SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | |
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Pre-Effective Amendment No. | |
Post-Effective Amendment No. 6 |X|
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT | |
OF 1940
Amendment No. 7 |X|
(Check appropriate box or boxes.)
ANALYSTS INVESTMENT TRUST - FILE NOS. 33-64370 AND 811-7778
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9200 MONTGOMERY ROAD, BLDG. D, SUITE 13A, CINCINNATI, OHIO 45242
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(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (513) 984-3377
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DAVID LEE MANZLER, JR., 9200 MONTGOMERY ROAD, BLDG. D, SUITE 13A,
CINCINNATI, OHIO 45242
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(Name and Address of Agent for Service)
Release Date: DECEMBER 1, 1997
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It is proposed that this filing will become effective (check appropriate box):
| | immediately upon filing pursuant to paragraph (b)
| | on (date) pursuant to paragraph (b)
|X| 60 days after filing pursuant to paragraph (a)(1)
| | on (date) pursuant to paragraph (a)(1)
| | 75 days after filing pursuant to paragraph (a)(2)
| | on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
| | this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant continues its election made by the filing of its
Registration Statement, effective August 25, 1993, to register an indefinite
number and amount of securities under Rule 24f-2 of the Investment Company Act
of 1940. Registrant has filed, pursuant to paragraph b(1) of Rule 24f-2, Form
24F-2 for the fiscal year ended July 31, 1997 on September 29, 1997.
<PAGE>
ANALYSTS INVESTMENT TRUST
CROSS REFERENCE SHEET
FORM N-1A
ITEM SECTION IN EACH PROSPECTUS
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1.............................. Cover Page
2.............................. Fund Expenses
3.............................. Financial Highlights
4.............................. Operation of the Funds, Investment
Objectives and Strategies,
Investment Policies and Techniques,
General Information;
5.............................. Operation of the Funds, Trustees
and Officers
5a............................. Investment Performance
6.............................. Operation of the Funds, Cover Page,
Dividends and Distributions, Taxes,
General Information
7.............................. Operation of the Funds, How to
Invest in Each Fund, Share Price
Calculation, Exchange Privilege
8.............................. Redemption of Shares
9.............................. None
14.............................. Trustees and Officers
15.............................. General Information
16.............................. Trustees and Officers; Operation of
the Funds
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
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10.............................. Cover Page
11.............................. Table of Contents
12.............................. None
13.............................. Additional Information About Fund
Investments, Investment
Limitations, State Restrictions
14.............................. The Investment Adviser, Trustee
Compensation
15.............................. The Investment Adviser
16.............................. The Investment Adviser, Custodian
and Transfer Agent, Accountants
17.............................. Portfolio Transactions and
Brokerage
18.............................. Description of the Trust
19.............................. Determination of Share Price
20.............................. None
21.............................. The Investment Adviser
22.............................. Investment Performance
23.............................. Independent Auditors Report,
Financial Statements
<PAGE>
ANALYSTS INVESTMENT TRUST Prospectus dated December 1, 1997
Analysts Investment Trust is a family of two no-load mutual funds that offers
you a variety of investment opportunities. The Funds and their specific
investment objectives are listed below.
NO-LOAD MUTUAL FUNDS
The Analysts Funds are "no-load" investments which means there are no
sales charges or commissions. In addition, there are no deferred sales charges
which are borne by the shareholders. The minimum initial investment for each
fund is $1,000 ($25 for tax sheltered retirement plans).
ANALYSTS STOCK FUND
The investment objective of the Analysts Stock Fund is long term
capital appreciation. The Fund seeks to achieve its objective by investing
primarily in a broad range of common stocks believed by its Adviser, Equity
Analysts Inc., to have above average prospects for appreciation.
ANALYSTS FIXED INCOME FUND
The investment objective of the Fixed Income Fund is a high level of
income over the long term consistent with preservation of capital. The Fund
seeks to achieve its objective by investing primarily in a broad range of fixed
income securities.
This prospectus gives you information about Analysts Investment Trust
that you should be aware of before investing. Please read and retain this
prospectus for future reference. Additional information is included in the
Statement of Additional Information dated December 1, 1997, and filed with the
Securities and Exchange Commission. It is incorporated into this prospectus by
reference. To obtain a copy without charge, call or write:
ANALYSTS INVESTMENT TRUST
9200 MONTGOMERY ROAD
BUILDING D, SUITE 13A
CINCINNATI, OHIO 45242
(513) 984-3377
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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.
<PAGE>
FUND EXPENSES
The purpose of the table below is to assist shareholders in
understanding the costs and expenses that shareholders in each Fund will bear
directly or indirectly. The expense information is based on operating expenses
incurred during the most recent fiscal year. The expenses are expressed as a
percentage of average net assets. The Example should not be considered a
representation of future Fund performance or expenses, both of which may vary.
Shareholders should be aware that the Funds are no load funds and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Funds. Unlike most other mutual funds,
the Funds do not pay for transfer agency, pricing, custodial, auditing or legal
services, nor do they pay general administrative or other operating expenses.
The Adviser pays all of the expenses of each Fund except brokerage, taxes,
interest and extraordinary expenses.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
FIXED
STOCK INCOME
FUND FUND
---- ----
<S> <C> <C>
Maximum Sales Load...................................NONE NONE
Deferred Sales Load..................................NONE NONE
Redemption Fee.......................................NONE NONE
Exchange Fee.........................................NONE NONE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)(1)
- ------------------------------
Management Fees......................................2% 1.50%
12b-1 Fees...........................................NONE NONE
Total Fund Operating Expenses........................2% 1.50%
<FN>
(1) Each Fund's total operating expenses are equal to the management fee
paid to the Adviser because the Adviser pays all of each Fund's
operating expenses.
</FN>
</TABLE>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
<TABLE>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Stock Fund $ 20 $ 63 $108 $233
Fixed Income Fund $ 15 $ 47 $ 82 $179
</TABLE>
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<PAGE>
FINANCIAL HIGHLIGHTS
Each Fund was organized as a series of Analysts Investment Trust (the
"Trust") on May 28, 1993, and commenced operations on August 25, 1993. The
following financial information is derived from the audited financial statements
of the Analysts Stock Fund and the Analysts Fixed Income Fund. The audited
financial statements of these Funds are included in the Statement of Additional
Information. The Trust's Annual Report contains additional performance
information and will be made available upon request and without charge.
<TABLE>
<CAPTION>
ANALYSTS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED JULY 31, 1997, 1996 AND 1995
AND THE PERIOD FROM INCEPTION (AUGUST 25, 1993) THROUGH JULY 31, 1994
STOCK FUND
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1997 1996 1995 1994
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<S> <C> <C> <C> <C>
Net asset value beginning of period $ 18.28 $ 17.87 $ 15.79 $ 14.46
Income from investment operations:
Net investment income .32 .34 .24 .19
Net realized and unrealized gains on securities 6.06 .81 2.11 1.24
----------- ----------- --------- ---------
Total from investment operations 6.38 1.15 2.35 1.43
Less distributions:
Dividends from net investment income (.35) (.31) (.27) (.10)
Dividends from capital gains (.13) (.43)
Total distributions (.48) (.74) (.27) (.10)
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Net asset value, end of period $ 24.18 $ 18.28 $ 17.87 $ 15.79
=========== =========== ========= =========
Total return 35.47% 6.84% 15.01% 10.70%*
=========== =========== ========= =========
Ratios/Supplemental Data:
Net assets, end of period (thousands) $ 6,388 $ 3,642 $ 2,549 $ 2,068
Ratio of expenses to average net assets 2.00% 2.00% 2.00% 2.00%
Ratio of net investment income to average net assets 1.54% 1.89% 1.45% 1.18%
Portfolio turnover rate 5.11% 6.19% 32.02% 4.52%
Average commission rate paid $ 0.0635 $ 0.0862 -- --
FIXED
INCOME FUND
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1997 1996 1995 1994
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Net asset value beginning of period $ 13.62 $ 13.57 $ 13.38 $ 14.74
Income from investment operations:
Net investment income .79 .78 .80 .77
Net realized and unrealized gains on securities .78 .01 .18 (1.63)
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Total from investment operations 1.57 .79 .98 (.86)
Less distributions:
Dividends from net investment income (.76) (.74) (.79) (.50)
Dividends from capital gains
----------- ----------- --------- ---------
Total distributions (.76) (.74) (.79) (.50)
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Net asset value, end of period $ 14.43 13.62 $ 13.57 $ 13.38
=========== =========== ========= =========
Total return 12.05% 5.84% 7.61% (6.20%)*
=========== =========== ========= =========
Ratios/Supplemental Data:
Net assets, end of period (thousands) $ 4,025 $ 2,319 $ 1,477 $ 1,079
Ratio of expenses to average net assets 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to average net assets 5.63% 5.65% 6.03% 5.57%
Portfolio turnover rate 0.97% 22.34% 18.01% 22.67%
Average commission rate paid $ 0.0550 $ 0.0818 -- --
<FN>
*Annualized
</FN>
</TABLE>
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<PAGE>
INVESTMENT OBJECTIVES AND STRATEGIES
The descriptions that follow are designed to help you choose the Fund
that best fits your investment objectives. You may want to pursue more than one
objective by investing in both Funds.
ANALYSTS STOCK FUND
The investment objective of the Analysts Stock Fund (the "Stock Fund")
is long term capital appreciation. The Fund seeks to achieve this objective by
investing primarily in a broad range of common stocks which the Fund's Adviser,
Equity Analysts Inc. (the "Adviser"), believes have above average prospects for
appreciation. The stocks will be diversified among many companies and industries
to lower risk and volatility. The Adviser follows a stock investment program
diversified among the following categories (under normal circumstances, no more
than 50% of the total assets of the Fund will be invested in any category):
large capitalization (over $1 billion) domestic stocks; small (less than $500
million) and medium (between $500 million and $1 billion) capitalization
domestic stocks; foreign stocks; real estate stocks; and gold and other natural
resources stocks. The Adviser manages the diversification among the categories
based on a fundamental analysis of market conditions and the prospects for
specific categories of stocks. Within each category, specific stocks and
industries are also selected based on the Adviser's fundamental analysis.
The domestic stock categories are included to provide appreciation
potential during rising stock market conditions in the United States. The
foreign stock category is included to provide appreciation opportunities during
periods of adverse market conditions in the United States. The real estate and
gold and natural resources categories are included to provide a potential for
positive total return during inflationary periods.
Under normal circumstances, at least 65% of the total assets of the
Fund will be invested in common stock. The Adviser generally intends to stay
fully invested (subject to liquidity requirements and defensive purposes) in
common stock and common stock equivalents (such as rights, warrants and
securities convertible into common stocks) regardless of the movement of stock
prices. However, the Fund may invest in preferred stocks, bonds and corporate
debt securities when the Adviser believes that these securities offer
opportunities for capital appreciation. The Fund normally will invest primarily
in common stocks of established companies that have a record of at least three
years continuous operation, and whose securities, in the opinion of the Adviser,
enjoy a fair degree of marketability. Most equity securities in the Fund's
portfolio are listed on major stock exchanges or traded over-the-counter.
ANALYSTS FIXED INCOME FUND
The investment objective of the Analysts Fixed Income Fund (the "Fixed
Income Fund") is a high level of income over the long term consistent with
preservation of capital. The Fund seeks to achieve this objective by investing
primarily in a broad range of investment grade fixed income securities. See
"Securities Ratings" for a discussion of ratings of such securities. Under
normal circumstances, at least 65% of the total assets of the Fund will be
invested in fixed income securities, including U.S. government obligations,
securities of foreign governments, domestic or foreign corporate debt
securities, preferred stocks, convertible preferred stocks, convertible bonds
and
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<PAGE>
debentures, repurchase agreements and investment companies which invest
primarily in the above. For purposes of the preceding sentence, CMOs, REMICs and
floating and variable rate obligations are not considered to be fixed income
securities.
GENERAL
For temporary defensive or temporary liquidity purposes, either Fund
may hold all or a portion of its assets in money market instruments, securities
of other no-load registered investment companies or repurchase agreements. See
"Investment Policies and Techniques" for a more detailed discussion of each
Fund's investment practices.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, neither Fund can give any assurance that its investment objective
will be achieved. Current yields or rates of total return quoted by a Fund may
be higher or lower than past quotations, and there can be no assurance that any
current yield or rate of total return will be maintained.
HOW TO INVEST IN EACH FUND
Subject to a minimum initial investment of $1,000 for each Fund ($25
for tax sheltered retirement plans) and minimum subsequent investments of $25,
you may invest any amount you choose, as often as you want, in either Fund. You
may diversify your investments by choosing a combination of the Funds for your
investment program.
INITIAL PURCHASE
BY MAIL - You may purchase shares of each Fund by completing and
signing the investment application form which accompanies this Prospectus and
mailing it, together with a check (subject to the above minimum amounts) made
payable to Analysts Investment Trust, 9200 Montgomery Road, Building D, Suite
13A, Cincinnati, Ohio 45242. Please identify the Fund(s) in which you wish to
invest.
BY WIRE - You may purchase shares of each Fund by wiring Federal Funds
from your bank, which may charge you a fee. If money is to be wired for an
initial purchase (new account), you must call the Funds at (513) 984-3377, and
provide the following information: the name or names in which your account is to
be registered; your address; your social security or tax identification number;
the amount being wired; the name of the Fund(s) you wish to invest in; the name
of the wiring bank; and the name and telephone number of the person at your bank
to be contacted in connection with the order. Your bank must then wire the
specified account according to the following instructions:
Star Bank, N.A., Cincinnati/Trust
ABA #0420-0001-3
DDA #48036-9362
Account 19-0086 - Analysts Fixed Income Fund
or
Account 19-0085 - Analysts Stock Fund
For: ________________________ (Shareholder Name)
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<PAGE>
Shareholder account number ___________________
You must mail a completed application to the Trust after opening an
account by wire transfer. If a completed application is not received or your
social security or tax identification number is not certified with a Form W-9
within 60 days, your account will be subject to back-up withholding.
Wire orders will be accepted only on a day on which the Funds and Star
Bank are open for business. A wire purchase will not be considered made until
the wired money is received and the purchase is accepted by the Funds. Any
delays which may occur in wiring money, including delays which may occur in
processing by the banks, are not the responsibility of the Funds or Star Bank.
There is presently no fee for the receipt of wired funds, but the right to
charge shareholders for this service is reserved by the Funds.
ADDITIONAL INVESTMENTS
You may purchase additional shares of either Fund at any time by mail
or by bank wire (minimum of $25). Each additional purchase request must contain
your name, the name of your account(s), your account number(s), and the Fund(s)
in which you wish to invest. Checks should be made payable to Analysts
Investment Trust and should be sent to the Trust's address. A bank wire should
be sent as outlined above.
TAX SHELTERED RETIREMENT PLANS
Since the Funds are oriented to longer term investments, shares of the
Funds may be an appropriate investment medium for tax sheltered retirement
plans, including: individual retirement plans (IRA's); simplified employee
pensions (SEP's); 401(k) plans; qualified corporate pension and profit sharing
plans (for employees); 403(b) tax deferred investment plans (for employees of
public school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Funds for the procedure to
open an IRA or SEP plan, 401(k) plan, qualified pension or profit sharing plan,
403(b) tax deferred investment plan or non-qualified plan, as well as more
specific information regarding these retirement plan options. Consultation with
an attorney or tax adviser regarding these plans is advisable. Custodial fees
for an IRA or 403(b) plan will be paid by the Adviser directly to the IRA or
403(b) plan custodian.
OTHER PURCHASE INFORMATION
You may exchange securities that you own for shares of either of the
Funds, provided the securities meet the Fund's investment criteria and the
Adviser deems them to be a desirable investment for the Fund. Any exchange will
be a taxable event and you may incur certain transaction costs relating to the
exchange.
Contact the Funds for additional information.
If an order, together with payment in proper form, is received before
the close of trading on the New York Stock Exchange (currently 4:00 p.m. Eastern
Time), Fund shares will be purchased at the net asset value determined as of the
close of trading on that day. Otherwise, Fund shares will be purchased at the
net asset value determined as of the close of trading on the New York Stock
Exchange on the next business day. You become a shareholder after declaration of
any dividend on the day on which the order is effective. Dividends begin to
accrue after you become a shareholder.
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<PAGE>
The Funds do not issue share certificates. All shares are held in
non-certificate form registered on the books of the Fund for the account of the
shareholder. The rights to limit the amount of purchases and to refuse to sell
to any person are reserved by each Fund. If your check or wire does not clear,
you will be responsible for any loss incurred. If you are already a shareholder,
the Fund can redeem shares from any identically registered account in either
Fund as reimbursement for any loss incurred. You may be prohibited or restricted
from making future purchases in either Fund.
EXCHANGE PRIVILEGE
As a shareholder in any Fund, you may exchange shares for shares of any
other Fund in the Analysts Mutual Fund Group (which includes all open-end mutual
funds for which the Adviser serves as investment adviser or manager), or for
shares of the Money Market Portfolio, the Government Securities Portfolio or the
Tax-Exempt Portfolio of the Cash Account Trust ("CAT"), a separately managed,
unaffiliated money market fund. Exchanges may be made only if the Fund or CAT
Portfolio into which you wish to exchange your shares is registered in your
state of residence. The exchange privilege with the CAT Portfolios does not
constitute an offering or recommendation of the shares of any such Portfolio by
the Trust or the Adviser. The CAT Portfolios' administrator compensates the
Adviser for administrative and distribution services it performs with respect to
those Portfolios.
It is your responsibility to obtain and read a prospectus of the Fund
or CAT Portfolio into which you are exchanging. By giving exchange instructions,
a shareholder will be deemed to have acknowledged receipt of the prospectus for
the Fund or Portfolio being purchased. You may make an exchange by telephone or
by written request.
You can make an exchange by calling the Funds at the number listed in
this prospectus. An exchange may also be made by written request signed by all
registered owners of the account mailed to the Funds. Requests for exchanges
received prior to close of trading on the New York Stock Exchange (currently
4:00 p.m. Eastern Time) will be processed at the next determined net asset value
as of the close of business on the same day.
An exchange is made by redeeming shares of one Fund (or CAT Portfolio)
and using the proceeds to buy shares of another Fund (or CAT Portfolio), with
the price for the redemption and the purchase being the next determined net
asset value after the receipt of the order. See "Redemption of Shares". There is
no charge for this service, but the Funds reserve the right to charge a fee in
the future. An exchange results in a sale of shares for federal income tax
purposes. If you make use of the exchange privilege, you may realize either a
long term or short term capital gain or loss on the shares redeemed.
Before making an exchange, you should consider the investment objective
of the Fund (or CAT Portfolio) to be purchased. If your exchange creates a new
account, you must satisfy the requirements of the Fund (or CAT Portfolio) in
which shares are being purchased. You may make an exchange to a new account or
an existing account; however, the account ownerships must be identical. The
Funds reserve the right to terminate or modify the exchange privilege in the
future upon 60 days prior notice to shareholders.
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<PAGE>
REDEMPTION OF SHARES
You may redeem any part of your account in either Fund by mail or
telephone. Each Fund will redeem your shares without charge at the next share
price (net asset value) calculated after receipt of your properly completed
request for withdrawal.
BY MAIL - You may redeem your shares at no charge by mail. All
redemptions will be made at the net asset value determined after the redemption
request has been received by the Funds in proper order. The proceeds of the
redemption may be more or less than the purchase price of your shares, depending
on the market value of the Fund's securities at the time of your redemption.
Your request should be addressed to Analysts Mutual Funds, 9200 Montgomery Road,
Building D, Suite 13A, Cincinnati, Ohio 45242.
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For redemptions in excess of
$25,000, the Funds may require that signatures be guaranteed by a bank or member
firm of a national securities exchange. Signature guarantees are for the
protection of shareholders. At the discretion of a Fund, a shareholder which is
a corporation, trust, estate, partnership, individual retirement account or
other entity, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
If you are not certain of the requirements for a redemption please call
the Funds at the number listed in this Prospectus.
BY TELEPHONE - You may request a redemption of your shares in any Fund
on any business day the New York Stock Exchange is open by calling the Funds
before 4:00 p.m. Eastern Time. It is not necessary for you to first make a
written election to initiate a telephone redemption. Redemption proceeds will be
mailed or wired at the shareholders direction to the predesignated account. The
minimum amount that may be wired is $1,000 (wire charges of $11.00 will be
deducted from redemption proceeds). The Trust and Star Bank, the Funds'
Custodian, will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures will include requiring a
form of personal identification from the caller.
By using the telephone redemption and exchange privileges, a
shareholder authorizes the Funds and the Custodian to act upon the instruction
of any person by telephone to redeem from the account and transfer the proceeds
to the bank account designated or effect an exchange into another Fund. The
Funds and the Custodian are not liable for following instructions communicated
by telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. The Funds may change, modify or terminate the telephone redemption
or exchange privilege at any time.
BY SYSTEMATIC WITHDRAWAL PLAN - As another convenience, the Funds offer
a Systematic Withdrawal Program whereby shareholders may request that a check
drawn in a predetermined amount be sent to them each month or calendar quarter.
A shareholder's account must have Fund shares with
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<PAGE>
a value of at least $10,000 in order to start a Systematic Withdrawal Program,
and the minimum amount that may be withdrawn each month or quarter under the
Systematic Withdrawal Program is $100. This Program may be terminated or
modified by a shareholder or the Funds at any time without charge or penalty and
will become effective five business days following receipt of your instructions.
Shares will be sold within 5 to 10 days preceding the end of a month. A
withdrawal under the Systematic Withdrawal Program involves a redemption of
shares and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceeds the dividends credited to the
shareholder's account, the account ultimately may be depleted.
ADDITIONAL INFORMATION - Redemptions specifying a certain date or share
price cannot be accepted and will be returned. If you invest by wire, you may
redeem shares on the first business day following settlement of such purchase.
However, if you invest by a personal, corporate, cashier's or government check,
or through any of our telephone services, the redemption proceeds will not be
paid until the first business day after the 10th calendar day following receipt
of payment by the Fund. Exchanges into any of the other Funds or CAT Portfolios
are, however, permitted without the ten day waiting period.
We will mail or wire you the proceeds on or before the fifth business
day following the redemption. Also, when the New York Stock Exchange is closed
(or when trading is restricted) for any reason other than its customary weekend
or holiday closing or under any emergency circumstances, as determined by the
Securities and Exchange Commission, we may suspend redemptions or postpone
payment dates. If you are unable to accomplish your transaction by telephone
(for example, during times of unusual market activity), consider sending your
order by express mail or facsimile at (513) 984-2411.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each Fund reserves the right to require any shareholder to redeem all
of his shares in the Fund on 30 days written notice if the value of his shares
in the Fund is less than $1,000 due to redemption ($25 for IRA's), or such other
minimum amount as the Fund may determine from time to time. A shareholder may
increase the value of his shares in the Fund to the minimum amount within the 30
day period. Each share of each Fund is subject to redemption at any time if the
Board of Trustees determines in its sole discretion that failure to so redeem
may have materially adverse consequences to all or any of the shareholders of
the Trust or any Fund of the Trust.
SHARE PRICE CALCULATION
The value of an individual share in a Fund (the net asset value) is
calculated by dividing the total value of a Fund's investments and other assets
(including accrued income), less any liabilities (including estimated accrued
expenses), by the number of shares outstanding, rounded to the nearest cent. Net
asset value per share is determined as of the close of the New York Stock
Exchange (4:00 p.m., Eastern time) on each day that the exchange is open for
business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of each Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price of the day.
Lacking a last sale price, a security is generally valued at its last bid price,
except when, in the Adviser's opinion, the last bid price does not accurately
reflect
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<PAGE>
the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, when the
Adviser determines the last bid price does not accurately reflect the current
value, or when restricted securities are being valued, such securities are
valued as determined in good faith by the Adviser, subject to review of the
Board of Trustees of the Trust.
Fixed income securities (including mortgage-related securities and
asset-backed and receivable- backed securities) may be valued on the basis of
prices furnished by a pricing service when the Adviser believes such prices
accurately reflect the fair market value of such securities. A pricing service
utilizes electronic data processing techniques to determine prices for normal
institutional-size trading units of debt securities without regard to sale or
bid prices. When prices are not readily available from a pricing service, or
when restricted or illiquid securities are being valued, securities are valued
at fair value as determined in good faith by the Adviser, subject to review of
the Board of Trustees. Short term investments in fixed income securities with
maturities of less than 60 days when acquired, or which subsequently are within
60 days of maturity, are valued by using the amortized cost method of valuation.
For valuation purposes, quotations of foreign securities in a foreign
currency are converted to U.S. dollar equivalents at the time of pricing. In
computing the net asset value of a Fund, the values of foreign portfolio
securities are generally based upon market quotations which, depending upon the
exchange or market, may be last sale price, last bid price, or the mean between
last bid and asked prices as of, in each case, the close of the appropriate
exchange or another designated time.
Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets is normally completed at various times before the
close of business on each day on which the New York Stock Exchange is open.
Trading of these securities may not take place on every New York Stock Exchange
business day. In addition, trading may take place in various foreign markets on
Saturdays or on other days when the New York Stock Exchange is not open and on
which a Fund's share price is not calculated. Therefore, the value of the
portfolio of a Fund holding foreign securities may be significantly affected on
days when shares of the Fund may not be purchased or redeemed.
The calculation of the share price of a Fund holding foreign securities
in its portfolio does not take place contemporaneously with the determination of
the values of many of the foreign portfolio securities used in such calculation.
Events affecting the values of foreign portfolio securities that occur between
the time their prices are determined and the calculation of the Fund's share
price will not be reflected in the calculation unless the Adviser determines,
subject to review by the Board of Trustees, that the particular event would
materially affect net asset value, in which case an adjustment will be made.
DIVIDENDS AND DISTRIBUTIONS
Each Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on a quarterly basis. Each Fund intends
to distribute its net long term capital gains at least once a year and its net
short term capital gains at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of
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dividends and/or capital gain distributions may be made in the application to
purchase shares or by separate written notice to the Funds. Shareholders will
receive a confirmation statement reflecting the payment and reinvestment of
dividends and summarizing all other transactions. If cash payment is requested,
a check normally will be mailed within five business days after the payable
date. If you withdraw your entire account, all dividends accrued to the time of
withdrawal, including the day of withdrawal, will be paid at that time.
Distributions of less than $10 and distributions on shares purchased within the
last 30 days, however, will not be paid in cash and will be reinvested. You may
elect to have distributions on shares held in IRA's, 403(b) plans and other tax
sheltered retirement plans paid in cash only if you are 59 1/2 years old or
permanently and totally disabled or if you otherwise qualify under the
applicable plan.
TAXES
Each Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
a Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any net realized
capital gains.
For federal income tax purposes, each Fund is treated as a separate
entity for the purpose of computing taxable net income and net realized capital
gains and losses. Dividends paid by each Fund from ordinary income are taxable
to shareholders as ordinary income, but may be eligible in part for the
dividends received deduction for corporations. Pursuant to the Tax Reform Act of
1986 (the "Tax Reform Act"), all distributions of net capital gains to
individuals are taxed at the same rate as ordinary income. All distributions of
net capital gains to corporations are taxed at regular corporate rates. Any
distributions designated as being made from net realized long term capital gains
are taxable to shareholders as long term capital gains regardless of the holding
period of the shareholder. The tax consequences described in this section apply
whether distributions are taken in cash or reinvested in additional shares.
Each Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes.
Income received by any Fund holding foreign securities may be subject
to foreign tax withholding. Tax treaties between certain countries and the U.S.
may reduce or eliminate such taxes. Shareholders may be entitled to claim tax
credits or deductions, subject to provisions and limitations of the Internal
Revenue Code, for foreign income taxes paid by the Fund. The Fund will notify
its shareholders if such credit or deduction is available.
Shareholders are urged to consult their own tax advisers regarding
specific questions as to federal, state or local taxes, applicable foreign tax
credits and deductions, the tax effect of distributions and withdrawals from the
Fund and the use of the Exchange Privilege.
Unless a shareholder of a Fund furnishes his certified taxpayer
identification number (social security number for individuals) and certifies
that he is not subject to backup withholding, the Fund will be required to
withhold and remit to the U.S. Treasury 20% of the dividends, distributions and
redemption proceeds payable to the shareholder. Shareholders should be aware
that, under regulations
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promulgated by the Internal Revenue Service, a Fund may be fined $50 annually
for each account for which a certified taxpayer identification number is not
provided. In the event that such a fine is imposed with respect to a specific
account in any year, the Fund will make a corresponding charge against the
account.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
NAME POSITION
---- --------
*David Lee Manzler, Jr. President, Treasurer and Trustee
*David L. Manzler, Sr. Vice President, Secretary and Trustee
Walter E. Bowles, III Trustee
Robert W. Buechner Trustee
David J. Orth Trustee
Anthony J. Schement Trustee
The principal occupations of the executive officers and Trustees of the
Trust during the past five years are set forth below:
DAVID L. MANZLER, SR., 9200 Montgomery Road, Bldg. D, Suite 13A,
Cincinnati, Ohio is Vice President and a Director of Equity Analysts Inc. He is
also President of Equity Analysts Agency Inc., an insurance and pension plan
administrator, and a Director of Cincinnati Steel Products Co., a steel
fabrication company. Mr. Manzler is the father of David Lee Manzler, Jr.
DAVID LEE MANZLER, JR., 9200 Montgomery Road, Bldg. D, Suite 13A,
Cincinnati, Ohio is President and a Director of Equity Analysts Inc. He is also
the President of Manzler Aviation, Inc. Prior to June, 1990, he was a captain in
the U.S. Marine Corps. Mr. Manzler is the son of David L. Manzler, Sr.
WALTER E. BOWLES, III, 6645 Miami Trails Drive, Loveland, Ohio has been
President of Webco Environmental Management, Inc., an environmental consulting
firm, since September, 1993. Prior to April, 1994, Mr. Bowles was a Business
Environmental Engineer for James River Corp., a manufacturer of paper and paper
products.
ROBERT W. BUECHNER, 105 East Fourth Street, Suite 1405, Cincinnati,
Ohio is President of the law firm Buechner, Haffer, O'Connell, Meyers & Healey
Co., L.P.A.
DAVID J. ORTH, P.O. Box 6706, Florence, Kentucky is a sales
representative for Nextell Communications, Inc., a wireless communications
company. From March 1996 to August 1997, he was a Property Manager for Public
Storage Properties, a warehouse rental company. From August 1990 to March 1996,
he was a pharmaceutical sales representative for Bristol-Myers Squibb, Inc.
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ANTHONY J. SCHEMENT, 8032 Deershadow Lane, Cincinnati, Ohio is a
Director of BMF Federal Savings Bank. Mr. Schement was President of Benchmark
Federal Savings Bank from July, 1989 until October, 1992.
OPERATION OF THE FUNDS
Each Fund is a diversified series of Analysts Investment Trust, an
open-end management investment company organized as an Ohio business trust on
May 28, 1993. The Board of Trustees supervises the business activities of the
Trust. Like other mutual funds, the Trust retains various organizations to
perform specialized services. It retains Equity Analysts Inc., 9200 Montgomery
Road, Building D, Suite 13A, Cincinnati, Ohio 45242 (the "Adviser") to manage
the Trust's investments and its business affairs. The Adviser is a
Cincinnati-based company of which David L. Manzler, Sr. and David Lee Manzler,
Jr. are the controlling shareholders. The Adviser is an investment advisory firm
which has provided investment advice to individuals, corporations, pension and
profit sharing plans and trust accounts since 1984. David Lee Manzler, Jr.,
President of Equity Analysts Inc., is primarily responsible for the day-to-day
management of the portfolio of each Fund and has been since the inception of the
Fund. Mr. Manzler has been the President of the Adviser since January, 1996, and
a Director of the Adviser since May, 1990. Equity Analysts Inc. is also the
exclusive agent for the distribution of shares of the Funds. The Trust acts as
its own transfer agent and dividend paying agent.
Analysts Stock Fund is obligated to pay the Adviser a fee equal to an
annual average rate of 2% of its average daily net assets up to and including
$20 million, 1.75% of such assets from $20 million to and including $40 million,
1.5% of such assets from $40 million to and including $100 million and .75% of
such assets in excess of $100 million. Analysts Fixed Income Fund is obligated
to pay the Adviser a fee equal to an annual average rate of 1.5% of its average
daily net assets up to and including $20 million, 1.25% of such assets from $20
million to and including $40 million, 1% of such assets from $40 million to and
including $100 million and .75% of such assets in excess of $100 million. The
Adviser pays all of the expenses of each Fund except brokerage, taxes, interest
and extraordinary expenses. Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., and subject to its obligation
of seeking best qualitative execution, the Adviser may give consideration to
sales of shares of the Trust as a factor in the selection of brokers and dealers
to execute portfolio transactions.
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INVESTMENT POLICIES AND TECHNIQUES
This section contains general information about various types of
securities and investment techniques. Each Fund may invest in any security or
employ any investment technique described in this section unless specifically
noted otherwise.
EQUITY SECURITIES
Each Fund may invest in equity securities. Equity securities include
common stock, common stock equivalents (such as rights and warrants) and
investment companies which invest primarily in the above.
Warrants are options to purchase common stock at a specified price
valid for a specific time period. Rights are similar to warrants, but normally
have a short duration and are distributed by the issuer to its shareholders. A
Fund may not invest more than 5% of its net assets at the time of purchase in
rights and warrants.
Real estate stocks are common stocks or common stock equivalents of
domestic real estate investment trusts and other companies which operate as real
estate corporations or which have a significant portion of their assets in real
estate. Neither Fund will acquire any direct ownership of real estate.
Gold and natural resources stocks are common stocks or common stock
equivalents of companies principally engaged in exploration, mining or
processing of gold or other precious metals and minerals. Gold and natural
resources stocks involve additional risk because of the price volatility of gold
and other precious metals and minerals and the increased impact such volatility
has on the market value of such stocks.
Certain aspects of foreign equity securities are discussed below under
"Foreign Securities."
FIXED INCOME SECURITIES
Each Fund may invest in fixed income securities. Fixed income
securities include debt securities of domestic and foreign corporations, U.S.
government securities, securities of foreign governments, adjustable rate
preferred stock, mortgage-related securities, repurchase agreements, municipal
obligations, zero coupon bonds, asset-backed and receivable-backed securities
and participation interests in such securities, as well as investment companies
which invest primarily in the above. Preferred stock and certain common stock
equivalents such as convertible bonds and debentures may also be considered to
be fixed income securities. Convertible preferred stock is preferred stock that
can be converted into common stock pursuant to its terms. Convertible debentures
are debt instruments that can be converted into common stock pursuant to their
terms.
Fixed income securities are generally considered to be interest rate
sensitive, which means that their value will tend to decrease when interest
rates rise and increase when interest rates fall. Securities with shorter
maturities, while offering lower yields, generally provide greater price
stability than longer term securities and are less affected by changes in
interest rates. The Fund may invest
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in fixed income securities of any maturity, and will make maturity decisions
based upon the Adviser's analysis of market conditions.
CORPORATE DEBT SECURITIES - Corporate debt securities are long
and short term debt obligations issued by companies (such as publicly issued and
privately placed bonds, notes and commercial paper).
U.S. GOVERNMENT SECURITIES - U.S. government securities may be
backed by the credit of the government as a whole or only by the issuing agency.
U.S. Treasury bonds, notes, and bills and some agency securities, such as those
issued by the Federal Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the U.S.
government as to payment of principal and interest and are the highest quality
government securities. Other securities issued by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the agency's right to
borrow money from the U.S. Treasury under certain circumstances, but are not
backed by the full faith and credit of the U.S. government.
Participation interests in U.S. government obligations are pro rata
interests in such obligations which are generally underwritten by government
securities dealers. Certificates of safekeeping for U.S. government obligations
are documentary receipts for such obligations. Both participation interests and
certificates of safekeeping are traded on exchanges and in the over-the-counter
market.
Each Fund may invest in U.S. government obligations and related
participation interests. In addition, each Fund may invest in custodial receipts
that evidence ownership of future interest payments, principal payments or both
on certain U.S. government obligations. Such obligations are held in custody by
a bank on behalf of the owners. These custodial receipts are known by various
names, including Treasury Receipts, Treasury Investors Growth Receipts ("TIGRs")
and Certificates of Accrual on Treasury Securities ("CATS"). Custodial receipts
generally are not considered obligations of the U.S. government.
FOREIGN SECURITIES - Each Fund may invest up to 50% of the
value of its assets in equity or fixed income securities of foreign issuers when
these securities meet its standards of selection. The Funds may make such
investments either directly in, or by purchasing American Depositary Receipts
for, foreign securities that are listed on an exchange in the United States or
quoted in the domestic over-the-counter market. The funds may also purchase
securities of such issuers in foreign markets, either on foreign securities
exchanges or in the over-the-counter markets. Foreign fixed income securities
include debt obligations issued by foreign companies, foreign governments or
international organizations.
Foreign government obligations generally consist of debt
securities supported by national, state or provincial governments or similar
political units or governmental agencies. Such obligations may or may not be
backed by the national government's full faith and credit and general taxing
powers. Investments in foreign securities also include obligations issued by
international organizations. International organizations include entities
designated or supported by governmental
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entities to promote economic reconstruction or development as well as
international banking institutions and related government agencies.
Investments in foreign securities may present certain risks,
including those resulting from changes in restrictions on foreign currency
transactions and rates of exchange, future political and economic developments,
reduced availability of public information concerning issuers, and the fact that
foreign issuers are not generally subject to uniform accounting, auditing and
financial reporting standards or to other regulatory practices and requirements
comparable to those applicable to domestic issuers. Other risks associated with
investments in foreign securities include less liquid markets, difficulty in
enforcing contractual obligations, delays in settlement of securities
transactions and greater price volatility. In addition, investments in
developing countries involves exposure to economic structures that are generally
less diverse and mature than in the United States, and to political systems
which may be less stable. The market prices of these securities and the ability
of the Funds to hold such securities could be affected by social, economic and
political instability.
ADJUSTABLE RATE PREFERRED STOCKS - Adjustable rate preferred
stocks have a variable dividend which, rather than being set for the life of an
issue, generally is determined quarterly according to a formula based upon a
specified premium to, or discount from, the yield on certain U.S. Treasury
securities. The market value of these stocks should therefore be less sensitive
to interest rate fluctuations than those of other fixed income securities and
preferred stocks. They may also have conversion, exchange or other additional
features which are designed to enhance stability of principal. Nevertheless, the
market value of an adjustable rate preferred stock can be expected to fluctuate
with, among other factors, changes in interest rates generally or the
creditworthiness of the issuer.
MORTGAGE-RELATED SECURITIES - Mortgage-related securities
include securities representing interests in a pool of mortgages. These
securities, including securities issued by FNMA and GNMA, provide investors with
payments consisting of both interest and principal as the mortgages in the
underlying mortgage pools are repaid. Pools of mortgage loans are assembled for
sale to investors (such as the Funds) by various governmental,
government-related and private organizations, such as dealers. Unscheduled or
early payments on the underlying mortgages may shorten the securities' effective
maturities.
Other types of securities representing interests in a pool of
mortgage loans are known as collateralized mortgage obligations (CMOs) and real
estate mortgage investment conduits (REMICs) and multi-class pass-throughs. CMOs
and REMICs are debt instruments collateralized by pools of mortgage loans or
other mortgage-backed securities. Multi-class pass-through securities are equity
interests in a trust composed of mortgage loans or other mortgage-backed
securities. Payments of principal and interest on underlying collateral provides
the funds to pay debt service on the CMO or REMIC or make scheduled
distributions on the multi-class pass-through securities. CMOs, REMICs and
multi-class pass-through securities (collectively "CMOs" unless the context
indicates otherwise) may be issued by agencies or instrumentalities of the U.S.
government (such as the Federal Home Loan Mortgage Corporation) or by private
organizations.
CMOs are issued with a variety of classes or "tranches," which
have different maturities and are often retired in sequence. One or more
tranches of a CMO may have coupon rates which reset periodically at a specified
increment over an index such as the London Interbank Offered Rate ("LIBOR").
These "floating rate CMOs," typically are issued with lifetime "caps" on their
coupon
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rate, which means that there is a ceiling beyond which the coupon rate may not
be increased. The yield of some floating rate CMOs varies in excess of the
change in the index, which would cause the value of such CMOs to fluctuate
significantly once rates reach the cap.
REMICs, which have elected to be treated as such under the
Internal Revenue Code, are private entities formed for the purpose of holding a
fixed pool of mortgages secured by an interest in real property. REMICs are
similar to CMOs in that they issue multiple classes of securities. As with other
CMOs, the mortgages which collateralize the REMICs in which a Fund may invest
include mortgages backed by GNMA certificates or other mortgage pass-throughs
issued or guaranteed by the U.S. government, its agencies or instrumentalities
or issued by private entities, which are not guaranteed by any government
agency.
Yields on privately issued CMOs as described above have been
historically higher than the yields on CMOs issued or guaranteed by U.S.
government agencies. However, the risk of loss due to default on such
instruments is higher since they are not guaranteed by the U.S. government. In
addition, in the event of a bankruptcy or other default of a broker who issued a
CMO held by a Fund, the Fund could experience both delays in liquidating its
position and losses. Each Fund may also invest not more than 5% of its net
assets in "stripped" CMOs, which represent only the income portion or the
principal portion of the CMO. Some "stripped" CMOs, known as "inverse floaters,"
have coupon rates which are set periodically at a rate inverse to the index
rate.
The average life of securities representing interests in pools
of mortgage loans is likely to be substantially less than the original maturity
of the mortgage pools as a result of prepayments or foreclosures of such
mortgages. Prepayments are passed through to the registered holder with the
regular monthly payments of principal and interest, and have the effect of
reducing future payments. To the extent the mortgages underlying a security
representing an interest in a pool of mortgages are prepaid, a Fund may
experience a loss (if the price at which the respective security was acquired by
the Fund was at a premium over par, which represents the price at which the
security will be redeemed upon prepayment). In addition, prepayments of such
securities held by a Fund will reduce the share price of the Fund to the extent
the market value of the securities at the time of prepayment exceeds their par
value. Furthermore, the prices of mortgage-related securities can be
significantly affected by changes in interest rates. Prepayments may occur with
greater frequency in periods of declining mortgage rates because, among other
reasons, it may be possible for mortgagors to refinance their outstanding
mortgages at lower interest rates. In such periods, it is likely that any
prepayment proceeds would be reinvested by a Fund at lower rates of return.
FLOATING AND VARIABLE RATE OBLIGATIONS - Each Fund may invest
in floating and variable rate obligations. Floating rate obligations have an
interest rate which is fixed to a specified interest rate, such as a bank prime
rate, and is automatically adjusted when the specified interest rate changes.
Variable rate obligations have an interest rate which is adjusted at specified
intervals to a specified interest rate. Periodic interest rate adjustments help
stabilize the obligations' market values.
A Fund may purchase these obligations from the issuers or may purchase
participation interests in pools of these obligations from banks or other
financial institutions. Variable and floating rate obligations usually carry
demand features that permit a Fund to sell the obligations back to the issuers
or to financial intermediaries at par value plus accrued interest upon short
notice at any time or prior to specific dates. The inability of the issuer or
financial intermediary to repurchase an obligation on
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demand could affect the liquidity of the Fund's portfolio. Frequently,
obligations with demand features are secured by letters of credit or comparable
guarantees.
SECURITIES RATINGS - The Adviser considers debt securities to be of
investment grade quality if they are rated BBB or higher by Standard & Poor's
Corporation ("S&P"), Baa or higher by Moody's Investors Services, Inc.
("Moody's"), or if unrated, determined by the Adviser to be of comparable
quality. Investment grade debt securities generally have adequate to strong
protection of principal and interest payments. In the lower end of this
category, credit quality may be more susceptible to potential future changes in
circumstances and the securities may have speculative elements. If the rating of
a security by S&P or Moody's drops below investment grade, the Adviser will
dispose of the security as soon as practicable (depending on market conditions)
unless the Adviser determines based on its own credit analysis that the security
provides the opportunity of meeting the Fund's objective without presenting
excessive risk. Neither Fund will invest more than 5% of the value of its net
assets in securities that are below investment grade. In addition, neither Fund
will invest in securities rated lower than B by S&P or Moody's. If a particular
fixed income security is unrated, the Adviser will generally look to the rating
of other debt of the issuer, if a rating is available.
GENERAL - Each Fund is permitted to invest in other investment
companies. Other investment companies offer diversification that may not be
attainable otherwise. For example, investment in another investment company
could enhance the Fund's diversification among issuers of foreign securities,
fixed income securities or in a particular industry sector. A Fund will not
purchase more than 3% of the outstanding voting stock of any investment company.
If the Fund acquires securities of another investment company, the shareholders
of the Fund may be subject to duplicative management fees. Investment by the
Fund in CMO's and foreign banks that are deemed to be investment companies under
the Investment Company Act of 1940 will be included in the limitation on
investments in other investment companies. Neither Fund may invest more than 5%
of its net assets in illiquid securities. See "Additional Information About Fund
Investments" and "Investment Limitations" in the Statement of Additional
Information.
OPTION TRANSACTIONS
The Funds may engage in option transactions involving equity
securities, debt securities, foreign currencies, futures contracts and stock
indexes. To cover the potential obligations involved in option transactions, a
Fund will own the underlying equity security, debt security, futures contract or
foreign currency or the Fund will segregate with the Custodian (a) liquid assets
sufficient to purchase the underlying equity security, debt security, futures
contract or foreign currency or (b) liquid assets equal to the market value of
the stock index. A Fund will only engage in options on futures contracts for
hedging purposes (see "Hedging Program" below). Option transactions involve the
following principal risks: (a) the loss of a greater percentage of the Fund's
investment than a direct investment in the underlying instrument, (b) the loss
of opportunity to profit from price movements in the underlying instrument, and
(c) the inability to effect a closing transaction on a particular option. There
is no restriction on the percentage of a Fund's total assets which may be
committed to transactions in options (except options on futures contracts as
discussed below). A more complete description of the characteristics, risks and
possible benefits of option transactions is included in the Statement of
Additional Information.
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HEDGING PROGRAM
Each Fund may hedge all or a portion of its portfolio investments
through the use of options, futures contracts and options on futures contracts.
Each Fund may also hedge currency risks associated with investments in foreign
securities and in particular may hedge its portfolio through the use of forward
foreign currency transactions as described below. The objective of the hedging
program is to protect a profit or offset a loss in a portfolio security from
future price erosion or to assure a definite price for a security, stock index,
futures contract or currency. There are transactional costs connected with a
hedging program.
The principal risks associated with hedging transactions are: (a)
possible imperfect correlation between the prices of the options and futures
contracts and the market value of a Fund's portfolio securities, (b) possible
lack of a liquid secondary market for closing out an option or futures contract
transaction, (c) the need for additional skills and techniques beyond normal
portfolio management, and (d) losses resulting from market movements not
anticipated by the Adviser.
No Fund may purchase or sell futures contracts or purchase related
options if, immediately thereafter, more than one-third of its net assets would
be hedged. In addition, no Fund may enter into transactions involving futures
contracts and related options if such transactions would result in more than 5%
of the fair market value of the Fund's assets being deposited as initial margin
for such transactions. A Fund's ability to engage in the hedging transactions
and strategies described above may be limited by the tax requirement that the
Fund derive less than 30% of its gross income from the sale or other disposition
of stock or securities held for less than three months.
A more complete description of the characteristics, risks and possible
benefits of hedging transactions is included in the Statement of Additional
Information.
FOREIGN CURRENCY TRANSACTIONS
Each Fund can purchase securities denominated in a foreign currency.
When a Fund purchases or sells a security denominated in a foreign currency, it
may be required to settle the purchase transaction in the relevant foreign
currency or to receive the proceeds of the sale in the relevant foreign
currency. In either event, the Fund will be obligated to acquire or dispose of
the foreign currency by selling or buying an equivalent amount of U.S. dollars.
To effect the conversion of the amount of foreign currency involved in the
purchase or sale of a foreign security, the Fund may purchase or sell such
foreign currency on a "spot" (i.e. cash) basis.
In addition, the Fund may wish to lock in the U.S. dollar value of the
transaction at or near the time of the purchase or sale at the exchange rate or
rates then prevailing between the U.S. dollar and the currency in which the
foreign security is denominated. Therefore, the Fund may enter into a forward
foreign currency exchange contract. A forward foreign currency exchange contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. These contracts are
traded directly between currency traders (usually large commercial banks) and
their customers. By entering into a forward contract in U.S. dollars for the
purchase or sale of the amount of foreign currency involved in an underlying
security transaction, the Fund is able to protect itself against a possible loss
between trade and settlement dates resulting from an adverse
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change in the relationship between the U.S. dollar and such foreign currency.
This process is known as transaction hedging. Transaction hedging may protect
the Fund from a possible loss, but will limit potential gains which might result
from a positive change in the currency relationships.
Some or all of a Fund's portfolio securities may be denominated in
foreign currencies. As a result, in addition to the risk of change in the market
value of portfolio securities, the value of the portfolio in U.S. dollars is
subject to fluctuations in the exchange rate between such foreign currencies and
the U.S. dollar. When it is desirable to limit or reduce exposure in a foreign
currency in order to moderate potential changes in the U.S. dollar value of the
portfolio, the Fund may enter into a forward foreign currency exchange contract
to sell, for a fixed amount of U.S. dollars, the amount of foreign currency
approximating the value of some or all of the Fund's portfolio securities
denominated in such foreign currency. This technique is known as portfolio
hedging. Hedging against a decline in the value of currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. The Fund may also employ forward foreign
currency exchange contracts to hedge against an increase in the value of the
currency in which the securities the Fund intends to buy are denominated.
A Fund may also hedge its foreign currency exchange rate risk by
engaging in currency futures contracts and options transactions described above.
Neither Fund will engage in foreign currency transactions for speculative
purposes.
INVESTMENT TECHNIQUES
REPURCHASE AGREEMENTS. A repurchase agreement is a short-term
investment in which the purchaser (I.E., the Fund) acquires ownership of a U.S.
Government security (which may be of any maturity) and the seller agrees to
repurchase the obligation at a future time at a set price, thereby determining
the yield during the purchaser's holding period (usually not more than seven
days from the date of purchase). Any repurchase transaction in which a Fund
engages will require full collateralization of the seller's obligation during
the entire term of the repurchase agreement. In the event of a bankruptcy or
other default of the seller, a Fund could experience both delays in liquidating
the underlying security and losses in value. However, both Funds intend to enter
into repurchase agreements only with Star Bank, N.A. (the Trust's Custodian),
other banks with assets of $1 billion or more and registered securities dealers
determined by the Adviser (subject to review by the Board of Trustees) to be
creditworthy. The Adviser monitors the creditworthiness of the banks and
securities dealers with which a Fund engages in repurchase transactions.
WHEN ISSUED SECURITIES AND FORWARD COMMITMENTS. Each Fund may buy and
sell securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The price and interest rate that will be
received on the securities are each fixed at the time the buyer enters into the
commitment. A Fund may enter into such forward commitments if they hold, and
maintain until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. There is no percentage limitation on a Fund's net assets
which may be invested in forward commitments. Forward commitments involve a risk
of loss if the value of the security to be purchased declines prior to the
settlement date. Any change in value could increase fluctuations in a Fund's
share price and yield. Although a Fund will generally enter into forward
commitments with the intention of acquiring
- 20 -
<PAGE>
securities for its portfolio, a Fund may dispose of a commitment prior to the
settlement if the Adviser deems it appropriate to do so.
OTHER TECHNIQUES. Each Fund may engage in short sales in an amount not
exceeding 5% of the Fund's net assets. Each Fund may make loans of portfolio
securities provided the aggregate amounts of such loans do not exceed 5% of the
Fund's net assets. Each Fund may borrow money only for liquidity purposes in an
amount not exceeding 5% of the Fund's total assets at the time the borrowing is
made. Reverse repurchase agreements are considered borrowings for this purpose.
Assets of a Fund may be pledged in connection with borrowings. See "Additional
Information About Fund Investments" and "Investment Limitations" in the
Statement of Additional Information.
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
applicable Fund. The investment objective of each Fund may be changed without
the affirmative vote of a majority of the outstanding shares of the Fund. All
investment policies are non- fundamental unless indicated as fundamental in this
Prospectus or in the Statement of Additional Information.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of a Fund have equal voting rights and liquidation
rights.
INVESTMENT PERFORMANCE
Each Fund may periodically advertise "average annual total return." The
"total return" of a Fund refers to the dividends and distributions generated by
an investment in the Fund plus the change in the value of the investment from
the beginning of the period to the end of the period. The "average annual total
return" of a Fund refers to the rate of total return for each year of the period
which would be equivalent to the cumulative total return for the period. All
dividends and distributions earned on the investment are assumed to be
reinvested.
Each Fund may also periodically advertise its total return and
cumulative total return over various periods in addition to the value of a
$10,000 investment (made on the date of the initial public offering of the
Fund's shares) as of the end of a specified period. The "total return" and
"cumulative total return" for each Fund are calculated as indicated above for
"total return."
The Fixed Income Fund may periodically advertise its yield for a thirty
day or one month period. The "yield" of the Fixed Income Fund refers to the
income generated by an investment in the Fund over the period, calculated on a
per share basis (using the net asset value per share on the last day of the
period and the average number of shares outstanding during the period). The
Fund's yield quotation will always be accompanied by the Fund's average annual
total return information described above. The Funds may also include in
advertisements data comparing performance with other mutual Funds as reported in
non-related investment media, published editorial comments and performance
- 21 -
<PAGE>
rankings compiled by independent organizations and publications that monitor the
performance of mutual funds (such as Lipper Analytical Services or Morningstar).
Performance information may be quoted numerically or may be presented in a
table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index, the Dow Jones Industrial Average, or the Shearson Lehman
Bond Indexes. The Trust's annual report contains additional performance
information that will be made available upon request and without charge.
THE ADVERTISED PERFORMANCE DATA OF EACH FUND IS BASED ON HISTORICAL
PERFORMANCE AND IS NOT INTENDED TO INDICATE FUTURE PERFORMANCE. YIELDS AND RATES
OF TOTAL RETURN QUOTED BY A FUND MAY BE HIGHER OR LOWER THAN PAST QUOTATIONS,
AND THERE CAN BE NO ASSURANCE THAT ANY YIELD RATE OF TOTAL RETURN WILL BE
MAINTAINED. THE PRINCIPAL VALUE OF AN INVESTMENT IN EACH FUND WILL FLUCTUATE SO
THAT A SHAREHOLDER'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE
SHAREHOLDER'S ORIGINAL INVESTMENT.
INVESTMENT ADVISER
Equity Analysts Inc.
9200 Montgomery Road
Building D, Suite 13A
Cincinnati, Ohio 45242
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
AUDITORS
Berge & Company LTD
20 West Ninth Street
Cincinnati, Ohio 45202
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
either Fund. This Prospectus does not constitute an offer by either Fund to sell
its shares in any state to any person to whom it is unlawful to make such offer
in such state.
- 22 -
<PAGE>
TABLE OF CONTENTS
PAGE
FUND EXPENSES............................................................2
FINANCIAL HIGHLIGHTS.....................................................2
INVESTMENT OBJECTIVES AND STRATEGIES.....................................3
HOW TO INVEST IN EACH FUND...............................................4
EXCHANGE PRIVILEGE.......................................................6
REDEMPTION OF SHARES.....................................................7
SHARE PRICE CALCULATION..................................................9
DIVIDENDS AND DISTRIBUTIONS..............................................10
TAXES ................................................................10
TRUSTEES AND OFFICERS....................................................11
OPERATION OF THE FUNDS...................................................12
INVESTMENT POLICIES AND TECHNIQUES.......................................13
GENERAL INFORMATION......................................................20
INVESTMENT PERFORMANCE...................................................20
<PAGE>
ANALYSTS INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 1, 1997
*ANALYSTS STOCK FUND
*ANALYSTS FIXED INCOME FUND
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Analysts Investment Trust dated
December 1, 1997. A copy of the Prospectus can be obtained by writing the Trust
at 9200 Montgomery Road, Building D, Suite 13A, Cincinnati, Ohio 45242, or by
calling the Trust at (513) 984-3377.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ANALYSTS INVESTMENT TRUST
9200 MONTGOMERY ROAD
BUILDING D, SUITE 13A
CINCINNATI, OHIO 45242
TABLE OF CONTENTS
-----------------
PAGE
----
DESCRIPTION OF THE TRUST....................................................3
TRUSTEE COMPENSATION........................................................4
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS...............................4
INVESTMENT LIMITATIONS......................................................12
STATE RESTRICTIONS..........................................................14
THE INVESTMENT ADVISER......................................................14
PORTFOLIO TRANSACTIONS AND BROKERAGE........................................15
DETERMINATION OF SHARE PRICE................................................16
INVESTMENT PERFORMANCE......................................................17
CUSTODIAN AND TRANSFER AGENT................................................19
ACCOUNTANTS.................................................................19
- 2 -
<PAGE>
DESCRIPTION OF THE TRUST
Analysts Investment Trust (the "Trust") is a diversified, open-end
investment company established under the laws of Ohio by an Agreement and
Declaration of Trust dated May 28, 1993 (the "Trust Agreement"). The Trust
Agreement permits the Trustees to issue an unlimited number of shares of
beneficial interest of separate series without par value. Shares of two series
have been authorized, which shares constitute the interests in Analysts Stock
Fund and Analysts Fixed Income Fund.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series which each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his express consent.
Upon sixty days prior written notice to shareholders, a Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. Each
share of each Fund is subject to redemption at any time if the Board of Trustees
determines in its sole discretion that failure to so redeem may have materially
adverse consequences to all or any of the shareholders of the Trust or any Fund
of the Trust. For example, if the Trustees determine that failure to redeem
might have materially adverse tax consequences to all or any of the shareholders
due to changes in tax laws, the Trustees may exercise their discretion to redeem
shares. For other information concerning the purchase and redemption of shares
of the Funds, see "How to Invest in Each Fund," "Redemption of Shares" and
"Exchange Privilege" in the Prospectus. For a description of the methods used to
determine the share price and value of each Fund's assets, see "Share Price
Calculation" in the Prospectus.
As of September 1, 1997, the following persons owned five percent (5%)
or more of the Stock Fund: David L. Manzler, Sr., 8425 Blue Cut Lane, Cincinnati
Ohio - 10.56%; Yong Kim, 487 Indian Ripple, Wilmington, Ohio - 6.62%.
As of September 1, 1997, the following persons owned five percent (5%)
or more of the Fixed Income Fund: Richard Thomas, 6250 Hawk Ridge Lane,
Cincinnati, Ohio - 5.68%; Equity Analysts, Inc. 9200 Montgomery Road, Bldg. D,
Suite 13A, Cincinnati, Ohio - 15.97%.
- 3 -
<PAGE>
As of September 1, 1997, the Trustees and Officers as a group
beneficially owned 12.80% of the Stock Fund and 19.92% of the Fixed Income Fund.
TRUSTEE COMPENSATION
The compensation paid to the Trustees of the Trust for the year ended
July 31, 1997 is set forth in the following table:
<TABLE>
<CAPTION>
TOTAL COMPENSATION FROM
AGGREGATE COMPENSATION TRUST (THE TRUST IS NOT IN A
NAME FROM TRUST(1) FUND COMPLEX)(1)
<S> <C> <C>
David Lee Manzler, Jr. $ 0 $ 0
David L. Manzler, Sr. $ 0 $ 0
Walter E. Bowles, III $400 $400
Robert W. Buechner $400 $400
David J. Orth $400 $400
Anthony J. Schement $400 $400
<FN>
(1) Trustee fees are Trust expenses. However, because the management
agreement obligates the Adviser to pay all of the operating expenses of
the Trust (with limited exceptions), the Adviser makes the actual
payment.
</FN>
</TABLE>
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS
This section contains a more detailed discussion of some of the
investments a Fund may make and some of the techniques it may use, as described
in the Prospectus (see "Investment Objectives and Strategies" and "Investment
Policies and Techniques").
A. CORPORATE DEBT SECURITIES. Corporate debt securities are bonds or
notes issued by corporation and other business organizations, including business
trusts, in order to finance their credit needs. Corporate debt securities
include commercial paper which consists of short term (usually from one to two
hundred seventy days) unsecured promissory notes issued by corporations in order
to finance their current operations.
- 4 -
<PAGE>
Both Funds may invest in fixed income securities rated B or higher by
Standard & Poor's Corporation ("S&P") or by Moody's Investors Services, Inc.
("Moody's"), or if unrated, determined by the Adviser to be of comparable
quality. Generally, investments in securities in the lower rating categories
provide higher yields but involve greater volatility of price and risk of loss
of principal and interest than investments in securities with higher ratings.
Securities rated lower than Baa by Moody's or BBB by S&P are considered
speculative. In addition, lower ratings reflect a greater possibility of an
adverse change in the financial conditions affecting the ability of the issuer
to make payments of principal and interest. The market price of lower rated
securities generally responds to short term corporate and market developments to
a greater extent than higher rated securities which react primarily to
fluctuations in the general level of interest rates. Lower rated securities will
also be affected by the market's perception of their credit quality and the
outlook for economic growth. In the past, economic downturns or an increase in
interest rates have under certain circumstances caused a higher incidence of
default by the issuers of these securities and may do so in the future,
especially in the case of highly leveraged issuers.
The prices for these securities may be affected by legislative and
regulatory developments. For example, new federal rules require that savings and
loan associations gradually reduce their holdings of high-yield securities. An
effect of such legislation may be to significantly depress the prices of
outstanding lower rated securities. The market for lower rated securities may be
less liquid than the market for higher rated securities. Furthermore, the
liquidity of lower rated securities may be affected by the market's perception
of their credit quality. Therefore, judgment may at times play a greater role in
valuing these securities than in the case of higher rated securities, and it
also may be more difficult during certain adverse market conditions to sell
lower rated securities at their fair value to meet redemption requests or to
respond to changes in the market.
If the rating of a security by S&P or Moody's drops below investment
grade, the Adviser will dispose of the security as soon as practicable
(depending on market conditions) unless the Adviser determines based on its own
credit analysis that the security provides the opportunity of meeting the Fund's
objective without presenting excessive risk. The Adviser will consider all
factors which it deems appropriate, including ratings, in making investment
decisions for the Funds and will attempt to minimize investment risk through
diversification, investment analysis and monitoring of general economic
conditions and trends. While the Adviser may refer to ratings, it does not rely
exclusively on ratings, but makes its own independent and ongoing review of
credit quality. Neither Fund will invest more than 5% of the value of its net
assets in securities that are below investment grade.
B. MUNICIPAL SECURITIES. Municipal securities are issued to obtain
funds to construct, repair or improve various public facilities such as
airports, bridges, highways, hospitals, housing, schools, streets and water and
sewer works, to pay general operating expenses or to refinance outstanding
debts. They also may be issued to finance various private activities, including
the lending of funds to public or private institutions for construction of
housing, educational or medical facilities or the financing of privately owned
or operated facilities. Municipal securities consist of tax exempt bonds, tax
exempt notes and tax exempt commercial paper. Tax exempt notes generally are
used to provide short term capital needs and generally have maturities of one
year or less. Tax exempt commercial paper typically represents short term,
unsecured, negotiable promissory notes.
- 5 -
<PAGE>
The two principal classifications of municipal securities are" general
obligations" and "revenue" bonds. General obligation bonds are backed by the
issuer's full credit and taxing power. Revenue bonds are backed by the revenues
of a specific project, facility or tax. Industrial development revenue bonds are
a specific type of revenue bond backed by the credit of the private issuer of
the facility, and therefore investments in these bonds have more potential risk
that the issuer will not be able to meet scheduled payments of principal and
interest. Neither Fund will invest more than 5% of its net assets in municipal
securities.
C. ZERO COUPON AND PAY IN KIND BONDS. Corporate debt securities and
municipal securities include so-called "zero coupon" bonds and "pay-in-kind"
bonds. Zero coupon bonds are issued at a significant discount from their
principal amount in lieu of paying interest periodically. Pay-in-kind bonds
allow the issuer, at its option, to make current interest payments on the bonds
either in cash or in additional bonds. The value of zero coupon bonds and
pay-in-kind bonds is subject to greater fluctuation in response to changes in
market interest rates than bonds which make regular payments of interest. Both
of these types of bonds allow any issuer to avoid the need to generate cash to
meet current interest payments. Accordingly, such bonds may involve greater
credit risks than bonds which make regular payment of interest. Even though zero
coupon bonds and pay-in-kind bonds do not pay current interest in cash, the
applicable Fund is required to accrue interest income on such investments and to
distribute such amounts at least annually to shareholders. Thus, a Fund could be
required at times to liquidate other investments in order to satisfy its
dividend requirements. Neither Fund will invest more than 5% of its net assets
in zero coupon bonds or pay-in-kind bonds.
D. FINANCIAL SERVICE INDUSTRY OBLIGATIONS. Financial service industry
obligations including among others, the following:
(1) CERTIFICATES OF DEPOSIT. Certificates of deposit are
negotiable certificates evidencing the indebtedness of a commercial bank or a
savings and loan association to repay funds deposited with it for a definite
period of time (usually from fourteen days to one year) at a stated or variable
interest rate.
(2) TIME DEPOSITS. Time deposits are non-negotiable deposits
maintained in a banking institution or a savings and loan association for a
specified period of time at a stated interest rate. Time deposits are considered
to be illiquid prior to their maturity.
(3) BANKERS' ACCEPTANCES. Bankers' acceptances are credit
instruments evidencing the obligation of a bank to pay a draft which has been
drawn on it by a customer, which instruments reflect the obligation both of the
bank and of the drawer to pay the face amount of the instrument upon maturity.
E. ASSET-BACKED AND RECEIVABLE-BACKED SECURITIES. Each Fund is
permitted to invest in asset-backed and receivable-backed securities. Several
types of asset-backed and receivable-backed securities are available to
investors, including CARs(sm) (Certificates for Automobile Receivables(sm)) and
interests in pools of credit card receivables. Asset-backed and
receivable-backed securities are undivided fractional interests in pools of
consumer loans (unrelated to mortgage loans) held in a trust. Payments or
principal and interest are passed through to certificateholders and are
typically
- 6 -
<PAGE>
supported by some form of credit enhancement, such as a letter of credit, surety
bond, limited guaranty, or senior/subordination. The degree of credit
enhancement varies, but generally amounts to only a fraction of the asset-backed
and receivable-backed security's par value until exhausted. If the credit
enhancement is exhausted, certificateholders may experience losses or delays in
payment if the requirement payments of principal and interest are not made to
the trust with respect to the underlying loans. The value of these securities
also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the loan pool, the originator of the
loans or the financial institution providing the credit enhancement.
Asset-backed and receivable-backed securities are ultimately dependent upon
payment of consumer loans by individuals, and the certificateholder generally
has no recourse against the entity that originated the loans. The underlying
loans are subject to prepayments which shorten the securities' weighted average
life and may lower their return. As prepayments flow through at par, total
returns would be affected by the prepayments: if a security were trading at a
premium, its total return would be lowered by prepayments, and if a security
were trading at a discount, its total return would be increased by prepayments.
Neither Fund will invest more than 5% of its net assets in asset-backed or
receivable-backed securities.
F. FORWARD COMMITMENTS AND REVERSE REPURCHASE AGREEMENTS. Each Fund may
enter into reverse repurchase agreements. Reverse repurchase agreements involve
sales of portfolio security by a Fund to member banks of the Federal Reserve
System or recognized securities dealers, concurrently with an agreement by the
Fund to repurchase the same securities at a later date at a fixed price, which
is generally equal to the original sales price plus interest. The Fund retains
record ownership and the right to receive interest and principal payments on the
portfolio security involved. The Fund's objective in such a transaction would be
to obtain funds to pursue additional investment opportunities whose yield would
exceed the cost of the reverse repurchase transaction. Generally, the use of
reverse repurchase agreements should reduce portfolio turnover and increase
yield. In the event of bankruptcy or other default by the purchaser, the Fund
could experience both delays in repurchasing the portfolio securities and
losses. Reverse repurchase agreements constitute a borrowing by a Fund and will
not represent more than 5% of the net assets of either Fund.
Each Fund will direct its Custodian to place cash or U.S. government
obligations in a separate account of the Trust in an amount equal to the
commitments of the Fund to purchase or repurchase securities as a result of its
forward commitment or reverse repurchase agreement obligations. With respect to
forward commitments to sell securities, the Trust will direct its Custodian to
place the securities in a separate account. When a separate account is
maintained in connection with forward commitment transactions to purchase
securities or reverse repurchase agreements, the securities deposited in the
separate account will be valued daily at market for the purpose of determining
the adequacy of the securities in the account. If the market value of such
securities declines, additional cash or securities will be placed in the account
on a daily basis so that the market value of the account will equal the amount
of the Fund's commitments to purchase or repurchase securities. To the extend
funds are in a separate account, they will not be available for new investment
or to meet redemptions.
Securities purchased on a forward commitment basis, securities subject
to reverse repurchase agreements and the securities held in each Fund's
portfolio are subject to changes in market value based upon the public's
perception of the creditworthiness of the issuer and changes in the level of
- 7 -
<PAGE>
interest rates (which will generally result in all of those securities changing
in value in the same way, I.E., all those securities experiencing appreciation
when interest rates decline and depreciation when interest rates rise).
Therefore, if in order to achieve a higher level of income, the Fund remains
substantially fully invested at the same time that it has purchased securities
on a forward commitment basis or entered into reverse repurchase transactions,
there will be a possibility that the market value of the Fund's assets will have
greater fluctuation.
With respect to 75% of the total assets of each Fund, the value of the
Fund's commitments to purchase or repurchase the securities of any one issuer,
together with the value of all securities of such issuer owned by the Fund, may
not exceed 5% of the value of the Fund's total assets at the time the commitment
to purchase or repurchase such securities is made; provided, however, that this
restriction does not apply to U.S. government obligations or repurchase
agreements with respect thereto. In addition, each Fund will maintain as asset
coverage of 300% for all of its borrowings and reverse repurchase agreements.
Subject to the foregoing restrictions, there is no limit on the percentage of
the Fund's total assets which may be committed to such purchases or repurchases.
G. LOAN PARTICIPATION INTERESTS. Loan participation interests are
interests in debt obligations (such as corporate loans) that are owned by banks
or other financial institutions. Loan participation interests are subject to the
credit risks generally associated with the corporate borrower; however, certain
loan participation interests may be backed by irrevocable letters of credit or a
guarantee of the bank or financial institution. In the event of a default by the
corporate borrower, a Fund may be required to assert its rights through the
financial intermediary which may subject the Fund to delays, expenses and risks
that are greater than those that would have been involved if the Fund had
purchased a direct obligation (such as commercial paper) of such borrower.
Moreover, the Fund may also be subject to the risk that the financial
intermediary may become insolvent. Neither Fund will invest more than 5% of its
net assets at the time of purchase in loan participation interests.
H. ILLIQUID SECURITIES. The portfolio of each Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements and time deposits maturing in
more than seven days, options traded in the over-the-counter market, nonpublicly
offered securities, stripped CMOs, CMOs for which there is no established
market, restricted securities, and mortgage-related securities which cannot be
disposed of within seven days in the usual course of business without taking a
reduced price. The Adviser and the Trustees will continually monitor the
secondary markets for mortgage-related securities and are responsible for making
the determination of which securities are considered to be illiquid. Neither
Fund will invest more than 5% of its net assets in illiquid securities.
I. RESTRICTED SECURITIES. Restricted securities are securities the
resale of which is subject to legal or contractual restrictions. Restricted
securities may be sold only in privately negotiated transactions, in a public
offering with respect to which a registration statement is in effect under the
Securities Act of 1933 or pursuant to Rule 144 or Rule 144A promulgated under
such Act. Where registration is required, the Fund may be obligated to pay all
or part of the registration expense, and
- 8 -
<PAGE>
a considerable period may elapse between the time of the decision to sell and
the time such security may be sold 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 the price it could have obtained when it
decided to sell.
J. OPTION TRANSACTIONS. Each Fund may engage in option
transactions involving equity securities, debt securities, futures contracts,
stock indexes and foreign currencies. An option involves either (a) the right or
the obligation to buy or sell a specific instrument or currency at a specific
price until the expiration date of the option, or (b) the right to receive
payments or the obligation to make payments representing the difference between
the closing price of a market index and the exercise price of the option
expressed in dollars times a specified multiple until the expiration date of the
option. Options are sold (written) on equity securities, debt securities, future
contracts, stock indexes and foreign currencies. The purchaser of an option on
an equity security, debt security, futures contract or foreign currency pays the
seller (the writer) a premium for the right granted but is not obligated to but
or sell the underlying security, futures contract or currency. The purchaser of
an option on a stock index pays the seller a premium for the right granted, and
in return the seller of such an option is obligated to make the payment. A
writer of an option may terminate the obligation prior to expiration of the
option by making an offsetting purchase of an identical option. Options are
traded on organized exchanges and in the over-the-counter market. Options which
each Fund sells (writes) will be covered or secured, which means that it will
own the underlying security, futures contracts or currency in the case of a call
option and that the Fund will segregate with the Trust's Custodian liquid assets
sufficient to purchase the underlying security, futures contracts or currency in
the case of a put option. Each Fund will also segregate and maintain with the
Custodian liquid assets equal to the market value of each put option sold
(written) by the Fund on a stock index. In addition, when a Fund writes options,
it may be required to maintain a margin account, to pledge the underlying
securities or U.S. government obligations or to deposit assets in escrow with
the Custodian.
The purchase and writing of options involves certain risks.
The purchase of options limits a Fund's potential loss to the amount of the
premium paid and can afford the Fund the opportunity to profit from favorable
movements in the price of an underlying security or instrument to a greater
extent than if transactions were effected in the security or instrument
directly. However, the purchase of an option could result in a Fund losing a
greater percentage of its investment than if the transaction were effected
directly. When a Fund writes a covered call option, it will receive a premium,
but it will give up the opportunity to profit from a price increase in the
underlying security or instrument above the exercise price as long as its
obligation as a writer continues, and it will retain the risk of loss should the
price of the security or instrument decline. When a Fund writes a secured put
option, it will assume the risk that the price of the underlying security or
instrument will fall below the exercise price, in which case the Fund may be
required to purchase the security or instrument at a higher price than the
market price of the security or instrument. In addition, there can be no
assurance that a Fund can effect a closing transaction on a particular option it
has written or that a liquid secondary market will exist for any particular
option at any specific time. Further, the total premium paid for any option may
be lost if the Fund does not exercise the option or, in the case of
over-the-counter options, the writer does not perform its obligations.
- 9 -
<PAGE>
K. HEDGING TRANSACTIONS. Either Fund may hedge all or a portion of its
portfolio investments through the use of options, futures contracts and options
on futures contracts. The objective of the hedging program is to protect a
profit or offset a loss in a portfolio security from future price erosion or to
assure a definite price for a security by acquiring the right or option to
purchase or to sell a fixed amount of the security at a future date. For
example, in order to hedge against an anticipated rise in interest rates that
might cause the value of a Fund's portfolio securities to decline, the Fund
might sell interest rate futures contracts. When hedging of this character is
successful, any depreciation in the value of the hedged portfolio securities
will be substantially offset by an increase in the Fund's equity in the interest
rate futures position. Alternatively, an interest rate futures contract may be
purchased when a Fund anticipates the future purchase of a security but expects
the rate of return then available in the securities market to be less favorable
than rates currently available in the futures markets.
There is no assurance that the objective of the hedging
program will be achieved, since the success of the program will depend on the
Adviser's ability to predict the future direction of the relevant currency,
stock index, futures contract or interest rates and incorrect predictions by the
Adviser may have an adverse effect on the Funds. In this regard, it should be
noted that the skills and techniques necessary to arrive at such predictions are
different from those needed to predict price changes in individual stocks. The
Adviser is registered as a Commodity Trading Advisor with the Commodity Futures
Trading Commission, is a member of the National Futures Association and has
prior experience in the use of options, futures contracts and options on futures
contracts.
The hedging strategy involves the use of one or more
techniques, including buying and selling options (described above), futures
contracts and options on such futures contracts. A futures contract is a binding
contractual commitment which involves either (a) the delivery and payment for a
specified amount of securities or currency at a price agreed upon at the time
the contract is entered into but with actual delivery made during a specified
period in the future, or (b) the payment or receipt of payments representing,
respectively, the loss or gain of a specified group of stocks or market index.
The securities or currency underlying the contract may be government or
corporate bonds (an interest rate futures contract), foreign currency (a foreign
currency futures contract), or a group of stocks such as a popular market index
(a stock index futures contract). Interest rate futures contracts are currently
available in standardized amounts on government obligations (such as Treasury
bills, notes and bonds), Government National Mortgage Association certificates,
corporate bonds, domestic certificates of deposit and Eurodollar certificates of
deposit. It is expected that other financial instruments will at later dates be
subject to other futures contracts. As new futures contracts are developed and
offered to investors, the Adviser will, consistent with each Fund's investment
objectives and policies, consider making investments in such new futures
contracts. Ordinarily a Fund would enter into interest rate futures contracts to
hedge its investments in fixed income securities such as preferred stocks and
money market obligations, stock index futures contracts to hedge its investments
in common stocks and foreign currency futures contracts to hedge currency risks
associated with investments in foreign securities.
Futures contracts are traded on exchanges licensed and
regulated by the Commodity Futures Trading Commission and analogous foreign
regulatory agencies. Each Fund will be subject to any limitations imposed by the
exchanges with respect to futures contracts trading and positions.
- 10 -
<PAGE>
A clearing corporation associated with the particular exchange assumes
responsibility for all purchases and sales and guarantees delivery and payment
on the contracts. Although most futures contracts call for actual delivery or
acceptance of the underlying securities or currency, in most cases the contracts
are closed out before settlement date without the making or taking of delivery.
Closing out is accomplished by entering into an offsetting transaction, which
may result in a profit or a loss. There is no assurance that either Fund will be
able to close out a particular futures contract.
A hedging strategy involving options and futures contracts
entails some risks. For example, the total premium paid for an option on a
futures contract may be lost if a Fund does not exercise the option or the
writer does not perform his obligations. It is also possible that the futures
contracts selected by a Fund will not follow the price movement of the
underlying securities or stock index. If this occurs, the hedging strategy may
not be successful. Further, if a Fund sells a stock index futures contract and
is required to pay an amount measured by any increase in the market index, it
will be exposed to an indeterminate liability. In addition, a liquid secondary
market may not exist for any particular option or futures contract at any
specific time.
Each Fund will incur transactional costs in connection with
the hedging program. When a Fund purchases or sells a futures contract, an
amount of cash and liquid assets will be deposited in a segregated account with
the Trust's Custodian to guarantee performance of the futures contract. The
amount of such deposits will depend upon the requirements of each exchange and
broker and will vary with each futures contract. Because open futures contract
positions are marked to market and gains and losses are settled on a daily
basis, a Fund may be required to deposit additional funds in such a segregated
account if it has incurred a net loss on its open futures contract positions on
any day.
The Trust has filed a supplemental notice of eligibility with
the Commodity Futures Trading Commission ("CFTC") to claim relief from
regulation as a commodity "pool" within the meaning of the CFTC's regulations.
In its filing, the Trust has represented that each Fund's transactions in
futures contracts and options on futures contracts will constitute bona fide
hedging transactions within the meaning of such regulations and that each Fund
will enter into commitments which require as deposits for initial margin for
futures contracts or premiums for options no futures contracts no more than 5%
of the fair market value of its assets.
L. LOANS OF PORTFOLIO SECURITIES. Each Fund may make short and long
term loans of its portfolio securities. Under the lending policy authorized by
the Board of Trustees and implemented by the Adviser in response to requests of
broker-dealers or institutional investors which the Adviser deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be important. With respect
to loans of securities, there is the risk that the borrower may fail to return
the loaned securities or that the borrower may not be able to provide additional
collateral. No loan of securities will be made if, as a result, the aggregate
amount of such loans would exceed 5% of the value of the Fund's total assets.
- 11 -
<PAGE>
M. SHORT SALES. Each Fund may sell a security short in anticipation of
a decline in the market value of the security. When a Fund engages in a short
sale, it sells a security which it does not own. To complete the transaction,
the Fund must borrow the security in order to deliver it to the buyer. The Fund
must replace the borrowed security by purchasing it at the market price at the
time of replacement, which may be more or less than the price at which the Fund
sold the security. The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund will realize a
profit if the security declines in price between those dates.
In connection with its short sales, a Fund will be required to
maintain a segregated account with its Custodian of cash or high grade liquid
assets equal to the market value of the securities sold less any collateral
deposited with its broker. The Fund will limit its short sales so that no more
than 5% of its net assets (less all its liabilities other than obligations under
the short sales) will be deposited as collateral and allocated to the segregated
account. However, the segregated account and deposits will not necessarily limit
the Fund's potential loss on a short sale, which is limited.
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), I.E., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the applicable Fund. As used in the
Prospectus and this Statement of Additional Information, the term "majority" of
the outstanding shares of the Trust (or of any series) means the lesser of (1)
67% or more of the outstanding shares of the Trust (or the applicable series)
present at a meeting, if the holders of more than 50% of the outstanding shares
of the Trust (or applicable series) are present or represented at such meeting;
or (2) more than 50% of the outstanding shares of the Trust (or the applicable
series). Other investment practices which may be changed by the Board of
Trustees without the approval of shareholders to the extent permitted by
applicable law, regulation or regulatory policy are considered non-fundamental
("Non-Fundamental").
1. BORROWING MONEY. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. SENIOR SECURITIES. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder, or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and this
Statement of Additional Information.
- 12 -
<PAGE>
3. UNDERWRITING. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in securities which are secured by
or represent interests in real estate. This limitation does not preclude the
Fund from investing in mortgage-related securities, or investing in companies
which are engaged in the real estate business or have a significant portion of
their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. LOANS. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. CONCENTRATION. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
NON-FUNDAMENTAL. The following limitations have been adopted by the
Trust with respect to each Fund and are Non-Fundamental.
i. PLEDGING. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in
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<PAGE>
connection with borrowings described in limitation (1) above. Margin deposits,
security interests, liens and collateral arrangements with respect to
transactions involving options, futures contracts, short sales and other
permitted investments and techniques are not deemed to be a mortgage, pledge or
hypothecation of assets for purposes of this limitation.
ii. MARGIN PURCHASES. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iii. OPTIONS. The Fund will not purchase or sell puts, calls, options
or straddles except as described in the Prospectus and this Statement of
Additional Information.
iv. ILLIQUID INVESTMENTS. The Fund will not invest more than 5% of its
net assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
STATE RESTRICTIONS
To comply with the current blue sky regulations of the State of Ohio,
each Fund presently intends to observe the following restrictions, which may be
changed by the Board of Trustees without shareholder approval.
Each Fund will not purchase or retain securities of any issuer if the
Trustees and officers of the Trust or of the Adviser, who individually own
beneficially more than 0.5% of the outstanding securities of such issuer,
together own beneficially more than 5% of such securities. Each Fund will not
purchase securities issued by other investment companies except by purchase in
the open market where no commission or profit to a sponsor or dealer results
from such purchase other than customary broker's commission or except when such
purchase is part of a plan of merger, consolidation, reorganization or
acquisition. Each Fund will not borrow (other than by entering into reverse
repurchase agreements), pledge, mortgage or hypothecate more than one-third of
its total assets. In addition, each Fund will engage in borrowing (other than
reverse repurchase agreements) only for emergency or extraordinary purposes and
not for leverage. Each Fund will not invest more than 15% of its total assets in
securities of issuers which, together with any predecessors, have a record of
less than three years continuous operation or securities of issuers which are
restricted as to disposition. Each Fund will not purchase the securities of any
issuer if such purchase at the time thereof would cause more than 10% of the
voting securities of any issuer to be held by the Fund. Neither Fund will
purchase securities of an issuer if, as to 50% of the Fund's total assets, the
purchase at the time thereof would cause more than 25% of the Fund's total
assets to be invested in the securities of any one issuer and, as to the
remaining 50% of the Fund's assets, the purchase at the time thereof would cause
more than 25% of the Fund's total assets to be invested in the securities of any
one issuer. This limitation does not apply to obligations of the United States
government or its agencies or instrumentalities.
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<PAGE>
THE INVESTMENT ADVISER
The Trust's investment adviser is Equity Analysts Inc., 9200 Montgomery
Road, Building D, Suite 13A, Cincinnati, Ohio 45242. David Lee Manzler, Jr. and
David L. Manzler, Sr. may be deemed to be controlling persons and affiliates of
the Adviser due to their ownership of its shares and their positions,
respectively, as officers and directors of the Adviser. The Manzlers, because of
such affiliation, may receive benefits from the management fees paid to the
Adviser.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages the Funds' investments subject to approval of the Board of
Trustees and pays all of the expenses of the Funds except brokerage, taxes,
interest and extraordinary expenses. As compensation for the Adviser's
management services and agreement to pay the Fund's expenses, Analysts Stock
Fund is obligated to pay the Adviser a fee computed and accrued daily and paid
monthly at an annual rate of 2.00% of the average daily net assets of the Fund
up to and including $20,000,000, 1.75% of such assets from $20,000,000 to and
including $40,000,000, 1.5% of such assets from $40,000,000 to and including
$100,000,000 and 1.25% of such assets in excess of $100,000,000. As compensation
for the Adviser's management services and agreement to pay the Fund's expenses,
Analysts Fixed Income Fund is obligated to pay the Adviser a fee computed and
accrued daily and paid monthly at an annual rate of 1.5% of the average daily
net assets of the Fund up to and including $20,000,000, 1.25% of such assets
from $20,000,000 to and including $40,000,000, 1.00% of such assets from
$40,000,000 to and including $100,000,000 and .75% of such assets in excess of
$100,000,000.
For the fiscal year ended July 31, 1997, the Analysts Stock Fund paid
advisory fees of $92,420 to the Adviser and the Analysts Fixed Income Fund paid
advisory fees of $48,746 to the Adviser. For the fiscal year ended July 31,
1996, the Analysts Stock Fund paid advisory fees of $63,141 to the Adviser and
the Analysts Fixed Income Fund paid advisory fees of $27,934 to the Adviser. For
the fiscal year ended July 31, 1995, the Analysts Stock Fund paid advisory fees
of $42,424 to the Adviser and the Analysts Fixed Income Fund paid advisory fees
of $18,386 to the Adviser.
The Adviser retains the right to use the name "Analysts" in connection
with another investment company or business enterprise with which the Adviser is
or may become associated, The Trust's right to use the name "Analysts"
automatically ceases thirty days after termination of the Agreement and may be
withdrawn by the Adviser on thirty days written notice.
Equity Analysts Inc. is also the exclusive underwriter for the
distribution of shares of the Funds. Equity Analysts Inc. is obligated to sell
shares of each Fund on a best efforts basis for no compensation. Shares of each
Fund are offered to the public on a continuous basis.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Trust's portfolio decisions and the placing
of the Trust's portfolio transactions. In placing portfolio transactions, the
Adviser seeks to the best qualitative execution for the Trust,
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<PAGE>
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer. The Adviser generally seeks favorable
prices and commission rates that are reasonable in relation to the benefits
received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Trust and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analysis, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Trust effects securities
transactions may also be used by the Adviser in servicing all of its accounts
and all such services may not be used by the Adviser in connection with the
Trust. Similarly, research and information provided by brokers or dealers
serving other clients may be useful to the Adviser in connection with its
services to the Trust. Although research services and other information are
useful to the Trust and the Adviser, it is not possible to place a dollar value
on the research and other information received. It is the opinion of the Board
of Trustees and the Adviser that the review and study of the research and other
information will not reduce the overall cost to the Adviser of performing its
duties to the Trust under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to market makers may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
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<PAGE>
For the fiscal year ended July 31, 1997, the Analysts Stock Fund and
the Analysts Fixed Income Fund paid brokerage commissions of $5,691 and $3,474,
respectively. For the fiscal year ended July 31, 1996, the Analysts Stock Fund
and the Analysts Fixed Income Fund paid brokerage commissions of $2,937 and
$1,309 respectively. For the fiscal year ended July 31, 1995, the Analysts Stock
Fund and the Analysts Fixed Income Fund paid brokerage commissions of $3,770 and
$426, respectively.
DETERMINATION OF SHARE PRICE
The prices (net asset values) of the shares of each Fund is determined
as of the close of trading of the New York Stock Exchange (4:00 P.M., Eastern
time) on each day the Trust is open for business. The Trust is open for business
on every day except Saturdays, Sundays and the following holidays: New Year's
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas. For a description of the methods used to determine
the net asset value (share price), see "Share Price Calculation" in the
Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return (over the one and five year periods and the period from initial public
offering through the end of a Fund's most recent fiscal year) that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
A Fund's "yield" is determined in accordance with the method defined by
the Securities and Exchange Commission. 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]
Were:
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<PAGE>
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). With respect to the treatment of
discount and premium on mortgage or other receivable-backed obligations which
are expected to be subject to monthly paydowns of principals and interest, gain
or loss attributable to actual monthly paydowns is accounted for as an increase
or decrease to interest income during the period and discount or premium on the
remaining security is not amortized. The Fixed Income Fund's yield for the one
month period ended July 31, 1997 was 5.28%.
A Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time period
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Funds
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the appropriate
Fund or considered to be representative of the stock market in general or the
fixed income securities market in general. Analysts Stock Fund will use the
Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average. Analysts
Fixed Income Fund will use the Shearson Lehman Intermediate Government/Corporate
Bond Index. The Shearson Lehman Intermediate Government/Corporate Bond Index
measures the price, income and total return of a group of fixed income
securities maturing in one to ten years. It contains all public obligations of
the U.S. Treasury (excluding flower bonds and foreign-targeted issues), all
publicly traded debt of agencies of the U.S. Government, quasi-federal
corporations and corporate debt guaranteed by the U.S. Government, and all
public, fixed rate, non-convertible, investment grade, domestic corporate debt.
The Index does not include mortgage-backed securities or collateralized mortgage
obligations. The investment performance figures for the Funds and the indices
will include reinvestment of dividends and capital gains distributions.
In addition, the performance of either Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall
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<PAGE>
performance, investment objectives and assets, such as Lipper Analytical
Services, Inc. or Morningstar, Inc. The objectives, policies, limitations and
expenses of other mutual funds in a group may not be the same as those of the
applicable Fund. Performance rankings and ratings reported periodically in
national financial publications such as Barron's may also be used.
ANALYSTS STOCK FUND. The average annual total returns of the Stock Fund
for the year ended July 31, 1997 and for the period from inception (August 25,
1993) through July 31, 1997 were 35.47% and 16.58%, respectively.
ANALYSTS FIXED INCOME FUND. The average annual total returns of the
Fixed Income Fund for the year ended July 31, 1997 and for the period from
inception (August 25, 1993) through July 31, 1997 were 12.05% and 4.79%,
respectively.
CUSTODIAN AND TRANSFER AGENT
Star Bank, N.A., 432 Walnut Street, Cincinnati, Ohio is Custodian of
the Funds' investments. The Custodian acts as each Fund's depository, safekeeps
its portfolio securities, collects all income and other payments with respect
thereto, disburses funds at the Fund's request and maintains records in
connection with its duties. The Trust acts as each Fund's transfer agent and, in
such capacity, 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 distribution disbursing agent
and performs other accounting and shareholder service functions.
ACCOUNTANTS
The firm of Berge and Company LTD, 20 West Ninth Street, Cincinnati,
Ohio 45202, has been selected as independent public accountants for the Trust
for the fiscal year ending July 31, 1998.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in this Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the period ended
July 31, 1997. The Funds will provide the Annual Report without charge at
written request or request by telephone.
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<PAGE>
ANALYSTS INVESTMENT TRUST
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
- -------- ---------------------------------
(a) Financial Statements
Included in Part A:
(1) Financial Highlights, for a share
outstanding throughout the years ended July
31, 1997, 1996 and 1995 and the period from
inception (August 25, 1993) through July 31,
1994.
Included in Part B: The following documents are
incorporated by reference to the Analysts Investment
Trust 1997 Annual Report to Shareholders:
(1) Independent Auditors Report.
(2) Schedule of Investments in Securities,
Analysts Stock Fund - July 31, 1997.
(3) Schedule of Investments in Securities,
Analysts Fixed Income Fund - July 31, 1997.
(4) Statement of Assets and Liabilities - July
31, 1997.
(5) Statement of Operations - year ended July
31, 1997.
(6) Statement of Changes in Net Assets - years
ended July 31, 1997 and 1996.
(7) Financial Highlights - for a share
outstanding throughout the years ended July
31, 1997, 1996 and 1995 and the period from
inception (August 25, 1993) through July 31,
1994.
(8) Notes to Financial Statements - July 31,
1997.
(b) Exhibits
(1) Copy of Registrant's Declaration of Trust is
filed herewith.
(2) Copy of Registrant's By-Laws is filed
herewith.
<PAGE>
(3) Voting Trust Agreements - None.
(4) Instruments Defining the Rights of Holders
of Securities - None.
(5) Copy of Registrant's Management Agreement
with its Adviser, Equity Analysts Inc. is
filed herewith.
(6) Copy of Registrant's Underwriting Agreement
with Equity Analysts Inc. is filed herewith.
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of Directors or
Officers - None.
(8) Copy of Registrant's Custody Agreement with
the Custodian, Star Bank, N.A., is filed
herewith.
(9) Other Material Contracts - None.
(10) Opinion and Consent of Brown, Cummins &
Brown Co., L.P.A., which was filed with
Registrant's Form 24F-2 for the fiscal year
ended July 31, 1997, is hereby incorporated
by reference.
(11) Consent of Berge and Company LTD. is filed
herewith.
(12) Financial Statements Omitted from Item 23 -
None.
(13) Copy of Letter of Initial Stockholder is
filed herewith.
(14) Model Plan used in Establishment of any
Retirement Plan - None.
(15) 12b-1 Distribution Expense Plan - None.
<PAGE>
(16) Schedule for Computation of Each Performance
Quotation is filed herewith.
(17) Financial Data Schedule - None.
(18) Rule 18F-3 Plan - None.
(19) (i) Power of Attorney for Registrant and
Certificate with respect thereto, are filed
herewith.
(ii) Powers of Attorney for Trustees and officers
of Registrant are filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
- -------- -----------------------------------------------------------------
None
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES (AS OF JULY 31, 1997)
- -------- -----------------------------------------------------
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
Analysts Fixed Income Fund 415
Analysts Stock Fund 608
ITEM 27. INDEMNIFICATION
- -------- ---------------
(a) Article VI of the Registrant's Declaration of Trust
provides for indemnification of officers and Trustees
as follows:
SECTION 6.4 INDEMNIFICATION OF
TRUSTEES, OFFICERS, ETC. Subject to and
except as otherwise provided in the
Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of
its Trustees and officers (including persons
who serve at the Trust's request as
directors, officers or trustees of another
organization in which the Trust has any
interest as a shareholder, creditor or
otherwise (hereinafter referred to as a
"Covered Person") against all liabilities,
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 any Covered Person
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, in which such Covered
Person may be or may have been involved as a
party or otherwise or with which such person
may be or may have been threatened, while in
office or thereafter, by reason of being or
having been such a Trustee or officer,
director or trustee, and except that no
Covered Person shall be indemnified against
any liability to the Trust or its
Shareholders to which such Covered Person
would otherwise be subject by reason of
willful misfeasance, bad faith, gross
negligence or reckless disregard of the
duties involved in the conduct of such
Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES.
The Trust shall advance attorneys' fees or
other expenses incurred by a Covered Person
in defending a proceeding to the full extent
permitted by the Securities Act of 1933, as
amended, the 1940 Act, and Ohio Revised Code
Chapter 1707, as amended. In the event any
of these laws conflict with Ohio Revised
Code Section 1701.13(E), as amended, these
<PAGE>
laws, and not Ohio Revised Code Section
1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT
EXCLUSIVE, ETC. The right of indemnification
provided by this Article VI shall not be
exclusive of or affect any other rights to
which any such Covered Person may be
entitled. As used in this Article VI,
"Covered Person" shall include such person's
heirs, executors and administrators. Nothing
contained in this article shall affect any
rights to indemnification to which personnel
of the Trust, other than Trustees and
officers, and other persons may be entitled
by contract or otherwise under law, nor the
power of the Trust to purchase and maintain
liability insurance on behalf of any such
person.
The Registrant may not pay for insurance which
protects the Trustees and officers against
liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of
their offices.
(b) The Registrant may maintain a standard mutual fund
and investment advisory professional and directors
and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant,
its Trustees and officers, and its Adviser, among
others. Coverage under the policy would include
losses by reason of any act, error, omission,
misstatement, misleading statement, neglect or breach
of duty.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and
the Agreement and Declaration of the Registrant or
the By-Laws of the Registrant, or otherwise, the
Registrant has been advised that in the opinion of
the Securities and Exchange Commission such
indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant
of expenses incurred or paid by a trustee, officer or
controlling person of Analysts Investment Trust in
the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities
being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as
<PAGE>
expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
- -------- ----------------------------------------------------
A. Equity Analysts Inc. (the "Adviser") is a registered
investment adviser and broker- dealer. Prior to
January 1, 1993, it also provided pension
administration.
B. The following list sets forth the business and other
connections of the Directors and officers of Equity
Analysts Inc. during the past two years.
(1) David L. Manzler, Sr.
(a) Vice President and a Director of
Equity Analysts Inc., 9200
Montgomery Road, Bldg. D, Suite 13A,
Cincinnati, Ohio 45242.
(b) Vice President, Secretary and a
Trustee of The Analysts Trust, 9200
Montgomery Road, Bldg. D, Suite 13A,
Cincinnati, Ohio 45242.
(c) President of Equity Analysts Agency
Inc., 9200 Montgomery Road, Bldg. D,
Suite 13A, Cincinnati, Ohio 45242.
(d) Director of Cincinnati Steel
Products Co., 4540 Steel Place,
Cincinnati, Ohio 45209.
(2) David Lee Manzler, Jr.
(a) President, Secretary and Director of
Equity Analysts Inc., 9200
Montgomery Road, Bldg. D, Suite 13A,
Cincinnati, Ohio 45242.
(b) President, Treasurer and a Trustee
of The Analysts Trust, 9200
Montgomery Road, Bldg. D, Suite 13A,
Cincinnati, Ohio 45242.
(c) President, Manzler Aviation, Inc.
7760 Concord Hills Lane, Cincinnati,
Ohio 45243
(3) Bernard J. McEvoy - A Director, part-time
employee and registered representative of
Equity Analysts Inc., 9200 Montgomery Road,
Bldg. D, Suite 13A, Cincinnati, Ohio 45242.
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
- -------- ----------------------
(a) Equity Analysts Inc. acts as underwriter only for
Analysts Investment Trust.
<TABLE>
<CAPTION>
(b) POSITION WITH POSITION WITH
NAME UNDERWRITER REGISTRANT
---- ----------- ----------
<S> <C> <C>
David L. Manzler, Sr. Vice President Vice President,
and Director Secretary and
Trustee
David Lee Manzler, Jr. President, President,
Secretary and Treasurer
Director and Trustee
Bernard J. McEvoy Director None
</TABLE>
The address of all of the above-named persons is 9200
Montgomery Road, Bldg. D, Suite 13A, Cincinnati, Ohio
45242.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
- -------- --------------------------------
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained by the Registrant at
9200 Montgomery Road, Bldg. D, Suite 13A, Cincinnati, Ohio 45242
or by Star Bank, N.A., the Registrant's Custodian at 425 Walnut
Street, Cincinnati, Ohio 45202.
ITEM 31. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B
- -------- -------------------------------------------------
None.
ITEM 32. UNDERTAKINGS
- -------- ------------
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual 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 has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on the 30th day of
September, 1997.
ANALYSTS INVESTMENT TRUST
By: /s/ Donald S. Mendelsohn
Donald S. Mendelsohn,
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 dates indicated.
David L. Manzler, Sr.* Vice President, *By:/s/ Donald S. Mendelsohn
Secretary and Donald S. Mendelsohn
Trustee Attorney-in-Fact
David Lee Manzler, Jr.* President, September 30, 1997
Treasurer and
Trustee
Walter E. Bowles, III* Trustee
Robert W. Buechner* Trustee
______________________
Anthony J. Schement Trustee
______________________
David J. Orth Trustee
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER
------
1. Declaration of Trust..........................................Ex-99.B1
2. By-Laws.......................................................Ex-99.B2
3. Management Agreement..........................................Ex-99.B5
4. Underwriting Agreement........................................Ex-99.B6
5. Custody Agreement.............................................Ex-99.B8
6. Consent of Berge and Company LTD..............................Ex-99.B11
7. Letter of Initial Stockholder.................................Ex-99.B13
8. Schedule for Computation of
Each Performance Quotation....................................Ex-99.B16
9. Powers of Attorney for the Registrant and
its Officers and Trustees.....................................Ex-99.POA
ANALYSTS INVESTMENT TRUST
AGREEMENT AND DECLARATION OF TRUST
MAY 28, 1993
<PAGE>
ANALYSTS INVESTMENT TRUST
AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS.........................................1
Section 1.1 Name..........................................1
Section 1.2 Definitions...................................1
(a) The "Trust"...................................1
(b) "Trustees"....................................1
(c) "Shares"......................................1
(d) "Series"......................................1
(e) "Class".......................................1
(f) "Shareholder".................................1
(g) The "1940 Act"................................1
(h) "Commission"..................................2
(i) "Declaration of Trust"........................2
(j) "By-Laws".....................................2
ARTICLE II - PURPOSE OF TRUST............................................2
ARTICLE III - THE TRUSTEES...............................................2
Section 3.1 Number, Designation, Election, Term, etc......2
(a) Initial Trustees..............................2
(b) Number........................................2
(c) Term..........................................2
(d) Resignation and Retirement....................2
(e) Removal.......................................3
(f) Vacancies.....................................3
(g) Effect of Death, Resignation, etc.............3
(h) No Accounting.................................3
Section 3.2 Powers of Trustees............................3
(a) Investments...................................4
(b) Disposition of Assets.........................4
(c) Ownership Powers..............................4
(d) Subscription..................................4
(e) Form of Holding...............................4
(f) Reorganization, etc...........................4
(g) Voting Trusts, etc............................5
(h) Compromise....................................5
(i) Partnerships, etc.............................5
(j) Borrowing and Security........................5
(k) Guarantees, etc...............................5
(l) Insurance.....................................5
(m) Pensions, etc.................................5
Section 3.3 Certain Contracts.............................6
(a) Advisory......................................6
i
<PAGE>
(b) Administration................................6
(c) Distribution..................................6
(d) Custodian and Depository......................6
(e) Transfer and Dividend Disbursing Agency.......6
(f) Shareholder Servicing.........................7
(g) Accounting....................................7
Section 3.4 Payment of Trust Expenses and Compensation of
Trustees...................................8
Section 3.5 Ownership of Assets of the Trust..............8
ARTICLE IV - SHARES......................................................8
Section 4.1 Description of Shares.........................8
Section 4.2 Establishment and Designation of Series.......9
(a) Assets Belonging to Series...................10
(b) Liabilities Belonging to Series..............10
(c) Dividends....................................10
(d) Liquidation..................................11
(e) Voting.......................................11
(f) Redemption by Shareholder....................12
(g) Redemption by Trust..........................12
(h) Net Asset Value..............................12
(i) Transfer.....................................13
(j) Equality.....................................13
(k) Fractions....................................13
(l) Conversion Rights............................13
Section 4.3 Ownership of Shares..........................13
Section 4.4 Investments in the Trust.....................14
Section 4.5 No Preemptive Rights.........................14
Section 4.6 Status of Shares and Limitation
of Personal Liability....................14
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS....................14
Section 5.1 Voting Powers................................14
Section 5.2 Meetings.....................................15
Section 5.3 Record Dates.................................15
Section 5.4 Quorum and Required Vote.....................15
Section 5.5 Action by Written Consent....................15
Section 5.6 Inspection of Records........................16
Section 5.7 Additional Provisions........................16
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION...................16
Section 6.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice............................16
Section 6.2 Trustee's Good Faith Action; Expert Advice;
No Bond or Surety.........................16
Section 6.3 Indemnification of Shareholders..............17
Section 6.4 Indemnification of Trustees, Officers, etc...17
Section 6.5 Advances of Expenses.........................17
ii
<PAGE>
Section 6.6 Indemnification Not Exclusive, etc...........17
Section 6.7 Liability of Third Persons Dealing
with Trustees.............................18
ARTICLE VII - MISCELLANEOUS.............................................18
Section 7.1 Duration and Termination of Trust............18
Section 7.2 Reorganization...............................18
Section 7.3 Amendments...................................18
Section 7.4 Filing of Copies; References; Headings.......19
Section 7.5 Applicable Law...............................19
iii
<PAGE>
ANALYSTS INVESTMENT TRUST
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made at Cincinnati, Ohio, this 28th
day of May, 1993, by the Trustees hereunder, and by the holders of Shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH:
WHEREAS, this Trust is being formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of an Ohio business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.1 NAME. This Trust shall be known as "ANALYSTS INVESTMENT
TRUST" and the Trustees shall conduct the business of the Trust under that name
or any other name as they may from time to time determine.
SECTION 1.2 DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Ohio business trust established by
this Agreement and Declaration of Trust, as amended from time
to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust or any series of
the Trust (as the context may require) shall be divided from
time to time;
(d) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article IV;
(e) "Shareholder" means a record owner of Shares;
(f) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from
time to time;
<PAGE>
(g) "Commission" shall have the meaning given it in the 1940 Act;
(h) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time;
and
(i) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company, to
offer Shareholders one or more investment programs primarily in securities and
debt instruments and to engage in any and all lawful acts or activities for
which business trusts may be formed under Chapter 1746 of the Ohio Revised Code.
ARTICLE III
THE TRUSTEES
SECTION 3.1 NUMBER, DESIGNATION, ELECTION, TERM, ETC.
(a) INITIAL TRUSTEES. Upon his execution of this Declaration of
Trust or a counterpart hereof or some other writing in which
he accepts such Trusteeship and agrees to the provisions
hereof, David L. Manzler, Sr. and David Lee Manzler, Jr. shall
become Trustees hereof.
(b) NUMBER. The Trustees serving as such, whether named above or
hereafter becoming a Trustee, may increase or decrease the
number of Trustees to a number other than the number
theretofore determined. No decrease in the number of Trustees
shall have the effect of removing any Trustee from office
prior to the expiration of his term, but the number of
Trustees may be decreased in conjunction with the removal of a
Trustee pursuant to subsection (e) of this Section 3.1.
(c) TERM. Each Trustee shall serve as a Trustee during the
lifetime of the Trust and until its termination as hereinafter
provided or until such Trustee sooner dies, resigns, retires
or is removed. The Trustees may elect their own successors and
may, pursuant to Section 3.1(f) hereof, appoint Trustees to
fill vacancies; provided that, immediately after filling a
vacancy, at least two-thirds of the Trustees then holding
office shall have been elected to such office by the
Shareholders at an annual or special meeting. If at any time
less than a majority of the Trustees then holding office were
so elected, the Trustees shall forthwith cause to be held as
promptly as possible, and in any event within 60 days, a
meeting of Shareholders for the purpose of electing Trustees
to fill any existing vacancies.
2
<PAGE>
(d) RESIGNATION AND RETIREMENT. Any Trustee may resign his trust
or retire as a Trustee, by written instrument signed by him
and delivered to the other Trustees or to any officer of the
Trust, and such resignation or retirement shall take effect
upon such delivery or upon such later date as is specified in
such instrument.
(e) REMOVAL. Any Trustee may be removed with or without cause at
any time: (i) by written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal,
specifying the date upon which such removal shall become
effective, (ii) by vote of the Shareholders holding not less
than two-thirds of the Shares then outstanding, cast in person
or by proxy at any meeting called for the purpose, or (iii) by
a declaration in writing signed by Shareholders holding not
less than two-thirds of the Shares then outstanding and filed
with the Trust's Custodian.
(f) VACANCIES. Any vacancy or anticipated vacancy resulting from
any reason, including without limitation the death,
resignation, retirement, removal or incapacity of any of the
Trustees, or resulting from an increase in the number of
Trustees by the Trustees may (but so long as there are at
least three remaining Trustees, need not unless required by
the 1940 Act) be filled either by a majority of the remaining
Trustees through the appointment in writing of such other
person as such remaining Trustees in their discretion shall
determine (unless a shareholder election is required by the
1940 Act) or by the election by the Shareholders, at a meeting
called for the purpose, of a person to fill such vacancy, and
such appointment or election shall be effective upon the
written acceptance of the person named therein to serve as a
Trustee and agreement by such person to be bound by the
provisions of this Declaration of Trust, except that any such
appointment or election in anticipation of a vacancy to occur
by reason of retirement, resignation, or increase in number of
Trustees to be effective at a later date shall become
effective only at or after the effective date of said
retirement, resignation, or increase in number of Trustees. As
soon as any Trustee so appointed or elected shall have
accepted such appointment or election and shall have agreed in
writing to be bound by this Declaration of Trust and the
appointment or election is effective, the Trust estate shall
vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance.
(g) EFFECT OF DEATH, RESIGNATION, ETC. The death, resignation,
retirement, removal, or incapacity of the Trustees, or any one
of them, shall not operate to annul or terminate the Trust or
to revoke or terminate any existing agency or contract created
or entered into pursuant to the terms of this Declaration of
Trust.
3
<PAGE>
(h) NO ACCOUNTING. Except to the extent required by the 1940 Act
or under circumstances which would justify his removal for
cause, no person ceasing to be a Trustee as a result of his
death, resignation, retirement, removal or incapacity (nor the
estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such
cessation.
SECTION 3.2 POWERS OF TRUSTEES. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may as they consider appropriate elect and
remove officers and appoint and terminate agents and consultants and hire and
terminate employees, any one or more of the foregoing of whom may be a Trustee,
and may provide for the compensation of all of the foregoing; they may appoint
from their own number, and terminate, any one or more committees consisting of
two or more Trustees, including without implied limitation an executive
committee, which may, when the Trustees are not in session and subject to the
1940 Act, exercise some or all of the power and authority of the Trustees as the
Trustees may determine; in accordance with Section 3.3 they may employ one or
more Advisers, Administrators, Depositories and Custodians and may authorize any
Depository or Custodian to employ subcustodians or agents and to deposit all or
any part of such assets in a system or systems for the central handling of
securities and debt instruments, retain transfer, dividend, accounting or
Shareholder servicing agents or any of the foregoing, provide for the
distribution of Shares by the Trust through one or more distributors, principal
underwriters or otherwise, set record dates or times for the determination of
Shareholders or number of them with respect to various matters; they may
compensate or provide for the compensation of the Trustees, officers, advisers,
administrators, custodians, other agents, consultants and employees of the Trust
or the Trustees on such terms as they deem appropriate; and in general they may
delegate to any officer of the Trust, to any committee of the Trustees and to
any employee, adviser, administrator, distributor, principal underwriter,
depository, custodian, transfer and dividend disbursing agent, or any other
agent or consultant of the Trust such authority, powers, functions and duties as
they consider desirable or appropriate for the conduct of the business and
affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with
the 1940 Act or other applicable law, the Trustees shall have power and
authority:
(a) INVESTMENTS. To invest and reinvest cash and other property,
and to hold cash or other property uninvested without in any
4
<PAGE>
event being bound or limited by any present or future law or
custom in regard to investments by trustees;
(b) DISPOSITION OF ASSETS. To sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all
of the assets of the Trust;
(c) OWNERSHIP POWERS. To vote or give assent, or exercise any
rights of ownership, with respect to stock or other
securities, debt instruments or property; and to execute and
deliver proxies or powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities, debt instruments or property as the Trustees shall
deem proper;
(d) SUBSCRIPTION. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities or debt instruments;
(e) FORM OF HOLDING. To hold any security, debt instrument or
property in a form not indicating any trust, whether in
bearer, unregistered or other negotiable form, or in the name
of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depository or a nominee or nominees or
otherwise;
(f) REORGANIZATION, ETC. To consent to or participate in any plan
for the reorganization, consolidation or merger of any
corporation or issuer, any security or debt instrument of
which is or was held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with
respect to any security or debt instrument held in the Trust;
(g) VOTING TRUSTS, ETC. To join with other holders of any
securities or debt instruments in acting through a committee,
depository, voting trustee or otherwise, and in that
connection to deposit any security or debt instrument with, or
transfer any security or debt instrument to, any such
committee, depository or trustee, and to delegate to them such
power and authority with relation to any security or debt
instrument (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such
committee, depository or trustee as the Trustees shall deem
proper;
(h) COMPROMISE. To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including but not limited to claims for taxes;
5
<PAGE>
(i) PARTNERSHIPS, ETC. To enter into joint ventures, general or
limited partnerships and any other combinations or
associations;
(j) BORROWING AND SECURITY. To borrow funds and to mortgage and
pledge the assets of the Trust or any part thereof to secure
obligations arising in connection with such borrowing;
(k) GUARANTEES, ETC. To endorse or guarantee the payment of any
notes or other obligations of any person; to make contracts of
guaranty or suretyship, or otherwise assume liability for
payment thereof; and to mortgage and pledge the Trust property
or any part thereof to secure any of or all such obligations;
(l) INSURANCE. To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business, including,
without limitation, insurance policies insuring the assets of
the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
consultants, investment advisers, managers, administrators,
distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected
therewith), of the Trust individually against all claims and
liabilities of every nature arising by reason of holding,
being or having held any such office or position, or by reason
of any action alleged to have been taken or omitted by any
such person in any such capacity, including any action taken
or omitted that may be determined to constitute negligence;
provided, however, that insurance which protects the Trustees
and officers against liabilities rising from action involving
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their
offices may not be purchased; and
(m) PENSIONS, ETC. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry
out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit
plans, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust.
Except as otherwise provided by the 1940 Act or other applicable law,
this Declaration of Trust or the By-Laws, any action to be taken by the Trustees
may be taken by a majority of the Trustees present at a meeting of Trustees (a
quorum, consisting of at least a majority of the Trustees then in office, being
present), within or without Ohio, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by
6
<PAGE>
written consents of a majority of the Trustees then in office (or such larger or
different number as may be required by the 1940 Act or other applicable law).
SECTION 3.3 CERTAIN CONTRACTS. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their powers and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other type of organizations, or individuals
("Contracting Party") to provide for the performance and assumption of some or
all of the following services, duties and responsibilities to, for or of the
Trust and/or the Trustees, and to provide for the performance and assumption of
such other services, duties and responsibilities in addition to those set forth
below as the Trustees may determine appropriate:
(a) ADVISORY. Subject to the general supervision of the Trustees
and in conformity with the stated policy of the Trustees with
respect to the investments of the Trust or of the assets
belonging to any Series of Shares of the Trust (as that phrase
is defined in subsection (a) of Section 4.2), to manage such
investments and assets, make investment decisions with respect
thereto, and to place purchase and sale orders for portfolio
transactions relating to such investments and assets;
(b) ADMINISTRATION. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees
with respect to the operations of the Trust, to supervise all
or any part of the operations of the Trust, and to provide all
or any part of the administrative and clerical personnel,
office space and office equipment and services appropriate for
the efficient administration and operations of the Trust;
(c) DISTRIBUTION. To distribute the Shares of the Trust, to be
principal underwriter of such Shares, and/or to act as agent
of the Trust in the sale of Shares and the acceptance or
rejection of orders for the purchase of Shares;
(d) CUSTODIAN AND DEPOSITORY. To act as depository for and to
maintain custody of the property of the Trust and accounting
records in connection therewith;
(e) TRANSFER AND DIVIDEND DISBURSING AGENCY. To maintain records
of the ownership of outstanding Shares, the issuance and
redemption and the transfer thereof, and to disburse any
dividends declared by the Trustees and in accordance with the
policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
(f) SHAREHOLDER SERVICING. To provide service with respect to the
relationship of the Trust and its Shareholders, records with
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respect to Shareholders and their Shares, and similar matters;
and
(g) ACCOUNTING. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into subcontractual arrangements relative to any of the matters referred to in
Sections 3.3(a) through (g) hereof.
Subject to the provisions of the 1940 Act, the fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent of or
for any Contracting Party, or of or for any parent or affiliate of any
Contracting Party or that the Contracting Party or any parent or
affiliate thereof is a Shareholder or has an interest in the Trust, or
that
(ii) any Contracting Party may have a contract providing for
the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited partnerships
or other organizations, or has other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust and/or the
Trustees or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders, provided that in the case of any relationship or
interest referred to in the preceding clause (i) on the part of any Trustee or
officer of the Trust either (l) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good faith
reasonably justified by such facts by a majority of such Trustees not having any
such relationship or interest (even though such unrelated or disinterested
Trustees are less than a quorum of all of the Trustees), (2) the material facts
as to such relationship or interest and as to the contract have been disclosed
to or are known by the Shareholders not having such relationship or interest and
who are entitled to vote thereon and the contract involved is specifically
approved in good faith by majority vote of such Shareholders, or (3) the
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specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
SECTION 3.4 PAYMENT OF TRUST EXPENSES AND COMPENSATION OF TRUSTEES. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust, or partly out of principal and partly out of income, and to
charge or allocate the same to, between or among such one or more of the Series
and Sub-Series that may be established and designated pursuant to Article IV, as
the Trustees deem fair, all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, investment adviser, administrator, distributor, principal
underwriter, auditor, counsel, depository, custodian, transfer agent, dividend
disbursing agent, accounting agent, Shareholder servicing agent, and such other
agents, consultants, and independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur. Without limiting
the generality of any other provision hereof, the Trustees shall be entitled to
reasonable compensation from the Trust for their services as Trustees and may
fix the amount of such compensation.
SECTION 3.5 OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the
assets of the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV
SHARES
SECTION 4.1 DESCRIPTION OF SHARES. The beneficial interest in the Trust
shall be divided into Shares, all without par value. The Trustees shall have the
authority from time to time to issue or reissue Shares in one or more Series of
Shares (including without limitation the Series specifically established and
designated in Section 4.2), as they deem necessary or desirable, to establish
and designate such Series, and to fix and determine the relative rights and
preferences as between the different Series of Shares as to right of redemption
and the price, terms and manner of redemption, special and relative rights as to
dividends and other distributions and on liquidation, sinking or purchase fund
provisions, conversion rights, and conditions under which the several Series
shall have separate voting rights or no voting rights. Except as aforesaid all
Shares of the different Series shall be identical.
The Shares of each Series may be issued or reissued from time to time
in one or more sub-series ("Sub-Series"), as determined by the Board of Trustees
pursuant to resolution. Each Sub-Series shall be appropriately designated, prior
to the issuance of any shares thereof, by some distinguishing letter, number or
title. All Shares within a Sub-Series shall be alike in every particular. All
Shares of each Series shall be of equal rank and have the same powers,
preferences and rights, and shall be subject to the same qualifications,
limitations and restrictions without distinction between the shares of different
Sub-
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Serieses thereof, except with respect to such differences among such
Sub-Serieses, as the Board of Trustees shall from time to time determine to be
necessary or desirable, including differences in the rate or rates of dividends
or distributions. The Board of Trustees may from time to time increase the
number of Shares allocated to any Sub-Series already created by providing that
any unissued Shares of the applicable Series shall constitute part of such
Sub-Series, or may decrease the number of Shares allocated to any Sub-Series
already created by providing that any unissued Shares previously assigned to
such Sub-Series shall no longer constitute part thereof. The Board of Trustees
is hereby empowered to classify or reclassify from time to time any unissued
Shares of each Series by fixing or altering the terms thereof and by assigning
such unissued shares to an existing or newly created Sub-Series. Notwithstanding
anything to the contrary in this paragraph the Board of Trustees is hereby
empowered (i) to redesignate any issued Shares of any Series by assigning a
distinguishing letter, number or title to such shares and (ii) to reclassify all
or any part of the issued Shares of any Series to make them part of an existing
or newly created Sub-Series.
The number of authorized Shares and the number of Shares of each Series
that may be issued is unlimited, and the Trustees may issue Shares of any Series
or Sub-Series for such consideration and on such terms as they may determine (or
for no consideration if pursuant to a Share dividend or split-up), all without
action or approval of the Shareholders. All Shares when so issued on the terms
determined by the Trustees shall be fully paid and non-assessable (but may be
subject to mandatory contribution back to the Trust as provided in subsection
(h) of Section 4.2). The Trustees may classify or reclassify any unissued Shares
or any Shares previously issued and reacquired of any Series into one or more
Series that may be established and designated from time to time. The Trustees
may hold as treasury Shares (of the same or some other Series), reissue for such
consideration and on such terms as they may determine, or cancel, at their
discretion from time to time, any Shares of any Series reacquired by the Trust.
The Trustees may from time to time close the transfer books or
establish record dates and times for the purposes of determining the holders of
Shares entitled to be treated as such, to the extent provided or referred to in
Section 5.3.
The establishment and designation of any Series of Shares in addition
to those established and designated in Section 4.2, or of any Sub-Series of
Shares, shall be effective upon the execution by a majority of the then Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences of such Series or Sub-Series, or as otherwise
provided in such instrument. At any time that there are no Shares outstanding of
any particular Series or Sub-Series previously established and designated the
Trustees may by an instrument executed by a majority of their number abolish
that Series or Sub-Series and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration of Trust.
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Any Trustee, officer or other agent of the Trust, and any organization
in which any such person is interested may acquire, own, hold and dispose of
Shares to the same extent as if such person were not a Trustee, officer or other
agent of the Trust; and the Trust may issue and sell or cause to be issued and
sold and may purchase Shares from any such person or any such organization
subject only to the general limitations, restrictions or other provisions
applicable to the sale or purchase of Shares generally.
SECTION 4.2 ESTABLISHMENT AND DESIGNATION OF SERIES. Without limiting
the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Series, the Trustees hereby establish and designate two
Series of Shares: the "Analysts Stock Fund" and the "Analysts Fixed Income
Fund". The Shares of these Series and any Shares of any further Series that may
from time to time be established and designated by the Trustees shall (unless
the Trustees otherwise determine with respect to some further Series or
Sub-Series at the time of establishing and designating the same) have the
following relative rights and preferences:
(a) ASSETS BELONGING TO SERIES. All consideration received by the
Trust for the issuance or sale of Shares of a particular
Series together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to
that Series for all purposes, subject only to the rights of
creditors, and shall be so recorded upon the books of account
of the Trust. Such consideration, assets, income, earnings,
profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any
General Items allocated to that Series as provided in the
following sentence, are herein referred to as "assets
belonging to" that Series. In the event that there are any
assets, income, earnings, profits, and proceeds thereof,
funds, or payments which are not readily identifiable as
belonging to any particular Series (collectively "General
Items"), the Trustees shall allocate such General Items to and
among any one or more of the Series established and designated
from time to time in such manner and on such basis as they, in
their sole discretion, deem fair and equitable; and any
General Items so allocated to a particular Series shall belong
to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for
all purposes.
The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall
be treated as income and which items as capital; and each such
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determination and allocation shall be conclusive and binding
upon the Shareholders.
(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular Series and Sub- Series thereof shall be charged
with the liabilities of the Trust in respect of that Series or
Sub-Series and all expenses, costs, charges and reserves
attributable to that Series or Sub- Series, and any general
liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any
particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series and
Sub-Serieses established and designated from time to time in
such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. The liabilities, expenses,
costs, charges and reserves allocated and so charged to a
Series or Sub-Series are herein referred to as "liabilities
belonging to" that Series or Sub-Series. Each allocation of
liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes.
(c) DIVIDENDS. Dividends and distributions on Shares of a
particular Series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise
pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine, to
the holders of Shares of that Series, from such of the
estimated income and capital gains, accrued or realized, from
the assets belonging to that Series, as the Trustees may
determine, after providing for actual and accrued liabilities
belonging to that Series. All dividends and distributions on
Shares of a particular Series shall be distributed pro rata to
the holders of that Series in proportion to the number of
Shares of that Series held by such holders at the date and
time of record established for the payment of such dividends
or distributions, except that in connection with any dividend
or distribution program or procedure the Trustees may
determine that no dividend or distribution shall be payable on
Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times
established by the Trustees under such program or procedure,
and except that if Sub-Serieses have been established for any
Series, the rate of dividends or distributions may vary among
such Sub-Series pursuant to resolution, which may be a
standing resolution, of the Board of Trustees. Such dividends
and distributions may be made in cash or Shares or a
combination thereof as determined by the Trustees or pursuant
to any program that the Trustees may have in effect at the
time for the election by each Shareholder of the mode of the
making of such dividend or distribution to that Shareholder.
Any such dividend or distribution paid in Shares will be paid
at the net asset value thereof as determined in accordance
with subsection (h) of Section 4.2.
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The Trust intends to qualify each Series as a "regulated
investment company" under the Internal Revenue Code of 1954,
as amended, or any successor or comparable statute thereto,
and regulations promulgated thereunder. Inasmuch as the
computation of net income and gains for federal income tax
purposes may vary from the computation thereof on the books of
the Trust, the Board of Trustees shall have the power, in its
sole discretion, to distribute in any fiscal year as
dividends, including dividends designated in whole or in part
as capital gains distributions, amounts sufficient, in the
opinion of the Board of Trustees, to enable each Series to
qualify as a regulated investment company and to avoid
liability of the Series for federal income tax in respect of
that year. However, nothing in the foregoing shall limit the
authority of the Board of Trustees to make distributions
greater than or less than the amount necessary to qualify as a
regulated investment company and to avoid liability of each
Series for such tax.
(d) LIQUIDATION. In event of the liquidation or dissolution of the
Trust, the Shareholders of each Series or Sub-Series that has
been established and designated shall be entitled to receive,
as a Series or Sub-Series, when and as declared by the
Trustees, the excess of the assets belonging to that Series or
Sub-Series over the liabilities belonging to that Series or
Sub- Series. The assets so distributable to the Shareholders
of any particular Series or Sub-Series shall be distributed
among such Shareholders in proportion to the number of Shares
of that Series or Sub-Series held by them and recorded on the
books of the Trust. The liquidation of any particular Series
or Sub-Series may be authorized by vote of a majority of the
Trustees then in office subject to the approval of a majority
of the outstanding voting Shares of that Series or Sub-Series,
as defined in the 1940 Act.
(e) VOTING. All Shares shall have "equal voting rights" as such
term is defined in the Investment Company Act of 1940 and
except as otherwise provided by that Act or rules, regulations
or orders promulgated thereunder. On each matter submitted to
a vote of the Shareholders, each Series shall vote as a
separate series except as to any matter with respect to which
a vote of all Series voting as a separate series is required
by the 1940 Act or rules and regulations promulgated
thereunder, or would be required under the Ohio General
Corporation Law if the Trust were an Ohio corporation. As to
any matter which does not affect the interest of a particular
Series or Sub-Series, only the holders of Shares of the one or
more affected Series or Sub-Serieses shall be entitled to
vote.
(f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a
particular Series shall have the right at such times as may be
permitted by the Trust, but no less frequently than once each
week, to require the Trust to redeem all or any part of his
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Shares of that Series at a redemption price equal to the net
asset value per Share of that Series next determined in
accordance with subsection (h) of this Section 4.2 after the
Shares are properly tendered for redemption. Payment of the
redemption price shall be in cash; provided, however, that if
the Trustees determine, which determination shall be
conclusive, that conditions exist which make payment wholly in
cash unwise or undesirable, the Trust may make payment wholly
or partly in securities or other assets belonging to the
Series of which the Shares being redeemed are part at the
value of such securities or assets used in such determination
of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment
of the redemption price and may suspend the right of the
holders of Shares of any Series to require the Trust to redeem
Shares of that Series during any period or at any time when
and to the extent permissible under the 1940 Act, and such
redemption is conditioned upon the Trust having funds or
property legally available therefor.
(g) REDEMPTION BY TRUST. Each Share of each Series that has been
established and designated is subject to redemption by the
Trust at the redemption price which would be applicable if
such Share was then being redeemed by the Shareholder pursuant
to subsection (f) of this Section 4.2:(a) at any time, if the
Trustees determine in their sole discretion that failure to so
redeem may have materially adverse consequences to all or any
of the holders of the Shares, or any Series thereof, of the
Trust, or (b) upon such other conditions as may from time to
time be determined by the Trustees and set forth in the then
current Prospectus of the Trust with respect to maintenance of
Shareholder accounts of a minimum amount. Upon such redemption
the holders of the Shares so redeemed shall have no further
right with respect thereto other than to receive payment of
such redemption price.
(h) NET ASSET VALUE. The net asset value per Share of any Series
or Sub-Series shall be the quotient obtained by dividing the
value of the net assets of that Series or Sub-Series (being
the value of the assets belonging to that Series or Sub-Series
less the liabilities belonging to that Series or Sub-Series)
by the total number of Shares of that Series or Sub-Series
outstanding, all determined in accordance with the methods and
procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time.
The Trustees may determine to maintain the net asset value per
Share of any Series at a designated constant dollar amount and
in connection therewith may adopt procedures not inconsistent
with the 1940 Act for the continuing declarations of income
attributable to that Series as dividends payable in additional
Shares of that Series at the designated constant dollar amount
and for the handling of any losses attributable to that
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Series. Such procedures may provide that in the event of any
loss each Shareholder shall be deemed to have contributed to
the capital of the Trust attributable to that Series or
Sub-Series his pro rata portion of the total number of Shares
required to be canceled in order to permit the net asset value
per Share of that Series to be maintained, after reflecting
such loss, at the designated constant dollar amount. Each
Shareholder of the Trust shall be deemed to have agreed, by
his investment in any Series with respect to which the
Trustees shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the
event of any such loss.
(i) TRANSFER. All Shares of each particular Series shall be
transferable, but transfers of Shares of a particular Series
will be recorded on the Share transfer records of the Trust
applicable to that Series only at such times as Shareholders
shall have the right to require the Trust to redeem Shares of
that Series and at such other times as may be permitted by the
Trustees.
(j) EQUALITY. All Shares of each particular Series shall represent
an equal proportionate interest in the assets belonging to
that Series (subject to the liabilities belonging to that
Series), and each Share of any particular Series shall be
equal to each other Share of that Series; but the provisions
of this sentence shall not restrict any distinctions
permissible under this Section 4.2 that may exist with respect
to a Sub-Series of the same Series. The Trustees may from time
to time divide or combine the Shares of any particular Series
into a greater or lesser number of Shares of that Series
without thereby changing the proportionate beneficial interest
in the assets belonging to that Series or in any way affecting
the rights of Shares of any other Series.
(k) FRACTIONS. Any fractional Share of any Series or Sub-Series,
if any such fractional Share is outstanding, shall carry
proportionately all the rights and obligations of a whole
Share of that Series or Sub-Series, including with respect to
voting, receipt of dividends and distributions, redemption of
Shares, and liquidation of the Trust.
(l) CONVERSION RIGHTS. Subject to compliance with the requirements
of the 1940 Act, the Trustees shall have the authority to
provide that holders of Shares of any Series or Sub-Series
shall have the right to convert said Shares into Shares of one
or more other Series of Shares in accordance with such
requirements and procedures as may be established by the
Trustees.
SECTION 4.3 OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Series
that has been established and designated. No
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certificates certifying the ownership of Shares need be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the issuance of Share certificates, the
use of facsimile signatures, the transfer of Shares and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent,
as the case may be, shall be conclusive as to who are the Shareholders and as to
the number of Shares of each Series and Sub-Series held from time to time by
each such Shareholder.
SECTION 4.4 INVESTMENTS IN THE TRUST. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as they
from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.
SECTION 4.5 NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive
or other right to subscribe to any additional Shares or other securities issued
by the Trust.
SECTION 4.6 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the Trust nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 5.1 VOTING POWERS. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust or any Series to
the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as
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the stockholders of an Ohio business corporation as to whether or not a court
action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
and (vi) with respect to such additional matters relating to the Trust as may be
required by the 1940 Act, this Declaration of Trust, the By-Laws or any
registration of the Trust with the Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or desirable. There shall be no
cumulative voting in the election of any Trustee or Trustees. Shares may be
voted in person or by proxy. A proxy with respect to Shares held in the name of
two or more persons shall be valid if executed by any one of them unless at or
prior to exercise of the proxy the Trust receives a specific written notice to
the contrary from any one of them. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required by law, this Declaration of Trust or the
By-Laws to be taken by Shareholders.
SECTION 5.2 MEETINGS. Meetings (including meetings involving only the
holders of Shares of one or more but less than all Series or Sub-Serieses) of
Shareholders may be called by the Trustees from time to time for the purpose of
taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Written notice of any meeting of Shareholders
shall be given or caused to be given by the Trustees by mailing such notice at
least seven days before such meeting, postage prepaid, stating the time, place
and purpose of the meeting, to each Shareholder at the Shareholder's address as
it appears on the records of the Trust. If the Trustees shall fail to call or
give notice of any meeting of Shareholders (including a meeting involving only
the holders of Shares of one or more but less than all Series or Sub-Serieses)
for a period of 30 days after written application by Shareholders holding at
least 25% of the Shares then outstanding requesting a meeting be called for any
other purpose requiring action by the Shareholders as provided herein or in the
By-Laws, then Shareholders holding at least 25% of the Shares then outstanding
may call and give notice of such meeting, and thereupon the meeting shall be
held in the manner provided for herein in case of call thereof by the Trustees.
SECTION 5.3 RECORD DATES. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and
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any Shareholder who was a Shareholder at the date and time so fixed shall be
entitled to vote at such meeting or any adjournment thereof or (subject to any
provisions permissible under subsection (c) of Section 4.2 with respect to
dividends or distributions on Shares that have not been ordered and/or paid for
by the time or times established by the Trustees under the applicable dividend
or distribution program or procedure then in effect) to be treated as a
Shareholder of record for purposes of such other action, even though he has
since that date and time disposed of his Shares, and no Shareholder becoming
such after that date and time shall be so entitled to vote at such meeting or
any adjournment thereof or to be treated as a Shareholder of record for purposes
of such other action.
SECTION 5.4 QUORUM AND REQUIRED VOTE. A majority of the Shares of each
Series, or of all Series if voting as a single series is required, which are
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, but any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a reasonable
time after the date set for the original meeting without the necessity of
further notice. A majority of the Shares voted, at a meeting of which a quorum
is present, shall decide any questions and a plurality shall elect a Trustee,
except when a different vote is required or permitted by any provision of the
1940 Act or other applicable law or by this Declaration of Trust or the By-Laws.
SECTION 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such other proportion thereof as shall be required by the 1940 Act or by any
express provision of this Declaration of Trust or the By-Laws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
SECTION 5.6 INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of an Ohio corporation under the Ohio General Corporation Law.
SECTION 5.7 ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE.
All persons extending credit to, contracting with or having any claim against
the Trust shall look only to the assets of that Series for payment under such
credit, contract or claim; and neither the Shareholders nor the Trustees, nor
any of the Trust's officers, employees or agents, whether past, present or
future, shall be
18
<PAGE>
personally liable therefor. Every note, bond, contract, instrument, certificate
or undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only by or for the
Trust or the Trustees and not personally. Nothing in this Declaration of Trust
shall protect any Trustee or officer against any liability to the Trust or the
Shareholders to which such Trustee or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee or of such
officer.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the State of Ohio and
shall recite to the effect that the same was executed or made by or on behalf of
the Trust or by them as Trustees or Trustee or as officers or officer and not
individually and that the obligations of such instrument are not binding upon
any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
SECTION 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall be liable for his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
custodian or transfer, dividend disbursing, Shareholder servicing or accounting
agent of the Trust, nor shall any Trustee be responsible for the act or omission
of any other Trustee; (b) the Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as Trustees, and shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice;
and (c) in discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of a Contracting
Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such
shall not be required to give any bond or surety or any other security for the
performance of their duties. Nothing stated herein is intended to detract from
the protection accorded to Trustees by Ohio Revised Code Sections 1746.08 and
1701.59, as amended from time to time.
19
<PAGE>
SECTION 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason of being or having been a
Shareholder and not because of such Shareholder's acts or omissions or for some
other reason, the Trust (upon proper and timely request by the Shareholder)
shall assume the defense against such charge and satisfy any judgment thereon,
and the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the Trust estate to be held harmless from and indemnified against
all loss and expense arising from such liability;
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, 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 any Covered Person 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, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
20
<PAGE>
SECTION 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by a majority of the Trustees then in office
subject to a favorable vote of a majority of the outstanding voting Shares, as
defined in the 1940 Act, of each Series voting separately by Series.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
SECTION 7.2 REORGANIZATION. The Trustees may sell, convey and transfer
the assets of the Trust, or the assets belonging to any one or more Series, to
another trust, partnership, association or corporation organized under the laws
of any state of the United States, or to the Trust to be held as assets
belonging to another Series of the Trust, in exchange for cash, shares or other
securities (including, in the case of a transfer to another Series of the Trust,
Shares of such other Series) with such transfer being made subject to, or with
the assumption by the transferee of, the liabilities belonging to each Series
the assets of which are so transferred; provided, however, that if shareholder
approval is required by the 1940 Act, no assets belonging to any particular
Series shall be so transferred unless the terms of such transfer shall have
first been approved at a meeting called for the purpose by the affirmative vote
of the holders of a majority of the outstanding voting Shares, as defined in the
1940 Act, of that Series. Following such transfer, the Trustees shall distribute
such cash, shares or other securities (giving due effect to the assets and
liabilities belonging to and any other differences among the various Series the
assets belonging to which have so been transferred) among the Shareholders of
the Series the assets belonging to which have been so transferred; and if all of
the assets of the Trust have been so transferred, the Trust shall be terminated.
SECTION 7.3 AMENDMENTS. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each
21
<PAGE>
Shareholder or Trustee involved. Subject to the foregoing, the provisions of
this Declaration of Trust (whether or not related to the rights of Shareholders)
may be amended at any time by an instrument in writing signed by a majority of
the then Trustees (or by an officer of the Trust pursuant to the vote of a
majority of such Trustees), when authorized so to do by the vote in accordance
with subsection (e) of Section 4.2 of Shareholders holding a majority of the
Shares entitled to vote, except that amendments either (a) establishing and
designating any new Series of Shares not established and designated in Section
4.2, or any Sub-Series or (b) having the purpose of changing the name of the
Trust or the name of any Shares theretofore established and designated or of
supplying any omission, curing any ambiguity or curing, correcting or
supplementing any provision hereof which is internally inconsistent with any
other provision hereof or which is defective or inconsistent with the 1940 Act
or with the requirements of the Internal Revenue Code and applicable regulations
for the Trust's obtaining the most favorable treatment thereunder available to
regulated investment companies, shall not require authorization by Shareholder
vote. Subject to the foregoing, any such amendment shall be effective as
provided in the instrument containing the terms of such amendment or, if there
is no provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer of the Trust to the effect that such amendment
has been duly adopted.
SECTION 7.4 FILING OF COPIES; REFERENCES; HEADINGS. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of the State of Ohio, as well as any other governmental office where
such filing may from time to time be required, but the failure to make any such
filing shall not impair the effectiveness of this instrument or any such
amendment. Anyone dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such amendments have been made, as to the
identities of the Trustees and officers, and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were the original,
may rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this instrument as a whole
as the same may be amended or affected by any such amendments. The masculine
gender shall include the feminine and neuter genders. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.
SECTION 7.5 APPLICABLE LAW. This Declaration of Trust is made in the
State of Ohio, and it is created under and is to be governed by and construed
and administered according to the laws of said State, including the Ohio General
Corporation Law as the same may be amended from time to time, but the reference
to said Corporation Law is not
22
<PAGE>
intended to give the Trust, the Trustees, the Shareholders or any other person
any right, power, authority or responsibility available only to or in connection
with an entity organized in corporate form. The Trust shall be of the type
referred to in Section 1746.01 of the Ohio Revised Code, and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand in
Southlake, Texas for himself and his assigns, as of the day and year first above
written.
/S/ _________________________
DAVID L. MANZLER, SR.
/S/ _________________________
DAVID L. MANZLER, JR.
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public in and for said county and state, personally
appeared the above named DAVID L. MANZLER, SR., and DAVID L. MANZLER, JR., who
acknowledged that they did sign the foregoing instrument and that the same is
their free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 28th day of May, 1993.
/S/ _________________________
Janice Rhodenbaugh
Notary Public
My Commission Expires: DECEMBER 17, 1996
23
<PAGE>
ACCEPTANCE OF TRUST
-------------------
As contemplated in Section 3.1 of the Agreement and Declaration of
Trust of ANALYSTS INVESTMENT TRUST, the undersigned accepts his designation as a
Trustee of said Trust and agrees to the provisions of said Agreement and
Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has set his hand on the date set
opposite his signature.
MAY 28, 1993 /S/_________________________
- ----------- DAVID L. MANZLER, SR.
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public in and for said county and state, personally
appeared the above named DAVID L. MANZLER, SR., who acknowledged that he did
sign the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 28TH day of MAY , 1993.
/S/ _________________________
Janice Rhodenbaugh
Notary Public
My Commission Expires: DECEMBER 17 , 1996
24
<PAGE>
ACCEPTANCE OF TRUST
As contemplated in Section 3.1 of the Agreement and Declaration of
Trust of ANALYSTS INVESTMENT TRUST, the undersigned accepts his designation as a
Trustee of said Trust and agrees to the provisions of said Agreement and
Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has set his hand on the date set
opposite his signature.
MAY 28, 1993 /S/ _________________________
- ----------- DAVID LEE MANZLER, JR.
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public in and for said county and state, personally
appeared the above named DAVID LEE MANZLER, JR., who acknowledged that he did
sign the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 28TH day of MAY , 1993.
/S/ _________________________
Janice Rhodenbaugh
Notary Public
My Commission Expires: DECEMBER 17 , 1996
25
BY-LAWS
OF
THE ANALYSTS TRUST
ARTICLE 1
AGREEMENT AND DECLARATION OF TRUST AND OFFICES
----------------------------------------------
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of The Analysts Trust, the Ohio business trust
established by the Declaration of Trust (the "Trust").
1.2 OFFICES. The Trust may maintain one or more other offices,
including its principal office, in or outside of Ohio, in such cities as the
Trustees may determine from time to time. Unless the Trustees otherwise
determine, the principal office of the Trust shall be located in Dayton, Ohio.
ARTICLE 2
MEETINGS OF TRUSTEES
--------------------
2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as any meeting of the shareholders.
2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the President or the Treasurer or by two or more Trustees, sufficient notice
thereof being given to each Trustee by the Secretary or an Assistant Secretary
or by the officer or the Trustees calling the meeting.
2.3 NOTICE. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
2.4 QUORUM. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5 PARTICIPATION BY TELEPHONE. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting except as
otherwise provided by the Investment Company Act of 1940.
2.6 ACTION BY CONSENT. Any action required or permitted to be taken at
any meeting of the Trustees or any committee thereof may be taken without a
meeting, if a written consent of such action is signed by a majority of the
Trustees then in office or a majority of the members of such committee, as the
case may be, and such written consent is filed with the minutes of the
proceedings of the Trustees or such committee.
<PAGE>
ARTICLE 3
OFFICERS
--------
3.1 ENUMERATION AND QUALIFICATION. The officers of the Trust shall be a
President, a Treasurer, a Secretary and such other officers, including Vice
Presidents, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
3.2 ELECTION. The President, the Treasurer and the Secretary shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time. Vacancies in any office may be filled at
any time.
3.3 TENURE. The President, the Treasurer and the Secretary shall hold
office for one year and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent shall
retain authority at the pleasure of the Trustees.
3.4 POWERS. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as an Ohio
business corporation and such other duties and powers as the Trustees may from
time to time designate.
3.5 PRESIDENT. Unless the Trustees otherwise provide, the President, or
in the absence of the President, any Trustee chosen by the Trustees, shall
preside at all meetings of the shareholders and of the Trustees. The President
shall be the chief executive officer.
3.6 TREASURER. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
3.7 SECRETARY. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.8 RESIGNATIONS AND REMOVALS. Any Trustee or officer may resign at any
time by written instrument signed by him or her and delivered to the President
or the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time. The
Trustees may remove any officer elected by them with or without cause. Except to
the extent expressly provided in a written agreement with the Trust, no Trustee
or officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
2
<PAGE>
ARTICLE 4
COMMITTEES
----------
4.1 GENERAL. The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number an Executive Committee or other
committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration of Trust, or by these By-Laws may not be
delegated. Except as the Trustees may otherwise determine, any such committee
may make rules for the conduct of its business, but unless otherwise provided by
the Trustees or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws for the Trustees
themselves. All members of such committees shall hold such offices at the
pleasure of the Trustees. The Trustees may abolish any such committee at any
time. Any committee to which the Trustees delegate any of their powers or duties
shall keep records of its meetings and shall report its action to the Trustees.
The Trustees shall have power to rescind any action of any committee, but no
such rescission shall have retroactive effect.
ARTICLE 5
REPORTS
-------
5.1 GENERAL. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
ARTICLE 6
FISCAL YEAR
-----------
6.1 GENERAL. The fiscal year of the Trust shall be fixed by, and shall
be subject to change by, the Trustees.
ARTICLE 7
SEAL
----
7.1 GENERAL. If required by applicable law, the seal of the Trust shall
consist of a flat-faced die with the word "Ohio", together with the name of the
Trust and the year of its organization cut or engraved thereon, but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE 8
EXECUTION OF PAPERS
-------------------
8.1 GENERAL. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust, but shall state the substance of or make reference to the
provisions of Section 6.1 of the Declaration of Trust.
3
<PAGE>
ARTICLE 9
ISSUANCE OF SHARE CERTIFICATES
------------------------------
9.1 SHARE CERTIFICATES. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a certificate
stating the number of shares owned by him, in such form as shall be prescribed
from time to time by the Trustees. Such certificate shall be signed by the
President or a Vice-President and by the Treasurer or Assistant Treasurer. Such
signatures may be facsimiles if the certificate is signed by a transfer agent,
or by a registrar, other than a Trustee, officer or employee of the Trust. In
case any officer who has signed or whose facsimile signature has been placed on
such certificate shall cease to be such officer before such certificate is
issued, it may be issued by the Trust with the same effect as if he were such
officer at the time of its issue.
9.2 LOSS OF CERTIFICATES. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. In the event certificates
have been issued, a pledgee of shares transferred as collateral security shall
be entitled to a new certificate if the instrument of transfer substantially
describes the debt or duty that is intended to be secured thereby. Such new
certificate shall express on its face that it is held as collateral security,
and the name of the pledgor shall be stated thereon, who alone shall be liable
as a shareholder, and entitled to vote thereon.
9.4 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
CUSTODIAN
---------
10.1 GENERAL. The Trust shall at all times employ a bank or trust
company having a capital, surplus and undivided profits of at least Five Hundred
Thousand ($500,000) Dollars as Custodian of the capital assets of the Trust. The
Custodian shall be compensated for its services by the Trust and upon such basis
as shall be agreed upon from time to time between the Trust and the Custodian.
ARTICLE 11
DEALINGS WITH TRUSTEES AND OFFICERS
-----------------------------------
11.1 GENERAL. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of shares of the Trust to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may accept subscriptions to
shares or repurchase shares from any firm or company in which he is interested.
4
<PAGE>
ARTICLE 12
SHAREHOLDERS
------------
12.1 MEETINGS. A meeting of the shareholders of the Trust shall be held
whenever called by the Trustees, whenever election of a Trustee or Trustees by
shareholders is required by the provisions of Section 16(a) of the Investment
Company Act of 1940 for that purpose or whenever otherwise required pursuant to
the Declaration of Trust. Any meeting shall be held on such day and at such time
as the President or the Trustees may fix in the notice of the meeting.
12.2 RECORD DATES. For the purpose of determining the shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 60
days before the date of any meeting of shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only shareholders of record on such record date shall have such
right, notwithstanding any transfer of shares on the books of the Trust after
the record date; or without fixing such record date the Trustees may for any
such purposes close the register or transfer books for all or any part of such
period.
ARTICLE 13
AMENDMENTS TO THE BY-LAWS
-------------------------
13.1 GENERAL. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
5
MANAGEMENT AGREEMENT
TO: EQUITY ANALYSTS INC.
9200 Montgomery Road
Bldg. D, Suite 13A
Cincinnati, Ohio 45242
Dear Sirs:
Analysts Investment Trust (hereinafter referred to as the "Trust")
herewith confirms our agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers two series of shares to investors: Analysts
Stock Fund and Analysts Fixed Income Fund. The Trust's Board of Trustees (the
"Board") is authorized from time to time, as it deems necessary or desirable, to
establish and designate additional series of shares.
You have been selected to act as the sole investment adviser of the
Trust and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows upon the date of execution of this Agreement.
1. ADVISORY SERVICES
-----------------
You will regularly provide the Trust with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for each of the Trust's series consistent with the respective
series' investment objectives and policies. You will determine the securities to
be purchased for each series of the Trust, the portfolio securities to be held
or sold by each series of the Trust and the portion of each series' assets to be
held uninvested, subject always to the series' investment objectives, policies
and restrictions, as each of the same shall be from time to time in effect, and
subject further to such policies and instructions as the Board may from time to
time establish. You will advise and assist the officers of the Trust in taking
such steps as are necessary or appropriate to carry out the decisions of the
Board and the appropriate committees of the Board regarding the conduct of the
business of the Trust.
2. ALLOCATION OF CHARGES AND EXPENSES
----------------------------------
You will pay all operating expenses of the Trust, including
the compensation and expenses of any trustees, officers and employees of the
Trust and of any other persons rendering any services to the Trust; clerical and
shareholder service staff salaries; office space and other office expenses; fees
and expenses incurred by the Trust in connection with membership in investment
company organizations; legal, auditing and accounting expenses;
non-organizational expenses of registering shares under federal and state
securities laws; insurance expenses; fees and expenses of the custodian,
transfer agent, dividend disbursing agent, shareholder service agent, plan
agent, administrator, accounting and pricing services agent and underwriter of
the Trust; expenses, including clerical expenses, of issue, sale, redemption or
repurchase of shares of the Trust; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to the
Trust's current and prospective shareholders; the cost of printing or preparing
stock
<PAGE>
certificates or any other documents, statements or reports to shareholders;
expenses of shareholders' meetings and proxy solicitations; advertising,
promotion and other expenses incurred directly or indirectly in connection with
the sale or distribution of the Trust's shares; and all other operating expenses
not specifically assumed by the Trust.
The Trust will pay all brokerage fees and commissions, taxes, interest,
expenses incurred by the Trust in connection with the organization and initial
registration of shares of any series of the Trust, and such extraordinary or
non-recurring expenses as may arise, including litigation to which the Trust may
be a party and indemnification of the Trust's trustees and officers with respect
thereto. You may obtain reimbursement from the Trust, at such time or times as
you may determine in your sole discretion, for any of the expenses advanced by
you, which the Trust is obligated to pay, and such reimbursement shall not be
considered to be part of your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
---------------------------
For all of the services to be rendered and payments to be made
as provided in this Agreement, Analysts Stock Fund will pay you a fee equal to
an annual average rate of 2% of its average daily net assets up to and including
$20 million, 1.75% of such assets from $20 million to and including $40 million,
1.5% of such assets from $40 million to and including $100 million and .75% of
such assets in excess of $100 million. Analysts Fixed Income Fund will pay you a
fee equal to an annual average rate of 1.5% of its average daily net assets up
to and including $20 million, 1.25% of such assets from $20 million to and
including $40 million, 1% of such assets from $40 million to and including $100
million and .75% of such assets in excess of $100 million.
Your compensation with respect to each additional series of
the Trust established after the date of this Agreement shall be one of the fees
described above unless the Board of Trustees, including a majority of the
Trustees who are not interested persons as defined in the Investment Company Act
of 1940 of you or the Trust, determines otherwise. If the Board of Trustees
adopts a different fee arrangement for an additional series, the fee arrangement
shall be approved pursuant to the provisions of Section 15 of the Investment
Company Act of 1940.
The average value of the daily net assets of a series shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of a series is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the series as last determined shall be deemed to be the
value of the net assets as of the close of the business day, or as of such other
time as the value of the series' net assets may lawfully be determined, on that
day. If the determination of the net asset value of a series has been suspended
for a period including such month, your compensation payable at the end of such
month shall be computed on the basis of the value of the net assets of the
series as last determined (whether during or prior to such month.)
4. EXECUTION OF PURCHASE AND SALE ORDERS
-------------------------------------
In connection with purchases or sales of portfolio securities
for the account of each series of the Trust, it is understood that you will
arrange for the placing of all orders for the purchase and sale of portfolio
securities for the account with brokers or dealers selected by you, subject to
review of this selection by the Board from time to time. You will be responsible
for the negotiation and the allocation of principal business and portfolio
brokerage. In the selection of such brokers or dealers and the placing of such
orders, you are directed at all times to seek for the series the best
qualitative execution, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), the
2
<PAGE>
execution capability, financial responsibility and responsiveness of the broker
or dealer and the brokerage and research services provided by the broker or
dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services ( as those terms are defined in Section
28(e) of the Securities and Exchange Act of 1934) to the Trust and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a Trust portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if you determine in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer. The determination may be
viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Trust and to accounts over which you
exercise investment discretion. The Trust and you understand and acknowledge
that, although the information may be useful to the Trust and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Trust to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Trust.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Trust as a factor in the selection of brokers and dealers to execute Trust
portfolio transactions.
Subject to the provisions of the Investment Company Act of
1940, as amended, and other applicable law, you or any of your affiliates may
retain compensation in connection with effecting the Trust's portfolio
transactions, including transactions effected through others. If any occasion
should arise in which you give any advice to clients of yours concerning the
shares of the Trust, you will act solely as investment counsel for such client
and not in any way on behalf of the Trust. Your services to the Trust pursuant
to this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
----------------------------------
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your shareholders,
officers, directors, employees, agents, control persons or affiliates of any
thereof shall be subject to any liability for, or any damages, expenses or
losses incurred by the Trust in connection with, any error of judgment, mistake
of law, any act or omission connected with or arising out of any services
rendered under or payments made pursuant to this Agreement or any other matter
to which this Agreement relates, except by reason of willful misfeasance, bad
faith or gross negligence on the part of any such persons in the performance of
your duties under this Agreement or by reason of reckless disregard by any of
such persons of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for
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<PAGE>
the Trust and not as a director, officer, employee, shareholder or agent of you,
or one under your control or discretion, even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
------------------------------------------
This Agreement shall take effect on the date of its execution
and shall remain in force for a period of two (2) years from the date of its
execution with respect to each of the Trust's series established on the date of
such execution and, with respect to any additional series registered after the
date of execution, until the next anniversary date of the Agreement following
the date on which such series becomes effectively registered for sale in a
public offering, and from year to year thereafter as to each series of the
Trust's shares, subject to annual approval by (i) the Board or (ii) a vote of a
majority (as defined in the Investment Company Act of 1940) of the outstanding
voting securities of such series, provided that in either event continuance is
also approved by a majority of the trustees who are not "interested persons" as
defined in the Investment Company Act of 1940 of you or the Trust, by a vote
cast in person at a meeting called for the purpose of voting such approval.
If the shareholders of any series of the Trust's shares fail
to approve the Agreement in the manner set forth above, upon request of the
Board, you will continue to serve or act in such capacity for the series for the
period of time pending required approval of the Agreement, of a new agreement
with you or a different adviser or other definitive action; provided that the
compensation to be paid by the Trust to you for your services to and payments on
behalf of the series will be equal to the lesser of your actual costs incurred
in furnishing such services and payments or the amount you would have received
under this Agreement for furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to a series at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the series of by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
-----------
The Trust and you acknowledge that all rights to the name
"Analysts" belong to you and that the Trust is being granted a limited license
to use such words in its Trust name or in any series name. In the event you
cease to be the adviser to the Trust, the Trust's right to the use of the name
"Analysts" shall automatically cease on the thirtieth day following the
termination of this Agreement. The right to the name may also be withdrawn by
you during the term of this Agreement upon thirty (30) days' written notice by
you to the Trust. Nothing contained herein shall impair or diminish in any
respect, your right to use the name "Analysts" in the name of or in connection
with any other business enterprises with which you are or may become associated.
There is no charge to the Trust for the right to use this name.
8. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the outstanding
voting securities of the series to which the amendment relates and by the Board,
including a majority of the trustees who are not interested persons of you or of
the Trust, cast in person at a meeting called for the purpose of voting on such
approval.
4
<PAGE>
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
-----------------------------------------
The term "Analysts Investment Trust" means and refers to the
Trustees from time to time serving under the Trust's Declaration of Trust as the
same may subsequently thereto have been, or subsequently hereto be, amended. 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 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 officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers 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 of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of Ohio.
10. 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.
11. QUESTIONS OF INTERPRETATION
---------------------------
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(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 Investment Company Act of 1940, as amended (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 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.
12. 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
and your address for this purpose shall be 9200 Montgomery Road, Bldg. D, Suite
13A, Cincinnati, Ohio 45242.
13. COUNTERPARTS
------------
This Agreement may be in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. BINDING EFFECT
--------------
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
5
<PAGE>
15. MISCELLANEOUS
-------------
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST: ANALYSTS INVESTMENT TRUST
/S/ ____________________________ By/S/ ____________________________
David L. Manzler, Sr., Secretary David Lee Manzler, Jr., President
Dated: August 16, 1993
ACCEPTANCE
----------
The foregoing Agreement is hereby accepted.
ATTEST: EQUITY ANALYSTS INC.
/S/ ____________________________ By/S/ ____________________________
David L. Manzler, Jr., Vice President David Lee Manzler, Sr., President
Dated: August 16, 1993
6
UNDERWRITING AGREEMENT
This Agreement is made on August 16, 1993, by and between ANALYSTS
INVESTMENT TRUST, an Ohio business trust (the "Trust"), and EQUITY ANALYSTS
INC., an Ohio corporation ("Underwriter").
WHEREAS, the Trust is an 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 the following series of shares of the Trust (the
"Series"): Analysts Stock Fund and Analysts Fixed Income Fund;
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 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 of any Series 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 sell Shares at their net asset value to the public against orders therefor.
(b) Underwriter will also 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
<PAGE>
orders therefor at their net asset value (as defined in subparagraph 2(d)
hereof). 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.
(c) 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.
(d) The net asset value of the Shares of each Series shall be
determined in the manner provided 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"), 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.
(e) On every sale, the Trust shall receive the applicable net
asset value of the Shares promptly, but in no event later than the tenth
business day following the date on which Underwriter shall have received an
order for the purchase of the Shares.
(f) Upon receipt of purchase instructions, Underwriter will
transmit such instructions to the Trust or its transfer agent for registration
of the Shares purchased.
(g) 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.
2
<PAGE>
(h) 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. SALES 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 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. COMPLIANCE WITH NASD AND GOVERNMENT RULES.
(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, at its own expense, will pay the costs
incurred in establishing and maintaining its relationship with the dealers
selling the Shares. Underwriter will require each dealer with whom Underwriter
has a dealer agreement to conform to the applicable provisions hereof and the
Registration Statement, 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 federal laws required in
order that Shares may be sold in such States as may be mutually agreed upon by
the parties.
3
<PAGE>
(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 TO BE BORNE BY TRUST. The Trust will bear the following
expenses:
(a) preparation, setting in type, printing of sufficient
copies of the prospectus and statement of additional information for
distribution to shareholders, and the distribution to shareholders of the
prospectus and statement of additional information;
(b) preparation, printing and distribution of reports and
other communications to shareholders;
(c) registration of the Shares under the federal securities
law;
(d) qualification of the Shares for sale in the jurisdictions
designated by Underwriter;
(e) qualification of the Trust as a dealer or broker under the
laws of jurisdictions designated by Underwriter as well as qualification of the
Trust to do business in any jurisdiction, if Underwriter determines that such
qualification is necessary or desirable for the purpose of facilitating sales of
the Shares;
(f) maintaining facilities for the issue and transfer of the
Shares;
4
<PAGE>
(g) supplying information, prices and other data to be
furnished by the Trust under this Agreement; and
(h) any original issue taxes or transfer taxes applicable to
the sale or delivery of the Shares of certificates therefor.
8. SERVICES TO AND ACTIONS FOR TRUST, NOT UNDERWRITER.
Any person, even though also a director, officer, employee, shareholder
or agent of Underwriter, who may be or become an officer, trustee, employee or
agent of the Trust, shall be deemed, when rendering services to the Trust or
acting on any business of the Trust (other than services or business in
connection with Underwriter's duties hereunder), to be rendering such services
to or acting solely for the Trust and not as a director, officer, employee,
shareholder or agent, or one under the control or direction of the Underwriter,
even though paid by it.
9. LIMITATION OF LIABILITY. Underwriter may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the Investment Company Act of 1940 or the rules thereunder,
neither Underwriter nor its shareholders, officers, directors, employees,
agents, control person or affiliates of any thereof shall be subject to any
liability for, or any damages, expenses or losses incurred by the Trust in
connection with, any error of judgment, mistake of law, any act or omission
connection with or arising out of any services rendered under or payments made
pursuant to this Agreement or any other matter to which this Agreement relates,
except by reason of willful misfeasance, bad faith or gross negligence on the
part of any such persons in the performance of the duties of Underwriter under
this Agreement or by reason of reckless disregard by any of such persons of the
obligations and duties of Underwriter under this Agreement.
10. MAINTENANCE OF INSURANCE COVERAGE. If the Trust obtains Errors &
Omissions insurance, Underwriter shall be a named insured party on the Trust's
Errors & Omissions policies, which shall include coverage of Underwriter's
officers and employees. Underwriter shall pay its allocable share of
5
<PAGE>
the cost of such policies in accordance with the provisions of the Act. The
scope of coverage, other than the amount of the deductible, and amount of
insurance limits applicable to the Trust on such policies shall also be made
applicable to Underwriter.
11. 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.
12. 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 one year from the date of its execution (unless terminated automatically as
set forth in Section 12, 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.
13. LIMITATION ON LIABILITY. The term "Analysts Investment Trust" means
and refers to the Trustees from time to time serving under the Trust's
Declaration of Trust as the same may subsequently thereto have been, or
subsequently hereto be, amended. 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 Declaration of Trust of the
Trust. The execution and delivery of this Agreement have been authorized
6
<PAGE>
by the Trustees and Shareholders of the Trust and signed by the officers of the
Trust, acting as such, and neither such authorization by such Trustees and
Shareholders nor such execution and delivery by such officers 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 of the Trust as provided
in its Declaration of Trust. A copy of the Agreement and Declaration of Trust of
the Trust is on file with the Secretary of State of Ohio.
14. 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.
15. SUCCESSOR INVESTMENT COMPANY. Unless this Agreement has been
terminated in accordance with Paragraph 11, 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 a reorganization, recapitalization or
change of domicile.
16. 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.
17. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(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
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
7
<PAGE>
order of the Securities and Exchange Commission, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
18. 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
and of Underwriter for this purpose shall be 9200 Montgomery Road, Bldg. D,
Suite 13A, Cincinnati, Ohio 45242.
19. COUNTERPARTS. This Agreement may be in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
20. BINDING EFFECT. Each of the undersigned expressly warrants and
represents that he has the full power and authority to sign this Agreement on
behalf of the party indicated, and that his signature will operate to bind the
party indicated to the foregoing terms.
21. FORCE MAJEURE. If Underwriter shall be delayed in its performance
of services or prevented entirely or in part from performing services due to
causes or events beyond its control, including and without limitation, acts of
God, interruption of power or other utility, transportation or communication
services, acts of civil or military authority, sabotages, national emergencies,
explosion, flood, accident, earthquake or other catastrophe, fire, strike or
other labor problems, legal action, present or future law, governmental order,
rule or regulation, or shortages of suitable parts, materials, labor or
transportation, such delay or non-performance shall be excused and a reasonable
time for performance in connection with this Agreement shall be extended to
include the period of such delay or non-performance.
IN WITNESS WHEREOF, The Trust and Underwriter have each caused this
Agreement to be signed on its behalf, all as of the day and year first above
written.
8
<PAGE>
ATTEST: ANALYSTS INVESTMENT TRUST
/S/ ____________________________ By/S/ _________________________
David L. Manzler, Sr., Secretary David Lee Manzler, Jr., President
ATTEST: EQUITY ANALYSTS INC.
/S/ ____________________________ By/S/ ____________________________
David L. Manzler, Jr., Vice President David L. Manzler, Sr., President
9
CUSTODY AGREEMENT
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Agreement made as of the 17th day of August, 1993, between ANALYSTS
INVESTMENT TRUST, (the "Trust"), a business trust organized under the laws of
Ohio and having its office at 9200 Montgomery Road, Building D., Suite 13A,
Cincinnati, Ohio 45242 acting for and on behalf of Analysts Stock Fund and
Analysts Fixed Income Fund (the "Funds"), which is operated and maintained by
the Trust for the benefit of the holders of shares of the Funds, and Star Bank,
N.A. (the "Custodian"), a national banking association having its principal
office and place of business at Star Bank Center, 425 Walnut Street, Cincinnati,
Ohio 45202, which Agreement provides for the furnishing of custodian services to
the Funds.
WITNESSETH
that for and in consideration of the mutual promises hereinafter set forth the
Trust, on behalf of the Funds, and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
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Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Authorized Person" shall be deemed to include the President,
Secretary, Treasurer, and Vice President, or any other person, whether or not
any such person is an officer or employee of the Trust, duly authorized by the
Board of Trustees of the Trust to give Oral Instructions and Written
Instructions on behalf of the Funds and listed in the Certificate annexed hereto
as Appendix A or such other Certificate as may be received by the Custodian from
time to time, subject in each case to any Limitations on the authority of such
person as set forth in Appendix A or any such Certificate.
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2. "Book-Entry System" shall mean the Federal Reserve/Treasury book-
entry system for United States and federal agency securities, its successor or
successors and its nominee or nominees, provided the Custodian has received a
certified copy of a resolution of Board of Trustees of the Trust specifically
approving deposits in the Book-Entry System.
3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Custodian which is signed on behalf of the Funds by an Officer of the Trust
and is actually received by the Custodian,
4. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository" shall
further mean and include any other person or clearing agency authorized to act
as a depository under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, provided that the Custodian has received
a certified copy of a resolution of the Board of Trustees of the Trust
specifically approving such other person or clearing agency as a depository.
5. "Dividend and Transfer Agent" shall mean the dividend and transfer
agent active, from time to time, in such capacity pursuant to a written
agreement with the Funds, changes in which the Trust shall immediately report to
the Custodian in writing.
6. "Money Market Security" shall be deemed to include, without
imitation, debt obligations issued or guaranteed as to principal and/or interest
by the government of the United States or agencies or instrumentalities thereof,
commercial paper, obligations (including certificates of deposit, bankers'
acceptances, repurchase and reverse repurchase agreements with respect to the
same) and bank time deposits of domestic banks that are members of
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Federal Deposit Insurance Trust, and short-term corporate obligations where the
purchase and sale of such securities normally require settlement in federal
funds or their equivalent on the same day as such purchase or sale.
7. "Officers" shall be deemed to include the President, the Secretary,
the Treasurer, the Controller, and Vice President of the Trust listed in the
Certificate annexed hereto as Appendix A or such other Certificate as may be
received by the Custodian from time to time.
8. "Oral Instructions" shall mean oral instructions actually received
by the Custodian from an Authorized Person (or from a person which the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions from Authorized Persons in such manner so that such Written
Instructions are received by the Custodian on the next business day.
9. "Prospectus" shall mean each Fund's currently effective prospectus
and statement of additional information, as filed with and declared effective by
the Securities and Exchange Commission.
10. "Security or Securities" shall mean Money Market Securities, common
or preferred stocks, options, bonds, debentures , corporate debt securities,
notes, mortgages or other obligations, and any certificates, receipts, warrants
or other instruments representing rights to receive, purchase or subscribe for
the same, or evidencing or representing any other rights or interest therein, or
any property or assets.
11. "Written Instructions" shall mean communication actually received
by the Custodian from one Authorized Person or from one person which the
Custodian reasonably believes in good faith to be an Authorized Person in
writing or by telex or any other such system whereby the receiver of such
communication is able to verify by codes or otherwise with a reasonable degree
of certainty the authenticity of the senders of such communication.
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ARTICLE II
APPOINTMENT OF CUSTODIAN
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The Trust, acting for and on behalf of the Funds, hereby constitutes
and appoints the Custodian as custodian of all the Securities and monies at any
time owned by the Funds during the period of this Agreement (the "Fund's
Assets").
2. The Custodian hereby accepts appointment as such Custodian and
agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III
DOCUMENTS TO BE FURNISHED BY THE TRUST
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The Trust hereby agrees to furnish to the Custodian the following
documents :
1. A copy of its Agreement and Declaration of Incorporation (the
"Declaration of Incorporation") certified by its Secretary.
2. A copy of its By-Laws certified by its Secretary.
3. A copy of the resolution of its Board of Trustees appointing the
Custodian certified by its Secretary.
4. A copy of the most recent Prospectus of the Trust.
5. A Certificate of the President and Secretary setting forth the
names and signatures of the present Officers of the Trust.
ARTICLE IV
CUSTODY OF CASH AND SECURITIES
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1. The Trust will deliver or cause to be delivered to the Custodian all
Fund's Assets, including cash received for the issuance of its shares, at any
time during the period of this Agreement. The Custodian will not be responsible
for such Fund's Assets until actually received by it. Upon such receipt, the
Custodian shall hold in safekeeping and physically segregate at all times from
the property of any other persons, firms or corporations all Fund's
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Assets received by it from or for the account of the Funds. The Custodian will
be entitled to reverse any credits made on the fund's behalf where such credits
have been previously made and monies are not finally collected within 90 days of
the making of such credits. The Custodian is hereby authorized by the Trust
acting on behalf of the Funds, to actually deposit any Fund's Assets in the
Book-Entry system or in a Depository, provided, however, that the Custodian
shall always be accountable to the Trust for the Fund's Assets so deposited.
Fund's Assets deposited in the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including but not limited to accounts in which the Custodian acts in
a fiduciary or representative capacity.
2. The Custodian shall credit to a separate account or accounts in the
name of the Funds all monies received by it for the account of the Funds, and
shall disburse the same only:
(a) In payment for Securities purchased for the account of the
Funds, as provided in Article V;
(b) In payment of dividends or distributions, as provided in
Article VI hereof:
(c) In payment of original issue or other taxes, as provided in
Article VII hereof;
(d) In payment for shares of the Funds redeemed by it, as provided
in Article VII hereof;
(e) Pursuant to Certificates (i) directing payment and setting
forth the name and address of the person to whom the payment is to be made, the
amount of such payment and the purpose for which payment is to be made (the
Custodian not being required to question such direction) or (ii) if reserve
requirements are established for the Funds by law or by valid regulation,
directing the Custodian to deposit a specified amount of collected funds in the
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form of U.S. dollars at a specified Federal Reserve Bank and stating the purpose
of such deposit; or
(f) In reimbursement of the expenses and liabilities of the
Custodian, as provided in paragraph 10 of Article IX hereof.
3. Promptly after the close of business on each day the fund is open
and valuing its portfolio. The Custodian shall furnish the Trust with a detailed
statement of monies held for the Funds under this Agreement and with
confirmations and a summary of all transfers to or from the account of the Funds
during said day. Where Securities are transferred to the account of the Funds
without physical delivery, the Custodian shall also identify as belonging to the
Funds a quantity of Securities in a fungible bulk of Securities registered in
the name of the Custodian (or its nominee) or shown on the Custodian's account
on the books of the Book-Entry System or the Depository. At least monthly and
from time to time, the Custodian shall furnish the Trust with a detailed
statement of the Securities held for the Funds under this Agreement.
4. All Securities held for the Funds, which are issued or issuable only
in bearer form, except such Securities as are held in the Book-Entry System,
shall be held by the Custodian in that form; all other Securities held for the
Funds may be registered in the name of the Funds, in the name of any duly
appointed registered nominee of the Custodian as the Custodian may from time to
time determine, or in the name of the Book-Entry System or the Depository or
their successor or successors, or their nominee or nominees. The Trust agrees to
furnish to the Custodian appropriate instruments to enable the Custodian to hold
or deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or the Depository,
any Securities which it may hold for the account of the Funds and which may from
time to time be registered in the name of the Funds. The
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Custodian shall hold all such Securities which are not held in the Book-Entry
System or by a Depository in a separate account or accounts in the name of the
Funds segregated at all times from those of any other fund maintained and
operated by the Trust and from those of any other person or persons,
5. Unless otherwise instructed to the contrary by a Certificate, the
Custodian shall with respect to all Securities held for the Funds in accordance
with this Agreement:
(a) Collect all income due or payable to the Funds with respect to
the Funds Assets;
(b) Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Surrender Securities in temporary form for definitive
Securities;
(d) Execute, as Custodian, any necessary declarations or
certificates of ownership under the Federal income tax laws or the laws or
regulations of any other taxing authority, including any foreign taxing
authority, now or hereafter in effect; and
(e) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of the
Funds all rights and similar securities issued with respect to any Securities
held by the Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian
directly or through the use of the Book-Entry System or the Depository shall:
(a) Execute and deliver to such persons as may be designated in
such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Funds as owner of any Securities may be exercised ;
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(b) Deliver any Securities held for the Funds in exchange for
other Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) Deliver any Securities held for the account of the Funds to
any protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery; and
(d) Make such transfers or exchanges of the assets of the Funds
and take such other steps as shall be stated in said Certificate to be for the
purpose of effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Funds.
7. The Custodian shall promptly deliver to the Trust all notices, proxy
material and executed but unvoted proxies pertaining to shareholder meetings of
Securities held by the Funds. The Custodian shall not vote or authorize the
voting of any Securities or give any consent, waiver or approval with respect
thereto unless so directed by a Certificate or Written Instruction.
8. The Custodian shall promptly deliver to the Trust all material
received by the Custodian and pertaining to Securities held by the Funds with
respect to tender or exchange offers, calls for redemption or purchase,
expiration of rights, name changes, stock splits and stock dividends, or any
other activity involving ownership rights in such Securities.
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ARTICLE V
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
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1. Promptly after each purchase of Securities by the Funds, the Trust
shall deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, a Certificate or Written Instructions,
and (ii) with respect to each purchase of Money Market Securities, Written
Instructions, a Certificate or Oral Instructions, specifying with respect to
each such purchase: (a) the name of the issuer and the title of the Securities,
(b) the principal amount purchased and accrued interest, if any, (c) the date of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase and (f) the name of the person from whom or the
broker through whom the purchase was made. The Custodian shall upon receipt of
Securities purchased by or for the Funds, pay out of the monies held for the
account of the Funds the total amount payable to the person from whom or the
broker through whom the purchase was made, provided that the same conforms to
the total amount payable as set forth in such Certificate, Written Instructions
or Oral Instructions. With respect to any repurchase agreement transaction for
the Funds, the Custodian shall assure that the collateral reflected on the
transaction advice is received by the Custodian .
2. Promptly after each sale of Securities by the Trust for the account
of the Funds, the Trust shall deliver to the Custodian (i) with respect to each
sale of Securities which are not Money Market Securities, a Certificate or
Written Instructions, and (ii) with respect to each sale of Money Market
Securities, Written Instructions, a Certificate or Oral Instructions, specifying
with respect to each such sale: (a) the name of the issuer and the title of the
Security, (b) the principal amount sold, and accrued interest, if any, (c) the
date of sale, (d) the sale price per unit, (e) the total amount payable to
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the Funds upon such sale and (f) the name of the broker through whom or the
person to whom the sale was made. The Custodian shall deliver the Securities
upon receipt of the total amount payable to the Funds upon such sale, provided
that the same conforms to the total amount payable as set forth in such
Certificate, Written Instructions or Oral Instructions. Subject to the
foregoing, the Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in Securities.
3. Promptly after the time as of which the Trust, on behalf of the
Funds, either-
(a) writes an option on Securities or writes a covered put option
in respect of a Security, or
(b) notifies the Custodian that its obligations in respect of any
put or call option, as described in the Trust's Prospectus, require that the
Funds deposit Securities or additional Securities with the Custodian, specifying
the type and value of Securities required to be so deposited, or
(c) notifies the Custodian that its obligations in respect of any
other Security, as described in each Fund's Prospectus, require that the Funds
deposit Securities or additional Securities with the Custodian, specifying the
type and value of Securities required to be so deposited, the Custodian will
cause to be segregated or identified as deposited, pursuant to the Funds'
obligations as set forth in the Prospectus, Securities of such kinds and having
such aggregate values as are required to meet the Funds' obligations in respect
thereof.
The Trust will provide to the Custodian, as of the end of each
trading day, the market value of the Funds' option liability and the market
value of its portfolio of common stocks.
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4. On contractual settlement date, the account of the Funds will
be charged for all purchases settling on that day, regardless of whether or not
delivery is made. On contractual settlement date, sale proceeds will likewise be
credited to the account of the Funds irrespective of delivery.
In the case of "sale fails", the Custodian may request the
assistance of the Funds in making delivery of the failed Security.
ARTICLE VI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
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1. The Trust shall furnish to the Custodian a copy of the resolution of
the Board of Trustees, certified by the Secretary, either (i) setting forth the
date of the declaration of any dividend or distribution in respect of shares of
the Funds, the date of payment thereof, the record date as of which Funds
shareholders entitled to payment shall be determined, the amount payable per
share to Funds shareholders of record as of that date and the total amount to be
paid by the Dividend and Transfer Agent of the Funds on the payment date, or
(ii) authorizing the declaration of dividends and distributions in respect of
shares of the Funds on a daily basis and authorizing the Custodian to rely on
Written Instructions or a Certificate setting forth the date of the declaration
of any such dividend or distribution, the date of payment thereof, the record
date as of which Funds shareholders entitled to payment shall be determined, the
amount payable per share to Funds shareholders of record as of that date and the
total amount to be paid by the Dividend and Transfer Agent on the payment date.
2. Upon the payment date specified in such resolution, Written
Instructions or Certificate, as the case may be, the Custodian shall arrange for
such payments to be made by the Dividend and Transfer Agent out of monies held
for the account of the Funds,
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ARTICLE VII
SALE AND REDEMPTION OF SHARES OF THE FUND
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1. The Custodian shall receive and credit to the account of the Funds
such payments for shares of the Funds issued or sold from time to time as are
received from the distributor for the Funds' shares, from the Dividend and
Transfer Agent of the Funds, or from the Trust.
2. Upon receipt of Written Instructions, the Custodian shall arrange
for payment of redemption proceeds to be made by the Dividend and Transfer Agent
out of the monies held for the account of the Funds in the total amount
specified in the Written Instructions.
3. Notwithstanding the above provisions regarding the redemption of any
shares of the Funds, whenever shares of the Funds are redeemed pursuant to any
check redemption privilege which may from time to time be offered by the Funds,
the Custodian, unless otherwise subsequently instructed by Written Instructions
shall, upon receipt of any Written Instructions setting forth that the
redemption is in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of such check redemption
privilege out of the money held in the account of the Funds for such purposes.
ARTICLE VIII
INDEBTEDNESS
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In connection with any borrowings, the Trust, on behalf of the Funds,
will cause to be delivered to the Custodian by a bank or broker (including the
Custodian, if the borrowing is from the Custodian), requiring Securities as
collateral for such borrowings, a notice or undertaking in the form currently
employed by any such bank or broker setting forth the amount which such bank or
broker will loan to the Funds against delivery of a stated
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amount of collateral, The Trust shall promptly deliver to the Custodian a
Certificate specifying with respect to each such borrowing: (a) the name of the
bank or broker, (b) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note, duly endorsed
by the Trust, acting on behalf of the Funds, or other loan agreement, (c) the
date and time, if known, on which the loan is to be entered into, (d) the date
on which the loan becomes due and payable, (e) the total amount payable to the
Funds on the borrowing date, (f) the market value of Securities collateralizing
the loan, including the name of the issuer, the title and the number of shares
or the principal amount of any particular Securities and (g) a statement that
such loan is in conformance with the Investment Company Act of 1940 and the
applicable Fund's then current Prospectus The Custodian shall deliver on the
borrowing date specified in a Certificate the specified collateral and the
executed promissory note, if any, against delivery by the lending bank or broker
of the total amount of the loan payable provided that the same conforms to the
total amount payable as set forth in the Certificate. The Custodian may, at the
option of the lending bank or broker, keep such collateral in its possession,
but such collateral shall be subject to all rights therein given the lending
bank or broker, by virtue of any promissory note or loan agreement. The
Custodian shall deliver in the manner directed by the Trust from time to time
such Securities as additional collateral as may be specified in a Certificate to
collateralize further any transaction described in this paragraph. The Trust
shall cause all Securities released from collateral status to be returned
directly to the Custodian and the Custodian shall receive from time to time such
return of collateral as may be tendered to it. In the event that the Trust fails
to specify in a Certificate or Written Instructions the name of the issuer, the
title and number of shares or the principal amount of any particular Securities
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to be delivered as collateral by the Custodian, the Custodian shall not be under
any obligation to deliver any Securities. The Custodian may require such
reasonable conditions with respect to such collateral and its dealings with
third-party lenders as it may deem appropriate.
ARTICLE IX
CONCERNING THE CUSTODIAN
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1. Except as otherwise provided herein, the Custodian shall not be
liable for any loss or damage, including counsel fees, resulting from its action
or omission to act or otherwise, except for any such loss or damage arising out
of its own negligence or willful misconduct. The Trust, on behalf of the Funds
and only from Funds Assets (or insurance purchased by the Trust with respect to
its liabilities on behalf of the Funds hereunder), shall defend, indemnify .and
hold harmless the Custodian and its Trustees, Officers, Employees and Agents
with respect to any loss, claim, liability or cost (including reasonable
attorneys' fees) arising or alleged to arise from or relating to the Trust's
duties with respect to the Funds hereunder or any other action or inaction of
the Trust or its Trustees, Officers, Employees or Agents as to the Funds, except
such as may arise from the negligent action, omission or willful misconduct of
the Custodian, its Directors, Officers, Employees or Agents. The Custodian shall
defend, indemnify and hold harmless the Trust and its Trustees, Officers,
Employees or Agents with respect to any loss, claim, liability or cost
(including reasonable attorneys' fees) arising or alleged to arise from or
relating to the Custodian's duties with respect to the Funds hereunder or any
other action or inaction of the Custodian or its Trustees, Officers, Employees,
Agents, nominees or Sub-Custodians as to the Funds, except such as may arise
from the negligent action, omission or willful misconduct of the Trust, its
Trustees, Officers, Employees or Agents. The Custodian may, with respect to
questions of law
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apply for and obtain the advice and opinion of counsel to the Trust at the
expense of the Funds, or of its own counsel at its own expense, and shall be
fully protected with respect to anything done or omitted by it in good faith in
conformity with the advice or opinion of counsel to the Trust, and shall be
similarly protected with respect to anything done or omitted by it in good faith
in conformity with advice or opinion of its counsel, unless counsel to the Funds
shall, within a reasonable time after being notified of legal advice received by
the Custodian, have a differing interpretation of such question of law. The
Custodian shall be liable to the Trust for any proximate loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence, misfeasance or misconduct on the part of the Custodian
or any of its employees, agents, nominees or Sub-Custodians but not for any
special, incidental, consequential, or punitive damages; provided, however, that
nothing contained herein shall preclude recovery by the Trust, on behalf of the
Funds, of principal and of interest to the date of recovery on, Securities
incorrectly omitted from the Funds' account or penalties imposed on the Trust,
in connection with the Funds, for any failures to deliver Securities.
In any case in which one party hereto may be asked to indemnify the
other or hold the other harmless, the party from whom indemnification is sought
(the "Indemnified Party") shall be advised of all pertinent facts concerning the
situation in question, and the party claiming a right to indemnification (the
"Indemnified Party") will use reasonable care to identify and notify the
Indemnifying Party promptly concerning any situation which presents or appears
to present a claim for indemnification against the Indemnifying Party. The
Indemnifying Party shall have the option to defend the Indemnified Party against
any claim which may be the subject of the indemnification, and in the event the
Indemnifying Party so elects, such
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defense shall be conducted by counsel chosen by the Indemnifying Party and
satisfactory to the Indemnified Party and the Indemnifying Party will so notify
the Indemnified Party and thereupon such Indemnifying Party shall take over the
complete defense of the claim and the Indemnified Party shall sustain no further
legal or other expenses in such situation for which indemnification has been
sought under this paragraph, except the expenses of any additional counsel
retained by the Indemnified Party. In no case shall any party claiming the right
to indemnification confess any claim or make any compromise in any case in which
the other party has been asked to indemnify such party (unless such confession
or compromise is made with such other party's prior written consent).
The obligations of the parties hereto under this paragraph shall
survive the termination of this Agreement.
2. Without limiting the generality of the foregoing, the Custodian,
acting in the capacity of Custodian hereunder, shall be under no obligation to
inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased by or
for the account of the Funds, the legality of the purchase thereof, or the
propriety of the amount paid therefor;
(b) The legality of the sale of any Securities by or for the
account of the Funds, or the propriety of the amount for which the same are
sold;
(c) The legality of the issue or sale of any shares of the Funds,
or the sufficiency of the amount to be received therefor;
(d) The legality of the redemption of any shares of the Funds, or
the propriety of the amount to be paid therefor;
(e) The legality of the declaration or payment of any dividend by
the Trust in respect of shares of the Funds;
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(f) The legality of any borrowing by the Trust, on behalf of the
Funds, using Securities as collateral;
(8) The sufficiency of any deposit made pursuant to a Certificate
described in clause (ii) of paragraph 2(e) of Article IV hereof,
3. The Custodian shall not be liable for any money or collected funds
in U.S. dollars deposited in a Federal Reserve Bank in accordance with a
Certificate described in clause (ii) of paragraph 2(e) of Article IV herein, nor
be liable for or considered to be the Custodian of any money, whether or not
represented by any check, draft, or other instrument for the payment of money,
received by it on behalf of the Funds until the Custodian actually receives and
collects such money directly or by the final crediting of the account
representing the Funds' interest at the Book-Entry System or Depository ,
4. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Funds from the Dividend and
Transfer Agent of the Funds nor to take any action to effect payment or
distribution by the Dividend and Transfer Agent of the Funds of any amount paid
by the Custodian to the Dividend and Transfer Agent of the Funds in accordance
with this Agreement.
5. Income due or payable to the Funds with respect to Funds Assets will
be credited to the account of the Funds as follows:
(a) Dividends will be credited on the first business day following
payable date irrespective of collection.
(b) Interest on fixed rate municipal bonds and debt securities
issued or guaranteed as to principal and/or interest by the government of the
United States or agencies or instrumentalities thereof (excluding securities
issued by the Government National Mortgage Association) will be credited on
payable date irrespective of collection.
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(c) Interest on fixed rate corporate debt securities will be
credited on the first business day following payable date irrespective of
collection.
(d) Interest on variable and floating rate debt securities and
debt securities issued by the Government National Mortgage Association will be
credited upon the Custodian's receipt of funds.
(e) Proceeds from options will be credited upon the Custodian's
receipt of funds.
6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall
not be under any duty or obligation to take action to effect collection of any
amount, if the Securities upon which such amount is payable are in default, or
if payment is refused after due demand or presentation, unless and until (i) it
shall be directed to take such action by a Certificate and (ii) it shall be
assured to its satisfaction of reimbursement of its costs and expenses in
connection with any such action or, at the Custodian's option, prepayment.
7. The Custodian may appoint one or more financial or banking
institutions approved by Board of Trustees of the Trust, as Depository or
Depositories or as Sub-Custodian or Sub-Custodians, including, but not limited
to, banking institutions located in foreign countries, of Securities and monies
at any time owned by the Funds, upon terms and conditions approved in a
Certificate. Current Depository(s) and Sub-Custodian(s) are noted in Appendix B.
The Custodian shall not be relieved of any obligation or liability under this
Agreement in connection with the appointment or activities of such Depositories
or Sub-Custodians.
8. The Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it for the account of
the Funds are such as properly may be held by the Funds under the provisions of
the Declaration of Trust and the Trust's By-Laws.
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9. The Custodian shall treat all records and other information relating
to the Trust, the Funds and the Funds Assets as confidential and shall not
disclose any such records or information to any other person unless (a) the
Trust shall have consented thereto in writing or (b) such disclosure is
compelled by law.
10. The Custodian shall be entitled to receive and the Trust agrees to
pay to the Custodian, for the Funds' account from Funds Assets only, such
compensation as shall be determined pursuant to Appendix C attached hereto, or
as shall be determined pursuant to amendments to such Appendix approved by the
Custodian and the Trust, on behalf of the Funds. The Custodian shall be entitled
to charge against any money held by it for the account of the Funds the amount
of any loss, damage, Liability or expense, including counsel fees, for which it
shall be entitled to reimbursement under the provisions of this Agreement as
determined by agreement of the Custodian and the Trust or by the final order of
any court or arbitrator having jurisdiction and as to which all rights of appeal
shall have expired. The expenses which the Custodian may charge against the
account of the Funds include, but are not limited to, the expenses of
Sub-Custodians incurred in settling transactions involving the purchase and sale
of Securities of the Funds.
11. The Custodian shall be entitled to rely upon any Certificate. The
Custodian shall be entitled to rely upon any Oral Instructions and any Written
Instructions actually received by the Custodian pursuant to Article IV or V
hereof. The Trust agrees to forward to the Custodian Written Instructions from
Authorized Persons confirming Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by hand delivery,
telex or otherwise, on the first business day following the day on which such
Oral Instructions are given to the Custodian. The Trust agrees that the fact
that such confirming instructions are not received by the
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<PAGE>
Custodian shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Trust. The Trust
agrees that the Custodian shall incur no liability to the Funds in acting upon
Oral instructions given to the Custodian hereunder concerning such transactions.
12. The Custodian will (a) set up and maintain proper books of account
and complete records of all transactions in the accounts maintained by the
Custodian hereunder in such manner as will meet the obligations of the Funds
under the Investment Company Act of 1940, with particular attention to Section
31 thereof and Rules 31 a-i and 31 a-2 thereunder, and (b) preserve for the
periods prescribed by applicable Federal statute or regulation all records
required to be so preserved. The books and records of the Custodian shall be
open to inspection and audit at reasonable times and with prior notice by
Officers and auditors employed by the Trust.
13. The Custodian and its Sub-Custodians shall promptly send to the
Trust, for the account of the Funds, any report received on the systems of
internal accounting control of the Book-Entry System or the Depository and with
such reports on their own systems of internal accounting control as the Trust
may reasonably request from time to time.
14. The Custodian performs only the services of a custodian and shall
have no responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Funds. The Custodian is not a selling
agent for shares of the Funds and performance of its duties as a custodial agent
shall not be deemed to be a recommendation to the Custodian's depositors or
others of shares of the Funds as an investment.
-20-
<PAGE>
ARTICLE X
TERMINATION
-----------
1. Either of the parties hereto may terminate this Agreement for any
reason by giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than ninety (90) days after the date
of giving of such notice. If such notice is given by the Trust, on behalf of the
Funds, it shall be accompanied by a copy of a resolution of the Board of
Trustees of the Trust, certified by the Secretary or any Assistant Secretary,
electing to terminate this Agreement and designating a successor custodian or
custodians, each of which shall be a bank or trust company having not less than
$2,000,000 aggregate capital, surplus and undivided profits. In the event such
notice is given by the Custodian, the Trust shall, on or before the termination
date, deliver to the Custodian a copy of a resolution of its Board of Trustees,
certified by the Secretary, designating a successor custodian or custodians to
act on behalf of the Funds. In the absence of such designation by the Trust, the
Custodian may designate a successor custodian which shall be a bank or trust
company having not less than $2,000,000 aggregate capital, surplus, and
undivided profits. Upon the date set forth in such notice this Agreement shall
terminate, and the Custodian, provided that it has received a notice of
acceptance by the successor custodian, shall deliver, on that date, directly to
the successor custodian all Securities and monies then owned by the Funds and
held by it as Custodian. Upon termination of this Agreement, the Trust shall pay
to the Custodian on behalf of the Funds such compensation as may be due as of
the date of such termination. The Trust agrees on behalf of the Funds that the
Custodian shall be reimbursed for its reasonable costs in connection with the
termination of this Agreement.
2. If a successor custodian is not designated by the Trust, on behalf
of
-21-
<PAGE>
the Funds, or by the Custodian in accordance with the preceding paragraph, or
the designated successor cannot or will not serve, the Trust shall upon the
delivery by the Custodian to the Trust of all Securities (other than Securities
held in the Book-Entry System which cannot be delivered to the Trust) and monies
then owned by the Funds, other than monies deposited with a Federal Reserve Bank
pursuant to a Certificate described in clause (ii) of paragraph 2(e) of Article
IV, be deemed to be the custodian for the Funds, and the Custodian shall thereby
be relieved of all duties and responsibilities pursuant to this Agreement, other
than the duty with respect to Securities held in the Book-Entry System which
cannot be delivered to the Trust to hold such Securities hereunder in accordance
with this Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
1. Appendix A sets forth the names and the signatures of all Authorized
Persons. The Trust agrees to furnish to the Custodian, on behalf of the Funds, a
new Appendix A in form similar to the attached Appendix A, if any present
Authorized Person ceases to be an Authorized Person or if any other or
additional Authorized Persons are elected or appointed. Until such new Appendix
A shall be received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instructions or signatures of the present
Authorized Persons as set forth in the last delivered Appendix A.
2. No recourse under any obligation of this Agreement or for any claim
based thereon shall be had against any organizer, shareholder, Officer, Trustee,
past, present or future as such, of the Trust or of any predecessor or
successor, either directly or through the Trust or any such predecessor or
successor, whether by virtue of any constitution, statute or rule of law or
equity, or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Agreement and the obligations
-22-
<PAGE>
thereunder are enforceable solely against Funds Assets, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
organizers, shareholders, Officers, Trustees of the Trust or of any predecessor
or successor, or any of them as such, because of the obligations contained in
this Agreement or implied therefrom and that any and all such Liability is
hereby expressly waived and released by the Custodian as a condition of, and as
a consideration for, the execution of this Agreement.
3. The obligations set forth in this Agreement as having been made by
the Trust have been made by the Trustees of the Trust, acting as such Trustees
for and on behalf of the Funds, pursuant to the authority vested in them under
the laws of the State of Ohio, the Declaration of Incorporation and the By-Laws
of the Trust. This Agreement has been executed by Officers of the Trust as
Officers, and not individually, and the obligations contained herein are not
binding upon any of the Trustees, Officers, Agents or holders of shares,
personally, but bind only the Trust and then only to the extent of Funds Assets.
4. Such provisions of the Prospectus of the Funds and any other
documents (including advertising material) specifically mentioning the Custodian
(other than merely by name and address) shall be reviewed with the Custodian by
the Trust.
5. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at Star
Bank Center, 425 Walnut Street, M. L. 5127, Cincinnati, Ohio 45202, attention
Mutual Funds Custody Department, or at such other place as the Custodian may
from time to time designate in writing.
6. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Trust shall be sufficiently given when
-23-
<PAGE>
delivered to the Trust or on the second business day following the time such
notice is deposited in the U.S. mail postage prepaid and addressed to the Trust
at its office at 9200 Montgomery Road, Building D, Suite 13A, Cincinnati, Ohio
45242, or at such other place as the Trust may from time to time designate in
writing.
7. This Agreement with the exception of Appendix A may not be amended
or modified in any manner except by a written agreement executed by both parties
with the same formality as this Agreement, and authorized and approved by a
resolution of the Board of Trustees of the Trust.
8. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Trust or by the Custodian, and no
attempted assignment by the Trust or the Custodian shall be effective without
the written consent of the other party hereto.
9. This Agreement shall be construed in accordance with the laws of the
State of Ohio.
10. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective Officers, thereunto duly authorized as of
the day and year first above written.
ATTEST:
____________________________
Analysts Investment Trust
David Lee Manzler By: D. L. Manzler, Jr.
ATTEST: Star Bank, N.A.
Stephen J. Bhill By: Nancy V. Kelly
Vice President & Trust Officer
-24-
<PAGE>
APPENDIX A
Authorized Persons Specimen Signatures
------------------ --------------------
President: David Lee Manzler, Jr. /s/ David Lee Manzler, Jr.
Vice President: David L. Manzler, Sr. /s/ David L. Manzler, Sr.
Secretary: David L. Manzler, Sr. /s/ David L. Manzler, Sr.
Treasurer: David Lee Manzler, Jr. /s/ David Lee Manzler, Jr.
Others: * *Craig Hunt /s/ Craig Hunt
*___________________ ___________________
*___________________ ___________________
-25-
<PAGE>
APPENDIX B
The following Depository(s) and Sub-Custodian(s) are employed
currently by Star Bank, N.A. for securities processing and control
The Depository Trust Company (New York)
7 Hanover Square
New York, NY 10004
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
16 Wall Street
New York, NY 10005
-26-
<PAGE>
APPENDIX C
CUSTODY COMPENSATION SCHEDULE
Star Bank, N.A., as Custodian, will receive monthly compensation for
services according to the terms of the following schedule:
I. Portfolio Transaction Fees:
- ------------------------------
(a) For each repurchase agreement transaction $ 7.00
(b) For each portfolio transaction processed through DTC or Federal
Reserve $ 10.00
(c) For each portfolio transaction processed through our New York
custodian $ 25.00
(d) For each GNMA/Amortized Security Purchase $ 40.00
(e) For each GNMA Prin/Int Paydown, GNMA Sales $ 8.00
(f) For each option/future contract written, exercised or expired $
40.00
(g) For each disbursement $ 5.00
(Fund expenses only)
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange.
II. Monthly Base Fee per Account: $375.00
- -----------------------------------------
III. Out-of-Pocket Expenses:
- ----------------------------
The only out-of-pocket expenses charged to your account will be shipping
fees or transfer fees.
IV. IRA Documents:
- ------------------
Per Shareholder/year to hold each IRA Document $ 8.00
All compensation is payable monthly.
-27-
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm and to the use of our report dated
September 11, 1997 in the Post Effective Amendment Number 6 of Analysts
Investment Trust.
Berge & Company LTD
Cincinnati, Ohio
September 29, 1997
August 17, 1993
Analysts Investment Trust
9200 Montgomery Road
Building D, Suite 13A
Cincinnati, Ohio 45242
Gentlemen:
Equity Analysts Agency Inc. Profit Sharing Plan hereby purchases
3,666.6666 shares of the Analysts Stock Fund at $15.00 per share and 3,333.3333
shares of the Analysts Fixed Income Fund at $15.00 per share, representing a
total investment of $105,000 in the shares of the series of Analysts Investment
Trust. Equity Analysts Inc. hereby represents that (1) such purchase is for
investment purposes, and (2) the undersigned has no present intention of
redeeming or selling said shares.
EQUITY ANALYSTS AGENCY INC.
PROFIT SHARING PLAN
By:/S/David L. Manzler
David L. Manzler
Title: Trustee
SCHEDULE FOR COMPUTATION OF EACH PERFORMANCE
QUOTATION FOR THE PERIOD FROM INCEPTION (AUGUST 25,
1993) THROUGH JULY 31, 1994
ANALYSTS STOCK FUND
AVERAGE ANNUAL TOTAL RETURN CALCULATION
$1,000(1+T).93=$1,099
T = .107 = 10.7%
ANALYSTS FIXED INCOME FUND
AVERAGE ANNUAL TOTAL RETURN CALCULATION
$1,000(1+T).93=$942
T = -.062 = -6.2%
ANALYSTS FIXED INCOME FUND
SEC YIELD CALCULATION
Yield=2[(8,148-1,298+1)6-1]=.076=7.6%
82,059 x 13.38
POWER OF ATTORNEY
-----------------
KNOWN ALL MEN BY THESE PRESENTS:
WHEREAS, ANALYSTS INVESTMENT TRUST, a business trust organized under the
laws of the State of Ohio (hereinafter referred to as the "Trust"), periodically
files amendments to its Registration Statement with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended; and
NOW, THEREFORE, the Trust hereby constitutes and appoints JAMES R. CUMMINS
and DONALD S. MENDELSOHN, and each of them, its attorneys for it and in its
name, place and stead, to execute and file any Amendment or Amendments to the
Trust's Registration Statement, hereby giving and granting to said attorneys
full power and authority to do and perform all and every act and thing
whatsoever requisite and necessary to be done in and about the premises as fully
to all intents and purposes as it might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the Trust has caused its name to be subscribed hereto
by the President this 11th day of August, 1993.
ATTEST: ANALYSTS INVESTMENT TRUST
/S/ DAVID L. MANZLER, SR. By: /S/ DAVID LEE MANZLER, JR.
DAVID L. MANZLER, SR., DAVID LEE MANZLER, JR., President
Secretary
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public, in and for said county and state, personally
appeared David Lee Manzler, Jr., President and David L. Manzler, Sr., Secretary,
who represented that they are duly authorized in the premises, and who are known
to me to be the persons described in and who executed the foregoing instrument,
and they duly acknowledged to me that they executed and delivered the same for
the purposes therein expressed.
WITNESS my hand and official seal this 11th day of August, 1993.
/S/ JANICE RHODENBAUGH
Notary Public
<PAGE>
CERTIFICATE
-----------
The undersigned, Secretary of ANALYSTS INVESTMENT TRUST, hereby certifies
that the following resolution was duly adopted by a majority of the Board of
Trustees by Action by Unanimous Consent of Trustees dated August 11, 1993, and
is in full force and effect:
"WHEREAS, ANALYSTS INVESTMENT TRUST, a business trust organized
under the laws of the State of Ohio (hereinafter referred to as the
"Trust"), periodically files amendments to its Registration
Statement with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, as amended;
NOW, THEREFORE, the Trust hereby constitutes and appoints JAMES R.
CUMMINS and DONALD S. MENDELSOHN, and each of them, its attorneys
for it and in its name, place and stead, to execute and file any
Amendment or Amendments to the Trust's Registration Statement,
hereby giving and granting to said attorneys full power and
authority to do and perform all and every act and thing whatsoever
requisite and necessary to be done in and about the premises as
fully to all intents and purposes as it might or could do if
personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or
cause to be done by virtue hereof."
Dated: August 11, 1993 /S/ David L. Manzler, Sr.
David L. Manzler, Sr., Secretary
Analysts Investment Trust
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, ANALYSTS INVESTMENT TRUST, a business trust organized under
the laws of the State of Ohio (hereinafter referred to as the "Trust"),
periodically files amendments to its Registration Statement with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933 and
the Investment Company Act of 1940, as amended; and
WHEREAS, the undersigned is a Trustee and officer of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and
in his name, place and stead, and in his office and capacity in the Trust, to
execute and file any Amendment or Amendments to the Trust's Registration
Statement, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 11th
day of August, 1993.
/S/ DAVID L. MANZLER, SR.
DAVID L. MANZLER, SR., Trustee, Vice
President and Secretary
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public, in and for said county and state, personally
appeared DAVID L. MANZLER, SR. known to me to be the person described in and who
executed the foregoing instrument, and who acknowledged to me that he executed
and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 11th day of August, 1993.
/S/ JANICE RHODENBAUGH
Notary Public
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, ANALYSTS INVESTMENT TRUST, a business trust organized under the
laws of the State of Ohio (hereinafter referred to as the "Trust"), periodically
files amendments to its Registration Statement with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended; and
WHEREAS, the undersigned is a Trustee and officer of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES R.
CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and in
his name, place and stead, and in his office and capacity in the Trust, to
execute and file any Amendment or Amendments to the Trust's Registration
Statement, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 11th day
of August, 1993.
/S/ DAVID L. MANZLER, JR.
DAVID L. MANZLER, JR., Trustee,
President and Treasurer
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public, in and for said county and state, personally
appeared DAVID LEE MANZLER, JR., known to me to be the person described in and
who executed the foregoing instrument, and who acknowledged to me that he
executed and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 11th day of August, 1993.
/S/ JANICE RHODENBAUGH
Notary Public
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, ANALYSTS INVESTMENT TRUST, a business trust organized under the
laws of the State of Ohio (hereinafter referred to as the "Trust"), periodically
files amendments to its Registration Statement with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended; and
WHEREAS, the undersigned is a Trustee of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES R.
CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and in
his name, place and stead, and in his office and capacity in the Trust, to
execute and file any Amendment or Amendments to the Trust's Registration
Statement, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 11th day
of August, 1993.
/S/ WALTER E. BOWLES, III
WALTER E. BOWLES, III, Trustee
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public, in and for said county and state, personally
appeared WALTER E. BOWLES, III, known to me to be the person described in and
who executed the foregoing instrument, and who acknowledged to me that he
executed and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 11th day of August, 1993.
/S/ JANICE RHODENBAUGH
Notary Public
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, ANALYSTS INVESTMENT TRUST, a business trust organized under the
laws of the State of Ohio (hereinafter referred to as the "Trust"), periodically
files amendments to its Registration Statement with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended; and
WHEREAS, the undersigned is a Trustee of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES R.
CUMMINS and DONALD S. MENDELSOHN, and each of them, his attorneys for him and in
his name, place and stead, and in his office and capacity in the Trust, to
execute and file any Amendment or Amendments to the Trust's Registration
Statement, hereby giving and granting to said attorneys full power and authority
to do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully to all intents and purposes as he
might or could do if personally present at the doing thereof, hereby ratifying
and confirming all that said attorneys may or shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 11th day
of August, 1993.
/S/ ROBERT W. BUECHNER
ROBERT W. BUECHNER, Trustee
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public, in and for said county and state, personally
appeared ROBERT W. BUECHNER, known to me to be the person described in and who
executed the foregoing instrument, and who acknowledged to me that he executed
and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 11th day of August, 1993.
/S/ JANICE RHODENBAUGH
Notary Public
