
-------------------------------
The number of holders of shares of beneficial interest of the
Mississippi Opportunity Fund as of April 30, 1998 is 264.
<PAGE>
Item 27. Indemnification.
----------------
Article V of the Registrant's Amended and Restated Declaration
of Trust provides for indemnification of officers and Trustees
as follows:
"SECTION 5.2 LIMITATION OF PERSONAL LIABILITY OF
TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS OF THE TRUST.
Provided they have acted under the belief that their
actions are in the best interest of the Trust, the
Trustees and officers shall not be responsible for or
liable in any event for neglect or wrongdoing by them
or any officer, agent, employee, investment advisor or
principal underwriter of the Trust or of any entity
providing administrative services for the Trust, but
nothing herein contained shall protect any Trustee or
officer against any liability to which he would
otherwise be subject by reason of willful malfeasance,
bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office.
SECTION 5.4 MANDATORY INDEMNIFICATION. (a) Subject only
to the provisions hereof, every person who is or has
been a Trustee, officer, employee or agent of the Trust
and every person who serves at the Trustees request as
director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise shall be indemnified by the Trust to the
fullest extent permitted by law against all liabilities
and against all expenses reasonably incurred or paid by
him in connection with any debt, claim, action, demand,
suit, proceeding, judgment, decree, liability or
obligation of any kind in which he becomes involved as
a party or otherwise or is threatened by virtue of his
being or having been a Trustee, officer, employee or
agent of the Trust or of another corporation,
partnership, joint venture, trust or other enterprise
at the request of the Trust and against amounts paid or
incurred by him in the compromise or settlement
thereof.
(b) The words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions,
suits or proceedings (civil, criminal,
administrative, legislative, investigative or
other, including appeals), actual or threatened,
and the words "liabilities" and "expenses" shall
include, without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
<PAGE>
(c) No indemnification shall be provided
hereunder to a Trustee or officer:
(i) against any liability to the Trust or
the Shareholders by reason of willful
misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in
the conduct of his office ("disabling
conduct");
(ii) with respect to any matter as to which
he shall, by the court or other body by or
before which the proceeding was brought or
engaged, have been finally adjudicated to be
liable by reason of disabling conduct;
(iii) in the absence of a final adjudication
on the merits that such Trustee or officer
did not engage in disabling conduct, unless
a reasonable determination, based upon a
review of the facts that the person to be
indemnified is not liable by reason of such
conduct, is made:
(A) by vote of a majority of a quorum of
the Trustees who are neither Interested
Persons nor parties to the proceedings;
or
(B) by independent legal counsel, in a
written opinion.
(d) The rights of indemnification herein
provided may be insured against by policies
maintained by the Trust, shall be severable,
shall not affect any other rights to which
any Trustee, officer, employee or agent may
now or hereafter be entitled, shall continue
as to a person who has ceased to be such
Trustee, officer, employee, or agent and
shall inure to the benefit of the heirs,
executors and administrators of such a
person; provided, however, that no person may
satisfy any right of indemnity or
reimbursement granted herein except out of
the property of the Trust, and no other
person shall be personally liable to provide
indemnity or reimbursement hereunder (except
an insurer or surety or person otherwise
bound by contract).
<PAGE>
(e) Expenses in connection with the
preparation and presentation of a defense to
any claim, action, suit or proceeding of the
character described in paragraph (a) of this
Section 5.4 may be paid by the Trust prior to
final disposition thereof upon receipt of a
written undertaking by or on behalf of the
Trustee, officer, employee or agent to
reimburse the Trust if it is ultimately
determined under this Section 5.4 that he is
not entitled to indemnification. Such
undertaking shall be secured by a surety bond
or other suitable insurance or such security
as the Trustees shall require unless a
majority of a quorum of the Trustees who are
neither Interested Persons nor parties to the
proceeding, or independent legal counsel in a
written opinion, shall have determined, based
on readily available facts, that there is
reason to believe that the indemnitee
ultimately will be found to be entitled to
indemnification.
SECTION 5.7 RELIANCE ON EXPERTS, ETC. Each
Trustee and officer or employee of the Trust
shall, in the performance of his duties, be
fully and completely justified and protected
with regard to any act or any failure to act
resulting from reliance in good faith upon
the books of account or other records of the
Trust, upon an opinion of counsel, or upon
reports made to the Trust by any of its
officers or employees or by any advisor,
administrator, manager, distributor, selected
dealer, accountant, appraiser or other expert
or consultant selected with reasonable care
by the Trustee, officers or employees of the
Trust, regardless of whether such counsel or
expert may also be a Trustee.
The Registrant maintains a standard mutual fund and investment
advisory professional and directors and officers liability
policy. The policy provides coverage to the Registrant, its
Trustees and officers. Coverage under the policy will include
losses by reason of any act, error, omission, misstatement,
misleading statement, neglect or breach of duty.
<PAGE>
The Advisory Agreement for the Mississippi Opportunity Fund
provides for indemnification of the Advisor as follows:
Subject to the limitations set forth in this
Section 8(b), the Fund shall indemnify,
defend and hold harmless (from the assets of
the Trust or Trusts to which the conduct in
question relates) the Advisor against all
loss, damage and liability, including but not
limited to amounts paid in satisfaction of
judgments, in compromise or as fines and
penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by
the Advisor in connection with the defense or
disposition of any action, suit or other
proceeding, whether civil or criminal, before
any court or administrative or legislative
body, related to or resulting from this
Agreement or the performance of services
hereunder, except with respect to any matter
as to which it has been determined that the
loss, damage or liability is a direct result
of (i) a breach of fiduciary duty with
respect to the receipt of compensation for
services; or (ii) willful misfeasance, bad
faith or gross negligence on the part of the
Advisor in the performance of its duties or
from reckless disregard by it of its duties
under this Agreement (either and both of the
conduct described in clauses (i) and (ii)
above being referred to hereinafter as
"Disabling Conduct"). A determination that
the Advisor is entitled to indemnification
may be made by (i) a final decision on the
merits by a court or other body before whom
the proceeding was brought that the Advisor
was not liable by reason of Disabling
Conduct, (ii) dismissal of a court action or
an administrative proceeding against the
Advisor for insufficiency of evidence of
Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the
facts, that the Advisor was not liable by
reason of Disabling Conduct by (a) vote of a
majority of a quorum of Trustees who are
neither "interested persons" of the Fund as
the quoted phrase is defined in Section
2(a)(19) of the 1940 Act nor parties to the
action, suit or other proceeding on the same
or similar grounds that is then or has been
pending or threatened (such quorum of such
Trustees being referred to hereinafter as the
"Independent Trustees"), or (b) an
independent legal counsel in a written
opinion. Expenses, including accountants' and
counsel fees so incurred by the Advisor (but
excluding amounts paid in satisfaction of
judgments, in compromise or as fines or
penalties), may be paid from time to time by
<PAGE>
the Fund or Trust to which the conduct in
question related in advance of the final
disposition of any such action, suit or
proceeding; provided, that the Advisor shall
have undertaken to repay the amounts so paid
if it is ultimately determined that
indemnification of such expenses is not
authorized under this Section 8(b) and if (i)
the Advisor shall have provided security for
such undertaking, (ii) the Fund shall be
insured against losses arising by reason of
any lawful advances, or (iii) a majority of
the Independent Trustees, or an independent
legal counsel in a written opinion, shall
have determined, based on a review of readily
available facts (as opposed to a full trial-
type inquiry), that there is reason to
believe that the Advisor ultimately will be
entitled to indemnification hereunder.
As to any matter disposed of by a compromise
payment by the Advisor referred to in this
Section 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for
said payment or for any other expenses shall
be provided unless such indemnification shall
be approved (i) by a majority of the
Independent Trustees or (ii) by an
independent legal counsel in a written
opinion. Approval by the Independent Trustees
pursuant to clause (i) shall not prevent the
recovery from the Advisor of any amount paid
to the Advisor in accordance with either of
such clauses as indemnification if the
Advisor is subsequently adjudicated by a
court of competent jurisdiction not to have
acted in good faith in the reasonable belief
that the Advisor's action was in or not
opposed to the best interests of the Fund or
to have been liable to the Fund or its
Shareholders by reason of willful
misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in
its conduct under the Agreement.
The right of indemnification provided by this
Section 8(b) shall not be exclusive of or
affect any of the rights to which the Advisor
may be entitled. Nothing contained in this
Section 8(b) shall affect any rights to
indemnification to which Trustees, officers
or other personnel of the Fund, and other
persons may be entitled by contract or
otherwise under law, nor the power of the
Fund to purchase and maintain liability
insurance on behalf of any such person.
<PAGE>
The Board of Trustees of the Trust shall take
all such action as may be necessary and
appropriate to authorize the Fund hereunder
to pay the indemnification required by the
Section 8(b) including, without limitation,
to the extent needed, to determine whether
the Advisor is entitled to indemnification
hereunder and the reasonable amount of any
indemnity due it hereunder, or employ
independent legal counsel for that purpose."
The Underwriting Agreement provides that the Underwriter, its
directors, officers, employees, shareholders and control
persons shall not be liable for any error of judgment or
mistake of law or for any loss suffered by Registrant in
connection with the matters to which the Agreement relates,
except a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of any of such persons in the
performance of Underwriter's duties or from the reckless
disregard by any of such persons of Underwriter's obligations
and duties under the Agreement. Registrant will advance
attorneys' fees or other expenses incurred by any such person
in defending a proceeding, upon the undertaking by or on
behalf of such person to repay the advance if it is ultimately
determined that such person is not entitled to
indemnification.
Item 28. Business and Other Connections of Investment Advisor
------------------------------------------------------
Vector Money Management, Inc. ("Vector"), a
registered investment advisor, provides investment
advisory services to the Mississippi Opportunity
Fund. Vector also provides investment advisory
services to individual and institutional accounts.
Ashby M. Foote III is the Chief Executive Officer and
President of Vector and President of the Trust.
Item 29. Principal Underwriters
- ------- ----------------------
(a) CW Fund Distributors, Inc. also acts as underwriter for
the Milestone Funds, Brundage, Story and Rose Investment
Trust, Profit Funds Investment Trust, Firsthand Funds,
the Lake Shore Family of Funds, UC Investment Trust and The
James Advantage Funds.
(b) The following list sets forth the directors and executive
officers of CW Fund Distributors, Inc., the Trust's
underwriter. Unless otherwise noted with an asterisk(*),
the address of the persons named below is 312 Walnut
Street, Cincinnati, Ohio 45202.
*The address is 4500 Park Granada Road, Calabasas, California
91302.
<PAGE>
Position With Position With
Name Underwriter Registrant
---- ------------- -------------
*Angelo R. Mozilo Chairman/Director None
Robert H. Leshner Vice Chairman/ None
Director
*Andrew S. Bielanski Director None
*Thomas H. Boone Director None
*Marshall M. Gates Director None
Robert G. Dorsey President Vice President
Maryellen Peretzky Vice President None
John F. Splain Vice President, Secretary
Secretary and
General Counsel
M. Kathleen Leugers Vice President None
Mark J. Seger Vice President Treasurer
Christina H. Kelso Vice President None
Terrie A. Wiedenheft Treasurer None
(c) None
Item 30. Location of Accounts and Records
- ------- --------------------------------
The Registrant maintains the records required by Section 31(a)
of the Investment Company Act of 1940 and Rules 31a-1 to 31a-3
inclusive thereunder at the principal executive office of its
investment advisors. Certain records, including records relating
to the Registrant's shareholders and the physical possession of
its securities, may be maintained pursuant to Rule 31a-3 at the
office of the Registrant's transfer, accounting and dividend
disbursing agent and its custodians.
Item 31. Management Services
- ------- -------------------
None
Item 32. Undertakings
- ------- ------------
(a) Not Applicable
(b) Not Applicable
(c) The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest report to shareholders, upon
request and without charge.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed below on its behalf by the undersigned,
thereunto duly authorized, in the City of Cincinnati and the State of Ohio on
the 30th day of June, 1998.
MAPLEWOOD INVESTMENT TRUST,
A SERIES COMPANY
By: /s/ John F. Splain
----------------------------
John F. Splain,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
Chairman
O. James Peterson III* and Trustee
/s/ Mark J. Seger Treasurer June 30, 1998
- ----------------------
Mark J. Seger
Jack E. Brinson* Trustee
David S. Brollier* Trustee
Christopher J. Smith* Trustee
By: /s/ John F. Splain
--------------------
John F. Splain*
Attorney-in-Fact
June 30, 1998
EXHIBIT INDEX
1. Form of Underwriting Agreement
2. Form of Dealer's Agreement
3. Consent of KPMG Peat Marwick LLP
4. Financial Data Schedule
UNDERWRITING AGREEMENT
This Agreement made as of July __, 1998 by and between Maplewood
Investment Trust, a series company (the "Trust"), and CW Fund Distributors,
Inc., a Delaware corporation ("Underwriter").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the
Securities and Exchange Commission and a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of beneficial
interest (the "Shares") of each series of shares of the Trust (the "Series");
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment.
The Trust hereby appoints Underwriter as its exclusive agent
for the distribution of the Shares, and Underwriter hereby accepts such
appointment under the terms of this Agreement. While this Agreement is in force,
the Trust shall not sell any
<PAGE>
Shares except on the terms set forth in this Agreement. Notwithstanding any
other provision hereof, the Trust may terminate, suspend or withdraw the
offering of Shares whenever, in its sole discretion, it deems such action to be
desirable.
2. Sale and Repurchase of Shares.
(a) Underwriter will have the right, as agent for the Trust,
to enter into dealer agreements with responsible investment dealers, and to sell
Shares to such investment dealers against orders therefor at the public offering
price (as defined in subparagraph 2(e) hereof) less a discount determined by
Underwriter, which discount shall not exceed the amount of the sales charge
stated in the Trust's effective Registration Statement on Form N-1A under the
Securities Act of 1933, as amended, including the then current prospectus and
statement of additional information (the "Registration Statement"). Upon receipt
of an order to purchase Shares from a dealer with whom Underwriter has a dealer
agreement, Underwriter will promptly cause such order to be filled by the Trust.
(b) Underwriter will also have the right, as agent for the
Trust, to sell such Shares to the public against orders therefor at the public
offering price.
(c) Underwriter will also have the right, as agent for the
Trust, to sell Shares at their net asset value to such persons as may be
approved by the Trustees of the Trust, all such sales to comply with the
provisions of the Act and the rules and
- 2 -
<PAGE>
regulations of the Securities and Exchange Commission promulgated thereunder.
(d) Underwriter will also have the right to take, as agent for
the Trust, all actions which, in Underwriter's judgment, are necessary to carry
into effect the distribution of the Shares.
(e) The public offering price for the Shares of each Series
shall be the respective net asset value of the Shares of that Series then in
effect, plus any applicable sales charge determined in the manner set forth in
the Registration Statement or as permitted by the Act and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder. In
no event shall any applicable sales charge exceed the maximum sales charge
permitted by the Rules of Fair Practice of the NASD.
(f) The net asset value of the Shares of each Series shall be
determined in the manner provided in the Registration Statement, and when
determined shall be applicable to transactions as provided for in the
Registration Statement. The net asset value of the Shares of each Series shall
be calculated by the Trust or by another entity on behalf of the Trust.
Underwriter shall have no duty to inquire into or liability for the accuracy of
the net asset value per Share as calculated.
(g) On every sale, the Trust shall receive the applicable net
asset value of the Shares promptly, but in no event later than the third
business day following the date on
- 3 -
<PAGE>
which Underwriter shall have received an order for the purchase of the Shares.
Underwriter shall have the right to retain the sales charge less any applicable
dealer discount.
(h) Upon receipt of purchase instructions, Underwriter will
transmit such instructions to the Trust or its transfer agent for registration
of the Shares purchased.
(i) Nothing in this Agreement shall prevent Underwriter or any
affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor for any other person, firm or corporation (including
other investment companies) or in any way limit or restrict Underwriter or any
such affiliated person from buying, selling or trading any securities for its or
their own account or for the accounts of others for whom it or they may be
acting; provided, however, that Underwriter expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
(j) Underwriter, as agent of and for the account of the Trust,
may repurchase the Shares at such prices and upon such terms and conditions as
shall be specified in the Registration Statement.
3. Sale of Shares by the Trust.
The Trust reserves the right to issue any Shares at any time
directly to the holders of Shares ("Shareholders"), to sell Shares to its
Shareholders or to other persons approved by
- 4 -
<PAGE>
Underwriter at not less than net asset value and to issue Shares in exchange for
substantially all the assets of any corporation or trust or for the shares of
any corporation or trust.
4. Basis of Sale of Shares.
Underwriter does not agree to sell any specific number of
Shares. Underwriter, as agent for the Trust, undertakes to sell Shares on a best
efforts basis only against orders therefor.
5. Rules of NASD, etc.
(a) Underwriter will conform to the Rules of Fair Practice of
the NASD and the securities laws of any jurisdiction in which it sells, directly
or indirectly, any Shares.
(b) Underwriter will require each dealer with whom Underwriter
has a dealer agreement to conform to the applicable provisions hereof and the
Registration Statement with respect to the public offering price of the Shares,
and neither Underwriter nor any such dealers shall withhold the placing of
purchase orders so as to make a profit thereby.
(c) Underwriter agrees to furnish to the Trust sufficient
copies of any agreements, plans or other materials it intends to use in
connection with any sales of Shares in adequate time for the Trust to file and
clear them with the proper authorities before they are put in use, and not to
use them until so filed and cleared.
(d) Underwriter, at its own expense, will qualify as dealer or
broker, or otherwise, under all applicable State or
- 5 -
<PAGE>
federal laws required in order that Shares may be sold in such States as may be
mutually agreed upon by the parties.
(e) Underwriter shall not make, or permit any representative,
broker or dealer to make, in connection with any sale or solicitation of a sale
of the Shares, any representations concerning the Shares except those contained
in the then current prospectus and statement of additional information covering
the Shares and in printed information approved by the Trust as information
supplemental to such prospectus and statement of additional information. Copies
of the then effective prospectus and statement of additional information and any
such printed supplemental information will be supplied by the Trust to
Underwriter in reasonable quantities upon request.
6. Records to be Supplied by Trust.
The Trust shall furnish to Underwriter copies of all
information, financial statements and other papers which Underwriter may
reasonably request for use in connection with the distribution of the Shares,
and this shall include, but shall not be limited to, one certified copy, upon
request by Underwriter, of all financial statements prepared for the Trust by
independent public accountants.
7. Expenses.
In the performance of its obligations under this Agreement,
Underwriter will pay only the costs incurred in qualifying as a broker or dealer
under state and federal laws and
- 6 -
<PAGE>
in establishing and maintaining its relationships with the dealers selling the
Shares. All other costs in connection with the offering of the Shares will be
paid by the Trust or the Trust's investment adviser (the "Adviser") in
accordance with agreements between them as permitted by applicable law,
including the Act and rules and regulations promulgated thereunder. These costs
include, but are not limited to, licensing fees, insurance premiums, filing
fees, travel and such other expenses as may be incurred by Underwriter on behalf
of the Trust.
8. Indemnification of Trust.
Underwriter, to the extent of the net commission received by
it from the sale of Shares but to no greater amount, agrees to indemnify and
hold harmless the Trust, the Adviser and each person who has been, is, or may
hereafter be a trustee, director, officer, employee, partner, shareholder or
control person of the Trust or the Adviser, against any loss, damage or expense
(including the reasonable costs of investigation) reasonably incurred by any of
them in connection with any claim or in connection with any action, suit or
proceeding to which any of them may be a party, which arises out of or is
alleged to arise out of or is based upon any untrue statement or alleged untrue
statement of a material fact, or the omission or alleged omission to state a
material fact necessary to make the statements not misleading, on the part of
Underwriter or any agent or employee of Underwriter or any other person for
whose
- 7 -
<PAGE>
acts Underwriter is responsible, unless such statement or omission was made in
reliance upon written information furnished by the Trust or the Adviser.
Underwriter likewise, to the extent of the net commission received by it from
the sale of Shares but to no greater amount, agrees to indemnify and hold
harmless the Trust, the Adviser and each such person in connection with any
claim or in connection with any action, suit or proceeding which arises out of
or is alleged to arise out of Underwriter's negligence with respect to its
services, if any, rendered in connection with investment, reinvestment,
automatic withdrawal and other plans for Shares. The term "expenses" for
purposes of this and the next paragraph includes amounts paid in satisfaction of
judgments or in settlements which are made with Underwriter's consent. The
foregoing rights of indemnification shall be in addition to any other rights to
which the Trust, the Adviser or each such person may be entitled as a matter of
law.
9. Liability of Underwriter.
Underwriter, its directors, officers, employees, shareholders
and control persons shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Trust in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or negligence on the part of any of such persons in the performance of
Underwriter's duties or from the reckless disregard by any of such persons of
Underwriter's obligations and
- 8 -
<PAGE>
duties under this Agreement. The Trust will advance attorneys' fees or other
expenses incurred by any such person in defending a proceeding, upon the
undertaking by or on behalf of such person to repay the advance if it is
ultimately determined that such person is not entitled to indemnification. Any
person employed by Underwriter who may also be or become an officer or employee
of the Trust shall be deemed, when acting within the scope of his employment by
the Trust, to be acting in such employment solely for the Trust and not as an
employee or agent of Underwriter.
10. Termination and Amendment of this Agreement.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment. This Agreement may be amended only if
such amendment is approved (i) by Underwriter, (ii) either by action of the
Board of Trustees of the Trust or at a meeting of the Shareholders of the Trust
by the affirmative vote of a majority of the outstanding Shares, and (iii) by a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of Underwriter by vote cast in person at a meeting called for the
purpose of voting on such approval.
Either the Trust or Underwriter may at any time terminate this
Agreement on sixty (60) days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party.
- 9 -
<PAGE>
11. Effective Period of this Agreement.
This Agreement shall take effect upon its execution and shall
remain in full force and effect for a period of two (2) years from the date of
its execution (unless terminated automatically as set forth in Section 10), and
from year to year thereafter, subject to annual approval (i) by Underwriter,
(ii) by the Board of Trustees of the Trust or a vote of a majority of the
outstanding Shares, and (iii) by a majority of the Trustees of the Trust who
are not interested persons of the Trust or of Underwriter by vote cast in person
at a meeting called for the purpose of voting on such approval.
12. Limitation of Liability.
It is expressly agreed that 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 bind only the trust
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 officer of the
Trust, acting as such, and neither such authorization by such 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 trust property
- 10 -
<PAGE>
of the Trust as provided in its Agreement and Declaration of Trust.
13. New Series.
The terms and provisions of this Agreement shall become
automatically applicable to any additional series of the Trust established
during the initial or renewal term of this Agreement.
14. Successor Investment Company.
Unless this Agreement has been terminated in accordance with
Paragraph 10, the terms and provisions of this Agreement shall become
automatically applicable to any investment company which is a successor to the
Trust as a result of reorganization, recapitalization or change of domicile.
15. Severability.
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
16. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of
the State of Delaware.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Act shall be resolved by reference to such term or provision of
the Act and to interpretation thereof, if any, by the United States courts or in
- 11 -
<PAGE>
the absence of any controlling decision of any such court, by rules, regulations
or orders of the Securities and Exchange Commission issued pursuant to said Act.
In addition, where the effect of a requirement of the Act, reflected in any
provision of this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
17. Notices.
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
for this purpose shall be 4266 I-55 North, Suite 102, Jackson, Mississippi 39211
and that the address of Underwriter for this purpose shall be 312 Walnut Street,
21st Floor, Cincinnati, Ohio 45202.
IN WITNESS WHEREOF, the Trust and Underwriter have each
caused this Agreement to be signed in duplicate on their behalf, all as of the
day and year first above written.
ATTEST: MAPLEWOOD INVESTMENT TRUST,
a series company
_____________________________ By: __________________________
Its: Chairman
ATTEST: CW FUND DISTRIBUTORS, INC.
_____________________________ By: __________________________
Its: President
- 12 -
CW FUND DISTRIBUTORS, INC.
312 WALNUT STREET, 21ST FLOOR
CINCINNATI, OHIO 45202
Dealer's Agreement
CW Fund Distributors, Inc. ("Underwriter") invites you, as a selected
dealer, to participate as principal in the distribution of shares (the "Shares")
of the Mississippi Opportunity Fund (the "Fund"), of which it is the exclusive
underwriter. Underwriter agrees to sell to you, subject to any limitations
imposed by the Fund, Shares issued by the Fund and to promptly confirm each sale
to you. All sales will be made according to the following terms:
1. All offerings of any of the Shares by you must be made at the public
offering prices, and shall be subject to the conditions of offering, set forth
in the then current Prospectus of the Fund and to the terms and conditions
herein set forth, and you agree to comply with all requirements applicable to
you of all applicable laws, including federal and state securities laws, the
rules and regulations of the Securities and Exchange Commission, and the Rules
of Fair Practice of the National Association of Securities Dealers, Inc. (the
"NASD"), including Section 24 of the Rules of Fair Practice of the NASD. You
will not offer the Shares for sale in any state or other jurisdiction where they
are not qualified for sale under the Blue Sky Laws and regulations of such state
or jurisdiction, or where you are not qualified to act as a dealer. Upon
application to Underwriter, Underwriter will inform you as to the states or
other jurisdictions in which Underwriter believes the Shares may legally be
sold.
2. (a) You will receive a discount from the public offering price
("concession") on all Shares purchased by you from Underwriter as indicated on
Schedule A, as it may be amended by Underwriter from time to time.
(b) In all transactions in open accounts in which you are
designated as Dealer of Record, you will receive the concessions as set forth on
Schedule A. You hereby authorize Underwriter to act as your agent in connection
with all transactions in open accounts in which you are designated as Dealer of
Record. All designations as Dealer of Record, and all authorizations of
Underwriter to act as your Agent pursuant thereto, shall cease upon the
termination of this Agreement or upon the investor's instructions to transfer
his open account to another Dealer of Record. No dealer concessions will be
allowed on purchases generating less than $1.00 in dealer concessions.
(c) As the exclusive underwriter of the Shares, Underwriter
reserves the privilege of revising the discounts specified on Schedule A at any
time by written notice.
3. Concessions will be paid to you at the address of your principal
office, as indicated below in your acceptance of this Agreement.
4. Underwriter reserves the right to cancel this Agreement at any time
without notice if any Shares shall be offered for sale by you at less than the
then current public offering prices determined by, or for, the Fund.
<PAGE>
5. All orders are subject to acceptance or rejection by Underwriter in
its sole discretion. The Underwriter reserves the right, in its discretion,
without notice, to suspend sales or withdraw the offering of Shares entirely.
6. Payment shall be made to the Fund and shall be received by its
Transfer Agent within three (3) business days after the acceptance of your order
or such shorter time as may be required by law. With respect to all Shares
ordered by you for which payment has not been received, you hereby assign and
pledge to Underwriter all of your right, title and interest in such Shares to
secure payment therefor. You appoint Underwriter as your agent to execute and
deliver all documents necessary to effectuate any of the transactions described
in this paragraph. If such payment is not received within the required time
period, Underwriter reserves the right, without notice, and at its option,
forthwith (a) to cancel the sale, (b) to sell the Shares ordered by you back to
the Fund, or (c) to assign your payment obligation, accompanied by all pledged
Shares, to any person. You agree that Underwriter may hold you responsible for
any loss, including loss of profit, suffered by the Fund, its Transfer Agent or
Underwriter, resulting from your failure to make payment within the required
time period.
7. No person is authorized to make any representations concerning
Shares of the Fund except those contained in the current applicable Prospectus
and Statement of Additional Information and in sales literature issued and
furnished by Underwriter supplemental to such Prospectus. Underwriter will
furnish additional copies of the current Prospectus and Statement of Additional
Information and such sales literature and other releases and information issued
by Underwriter in reasonable quantities upon request.
8. Under this Agreement, you act as principal and are not employed by
Underwriter as broker, agent or employee. You are not authorized to act for
Underwriter nor to make any representation on its behalf; and in purchasing or
selling Shares hereunder, you rely only upon the current Prospectus and
Statement of Additional Information furnished to you by Underwriter from time to
time and upon such written representations as may hereafter be made by
Underwriter to you over its signature.
9. You appoint the transfer agent for the Fund as your agent to execute
the purchase transactions of Shares in accordance with the terms and provisions
of any account, program, plan or service established or used by your customers
and to confirm each purchase to your customers on your behalf, and you guarantee
the legal capacity of your customers purchasing such Shares and any co-owners of
such Shares.
10. You will (a) maintain all records required by law relating to
transactions in the Shares, and upon the request of Underwriter, or the request
of the Fund, promptly make such records available to Underwriter or to the Fund
as are requested, and (b) promptly notify Underwriter if you experience any
difficulty in maintaining the records required in the foregoing clause in an
accurate and complete manner. In addition, you will establish appropriate
procedures and reporting forms and schedules, approved by Underwriter and by the
Fund, to enable the parties hereto and the Fund to identify all accounts opened
and maintained by your customers.
<PAGE>
11. Each party hereto represents that it is presently, and, at all times
during the term of this Agreement, will be, a member in good standing of the
NASD and agrees to abide by all its Rules of Fair Practice including, but not
limited to, the following provisions:
(a) You shall not withhold placing customers' orders for any Shares so
as to profit yourself as a result of such withholding. You shall not purchase
any Shares from Underwriter other than for investment, except for the purpose of
covering purchase orders already received.
(b) All conditional orders received by Underwriter must be at a
specified definite price.
(c) If any Shares purchased by you are repurchased by the Fund (or by
Underwriter for the account of the Fund) or are tendered for redemption within
seven business days after confirmation of the original sale of such Shares (1)
you agree to forthwith refund to Underwriter the full concession allowed to you
on the original sale, such refund to be paid by Underwriter to the Fund, and (2)
Underwriter shall forthwith pay to the Fund that part of the discount retained
by Underwriter on the original sale. Notice will be given to you of any such
repurchase or redemption within ten days of the date on which the repurchase or
redemption request is made.
(d) Neither Underwriter, as exclusive underwriter for the Fund, nor you
as principal, shall purchase any Shares from a record holder at a price lower
than the net asset value then quoted by, or for, the Fund. Nothing in this
sub-paragraph shall prevent you from selling Shares for the account of a record
holder to Underwriter or the Fund at the net asset value currently quoted by, or
for, the Fund and charging the investor a fair commission for handling the
transaction.
(e) You warrant on behalf of yourself and your registered
representatives and employees that any purchase of Shares at net asset value by
the same pursuant to the terms of the Prospectus of the applicable Fund is for
investment purposes only and not for purposes of resale. Shares so purchased may
be resold only to the Fund which issued them.
12. You agree that you will indemnify Underwriter, the Fund, the Fund's
transfer agent and the Fund's custodian and hold such persons harmless from any
claims or assertions relating to the lawfulness of your company's participation
in this Agreement and the transactions contemplated hereby or relating to any
activities of any persons or entities affiliated with your company which are
performed in connection with the discharge of your responsibilities under this
Agreement. If any such claims are asserted, the indemnified parties shall have
the right to engage in their own defense, including the selection and engagement
of legal counsel of their choosing, and all costs of such defense shall be borne
by you.
- 2 -
<PAGE>
13. This Agreement will automatically terminate in the event of its
assignment. Either party hereto may cancel this Agreement without penalty upon
ten days' written notice. This Agreement may also be terminated at any time
without penalty by the vote of a majority of the members of the Board of
Trustees of the Fund who are not "interested persons" (as such term is defined
in the Investment Company Act of 1940) and who have no direct or indirect
financial interest in the Fund's Distribution Expense Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 or any agreement relating to such
Plan, including this Agreement, or by a vote of a majority of the outstanding
voting securities of the Fund on ten days' written notice.
14. All communications to Underwriter should be sent to CW Fund
Distributors, Inc., 312 Walnut Street, 21st Floor, Cincinnati, Ohio 45202, or at
such other address as Underwriter may designate in writing. Any notice to you
shall be duly given if mailed or telegraphed to you at the address of your
principal office, as indicated below in your acceptance of this Agreement.
15. This Agreement supersedes any other agreement with you relating to
the offer and sale of the Shares, and relating to any other matter discussed
herein.
16. This Agreement shall be binding (i) upon placing your first order
with Underwriter for the purchase of Shares, or (ii) upon receipt by Underwriter
in Cincinnati, Ohio of a counterpart of this Agreement duly accepted and signed
by you, whichever shall occur first. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
17. The undersigned, executing this Agreement on behalf of Dealer,
hereby warrants and represents that he is duly authorized to so execute this
Agreement on behalf of Dealer.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return all copies of this Agreement to the
Underwriter.
ACCEPTED BY DEALER CW FUND DISTRIBUTORS, INC.
By: ________________________________________ By:__________________________
Authorized Signature
Date:_________________________
____________________________________________
Type or Print Name, Position
_____________________________________________
Dealer Name
_____________________________________________
Address
_____________________________________________
Address
______________________________________________
Phone
_______________________________________________
Date
- 3 -
Independent Auditors' Consent
The Shareholders and Trustees
of the Maplewood Investment Trust:
We consent to the inclusion of our report included herein and to the references
to our firm under the headings "Financial Highlights" in the Prospectus
and "Other Services-Auditors" in the Statement of Additional Information.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Cincinnati, Ohio
June 30, 1998
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