Filed with the Securities and Exchange Commission on September 30, 1998
1933 Act Registration File No.33-84762
1940 Act File No. 811-8648
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
|---|
Pre-Effective Amendment No. | |
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|---|
Post- Effective Amendment No. | X |
6 |---|
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
|---|
Amendment No 9 | X |
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KIEWIT MUTUAL FUND
------------------
(Exact Name of Registrant as Specified in Charter)
1000 KIEWIT PLAZA, OMAHA, NE 68131-3374
---------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (402) 342-2052
--------------
Kenneth D. Gaskins, Esq., Secretary Copy to:
Kiewit Mutual Fund Joseph V. Del Raso, Esq
1000 Kiewit Plaza Pepper, Hamilton LLP
Omaha, NE 68131-3374 3000 Two Logan Square
(Name and Address of Agent for Service) Philadelphia, PA 19103
It is proposed that this filing will become effective
immediately upon filing pursuant to paragraph (b)
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on pursuant to paragraph (b)
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X 60 days after filing pursuant to paragraph (a)(1)
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on pursuant to paragraph (a)1
--------- -------------------------
75 days after filing pursuant to paragraph (a)(2)
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on 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.
<PAGE>
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
KIEWIT MUTUAL FUND
Items Required By Form N-1A
PART A - PROSPECTUS
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
1. Cover Page Cover Page
2. Synopsis Highlights; Expense Table
3. Condensed Financial Financial Highlights;
Information Performance Information
4. General Description of Cover Page; Highlights; Investment
Registrant Objective and Policies; Risk Factors;
General Information
5. Management of the Fund Management of the Fund
6. Capital Stock and Other Dividends, Capital Gains Distributions
Securities and Taxes; Shareholder Accounts;
General Information
7. Purchase of Securities Highlights; Purchase of Shares;
Being Offered Shareholder Accounts; Valuation of Shares;
Exchange of Shares
8. Redemption or Repurchase Shareholder Accounts; Redemption of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
KIEWIT MUTUAL FUND
Items Required By Form N-1A (continued)
PART B - STATEMENT OF ADDITIONAL INFORMATION
Caption in Statement of
Item No. Item Caption Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information History
and History
13. Investment Objectives Investment Limitations and Policies
and Policies
14. Management of the Fund Management of the Fund
15. Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Securities
16. Investment Advisory and Management of the Fund; Other
Other Services Information
17. Brokerage Allocation Brokerage Transactions
18. Capital Stock and Other Not Applicable
Securities
19. Purchase, Redemption and Purchase and Redemption of Shares
Pricing of Securities Being Offered
20. Tax Status Tax Matters
21. Underwriters Management of the Fund
22. Calculation of Performance Calculation of Performance Data
Data
23. Financial Statements Financial Statements; Report of
Independent Accountants
<PAGE>
KIEWIT MUTUAL FUND
K CLASS SHARES
PROSPECTUS
October ___, 1998
This prospectus describes the KIEWIT MONEY MARKET PORTFOLIO, KIEWIT
GOVERNMENT MONEY MARKET PORTFOLIO, KIEWIT INTERMEDIATE-TERM BOND PORTFOLIO AND
THE KIEWIT EQUITY PORTFOLIO (collectively the "Portfolios" or "Feeder
Portfolios" and individually a "Portfolio"), each a series of shares issued by
Kiewit Mutual Fund (the "Fund"). The address of the Fund is c/o PFPC, Inc., P.O.
Box 8812, Wilmington, DE 19899, (800) 254-3948. Each Portfolio is an open-end,
diversified, management investment company with two separate classes of shares:
K Class Shares and S Class Shares. Shares of each class represent equal,
pro-rata interests in a Portfolio and accrue dividends in the same manner,
except that S Class Shares bear distribution expenses payable by the Class as
compensation for distribution of the S Class shares. The securities offered in
this Prospectus are K Class Shares, which are not subject to any sales or
distribution charges. Information concerning the Fund's S Class shares may be
obtained by calling the Fund at the telephone number stated above.
The Fund has established four series of shares, each of which
represents a separate class of the Fund's shares of beneficial interest, having
its own investment objective and policies. The investment objective of the
KIEWIT MONEY MARKET PORTFOLIO and KIEWIT GOVERNMENT MONEY MARKET PORTFOLIO is to
provide high current income while maintaining a stable share price. The
investment objective of the KIEWIT INTERMEDIATE-TERM BOND PORTFOLIO is to
provide as high a level of current income as is consistent with reasonable risk.
The investment objective of the KIEWIT EQUITY PORTFOLIO is to achieve long-term
capital appreciation.
Unlike many other investment companies which directly acquire and
manage their own portfolio of securities, each Portfolio seeks to achieve its
investment objective by investing all of its investable assets in a
corresponding series of shares of Kiewit Investment Trust (the "Trust"), an
open-end, management investment company that issues series of shares
(individually and collectively, the "Series") having the same investment
objective, policies and limitations as each of the Portfolios. The investment
experience of each Feeder Portfolio will correspond directly with the investment
experience of its corresponding Series. Investors should carefully consider this
investment approach. For additional information, see "Special Information About
The Portfolios' Structure."
<PAGE>
This prospectus contains information about the Portfolios that
prospective investors should know before investing and should be read carefully
and retained for future reference. A Statement of Additional Information dated
October __, 1998 is incorporated herein by reference, has been filed with the
Securities and Exchange Commission and is available upon request, without
charge, by writing or calling the Fund at the above address or telephone number.
THE SHARES OF THE KIEWIT MONEY MARKET PORTFOLIO AND KIEWIT GOVERNMENT MONEY
MARKET PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
WHILE SUCH PORTFOLIOS WILL MAKE EVERY EFFORT TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE, THERE IS NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE
TO DO SO.
- --------------------------------------------------------------------------------
|THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND|
|EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION|
|OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF|
|THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. |
- --------------------------------------------------------------------------------
2
<PAGE>
TABLE OF CONTENTS
PAGE
HIGHLIGHTS.....................................................................4
EXPENSE TABLE..................................................................7
FINANCIAL HIGHLIGHTS...........................................................9
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE...........................12
INVESTMENT OBJECTIVES AND POLICIES............................................13
Kiewit Money Market Portfolio........................................13
Kiewit Government Money Market Portfolio ............................15
Kiewit Intermediate-Term Bond Portfolio..............................16
Kiewit Equity Portfolio..............................................17
Other Investment Policies............................................18
RISK FACTORS..................................................................20
MANAGEMENT OF THE FUND........................................................21
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES..............................23
PURCHASE OF SHARES............................................................26
SHAREHOLDER ACCOUNTS..........................................................27
VALUATION OF SHARES...........................................................27
EXCHANGE OF SHARES............................................................28
REDEMPTION OF SHARES..........................................................29
PERFORMANCE INFORMATION.......................................................30
GENERAL INFORMATION...........................................................31
APPENDIX - DESCRIPTION OF RATINGS.............................................33
3
<PAGE>
HIGHLIGHTS
THE FUND
The Fund is an open-end, diversified management investment company
commonly known as a "mutual fund." The Fund was organized as a Delaware business
trust on June 1, 1994 and is registered under the Investment Company Act of
1940, as amended (the "1940" Act). The Fund has established four series of
shares: Kiewit Money Market Portfolio, Kiewit Government Money Market Portfolio,
Kiewit Intermediate-Term Bond Portfolio and Kiewit Equity Portfolio. Each
Portfolio offers two classes of shares, K Class Shares and S Class Shares. All
shares that were registered and outstanding as of February 28, 1997 were
redesignated as K Class Shares.
INVESTMENT OBJECTIVES
The investment objective of each Portfolio of Kiewit Mutual Fund is to
provide its investors with:
Money Market High current income, while maintaining a stable share
price. The Money Market Portfolio will invest all of
its assets in the Money Market Series of the Trust,
which in turn invests in short-term money market
securities.
Government Money Market High current income, while maintaining a stable share
and a credit rating in the highest category for money
market funds as determined by an independent rating
agency. The Government Money Market Portfolio will
invest all of its assets in the Government Money Market
Series of the Trust, which in turn invests in
securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities.
Intermediate-Term Bond High level of current income, consistent with
reasonable risk. The Portfolio will invest all of its
assets in the Kiewit Intermediate-Term Bond Series of
the Trust, which in turn invests in investment grade
debt securities.
Equity Long-term capital appreciation. The Portfolio will
invest all of its assets in the Kiewit Equity Series of
the Trust, which in turn invests in a diversified
portfolio of U.S. equity securities of medium and large
capitalization companies.
4
<PAGE>
Although the investment objective of each Portfolio is not fundamental and may
be changed by the Board of Trustees without shareholder approval, the Fund
intends to notify shareholders before making any material change. Due to the
inherent risks of securities investments, there can be no assurance that a
Portfolio will achieve its objective. See "Investment Objectives and Policies."
HOW TO PURCHASE SHARES
After you open an account, you may purchase K Class Shares by (a)
writing the Fund and enclosing your check as payment or (b) by calling the Fund
at (800) 254-3948 to arrange for payment by wire transfer. You may open an
account by mailing a completed application form to the Fund. The public offering
price of the shares of each Portfolio is the net asset value per share next
determined after acceptance of the purchase order and payment. The K Class
Shares may be purchased without a sales load, exchange fee, or distribution fee
under a Rule 12b-1 plan. See "Purchase Of Shares."
HOW TO REDEEM SHARES
You may redeem K Class Shares by mailing written instructions to the
Fund or by calling the Fund at (800) 254-3948 (if you requested telephone
redemption privileges on an application form). Shares will be redeemed at the
net asset value per share next determined after acceptance of a redemption
request. The Fund will promptly mail you a check, unless other arrangements have
been made. See "Redemption Of Shares."
DIVIDEND REINVESTMENT
Each Portfolio, except the Kiewit Equity Portfolio, intends to pay
monthly dividends from its net investment income and will pay net capital gains,
if any, annually. The Kiewit Equity Portfolio intends to pay annual dividends
from net investment income, together with any net capital gains.
You may choose to receive dividends and capital gains distributions in
cash or you may choose to automatically reinvest them in additional shares of
the Portfolio. See "Dividends, Capital Gains Distributions And Taxes."
INVESTMENT MANAGER, UNDERWRITER AND SERVICING AGENTS
Wilmington Trust Company (the "Manager") serves as the investment
manager of each Series of the Trust and also provides the Portfolios with
certain administrative services. Effective October __, 1998, Wilmington Trust
Company replaced Kiewit Investment Management Corp., as the Series' investment
manager. See "Management Of The Fund." Provident Distributors, Inc. serves as
the Portfolios' underwriter. PNC Bank, N.A. serves as the custodian of the
Portfolios' assets and PFPC Inc. serves as the Portfolios' administrator,
transfer agent and accounting services agent.
5
<PAGE>
RISK FACTORS
Each Portfolio, through its investment in a corresponding Series of the
Trust, is subject to certain risks. Investors should consider a number of
factors: (i) each Series of the Trust invests in securities that fluctuate in
value, and there can be no assurance that the objective of any Portfolio will be
achieved; (ii) each Series of the Trust may invest in repurchase and reverse
repurchase agreements, which involve the risk of loss if the counterparty
defaults on its obligations under the agreement; (iii) each Series of the Trust
has reserved the right to borrow amounts not exceeding 33% of its net assets;
and (iv) the Kiewit Intermediate-Term Bond Series may invest in mortgage
securities, whose market values may vary with changes in market interest rates
to a greater or lesser extent than the market values of other debt securities.
Additionally, the policy of the Portfolios to invest in the corresponding Series
of the Trust also involves certain risks. See "Risk Factors."
6
<PAGE>
EXPENSE TABLE
SHAREHOLDER TRANSACTION COSTS None
ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets)
Govern-
ment
Money Money Intermediate-
Market Market Term Bond Equity
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
Management Fees 0.09% 0.09% 0.32% 0.57%
(after fee waiver) (1)
12b-1 Fees none none none none
Other Expenses 0.11% 0.11% 0.18% 0.23%
Total Portfolio 0.20% 0.20% 0.50% 0.80%
Operating Expenses (2)
(1) The information in the Expense Table has been restated to reflect changes in
the amounts of management fees waived and Fund expenses assumed. The table
summarizes the aggregate annual operating expenses of both the Portfolios' K
Class Shares and the respective Series of the Trust in which the Portfolios
invest. (See "Management Of The Fund" for a description of Portfolio and Series
expenses.) Wilmington Trust Company has agreed to waive all or a portion of its
advisory fee and to assume certain expenses in order to limit annual operating
expenses of the K Class Shares for the current fiscal year. Absent such waiver,
the advisory fees would be .20% for the Money Market Series; .20% for the
Government Money Market Series; .40% for the Intermediate-Term Series; and .70%
for the Equity Series. The Manager may terminate such waiver and assumption of
expenses at any time.
(2) Absent fee waivers by the Series' previous investment adviser, Kiewit
Investment Management Corp., the total operating expenses of each Portfolio's K
Class Shares for the fiscal year ended June 30, 1998, would have been: Money
Market Portfolio 0.31%; Government Money Market Portfolio 0.31%;
Intermediate-Term Bond Portfolio 0.58%; and Equity Portfolio 0.93%.
The above figures reflect annualized operating expenses of each Feeder
Portfolio's K Class Shares and its corresponding Series, and estimated
annualized operating expenses of the Government Money Market Portfolio and its
corresponding series, for the fiscal year ended June 30, 1998.
7
<PAGE>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Money Market Portfolio $2 $6 $11 $26
Government Money Market
Portfolio $2 $6 n/a n/a
Intermediate-Term Bond
Portfolio $5 $16 $28 $63
Equity Portfolio $8 $26 $44 $99
The purpose of the above Expense Table and Example is to assist investors in
understanding the various costs and expenses that an investor in the Portfolios'
K Class Shares will bear directly or indirectly. The information set forth above
relates only to the Portfolios' K Class Shares, which shares are subject to
different fees and expenses than S Class Shares.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. The above
Example is based on the Portfolios' actual expenses for the most recent fiscal
period.
The Board of Trustees of the Fund has considered whether such expenses will be
more or less than they would be if the Feeder Portfolios invest directly in the
securities held by the Trust Series. The aggregate amount of expenses for a
Feeder Portfolio and its corresponding Trust Series may be greater than if the
Portfolio were to invest directly in the securities held by the corresponding
Trust Series. However, the total expense ratios for the Feeder Portfolios and
the Trust Series are expected to be less over time than such ratios would have
been if the Portfolios had continued to invest directly in the underlying
securities. This is because this arrangement enables various institutional
investors, including the Feeder Portfolios, to pool their assets, which may be
expected to result in economies by spreading certain fixed costs over a larger
asset base. Each shareholder in a Trust Series, including a Feeder Portfolio,
will pay its proportionate share of the expenses of that Trust Series.
8
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables include selected data for a K Class Share outstanding from
the effective date of the Fund's registration statement under the Securities Act
of 1933 (December 6, 1994) or commencement of operations, whichever occurs
later, through June 30, 1998. The amounts in these tables are derived from, and
should be read in conjunction with, the Fund's audited financial statements, the
notes thereto and the report of independent accountants thereon all of which are
incorporated by reference into the Fund's Statement of Additional Information.
With reference to the period ended June 30, 1995, see the report of independent
accountants included in the Fund's registration statement and which is available
upon request, without charge, by writing or calling the Fund c/o PFPC, Inc.,
P.O. Box 8812, Wilmington, DE 19899, (800) 2KIEWIT. Financial data is not
presented for the Kiewit Government Money Market Portfolio which had not
commenced operations as of June 30, 1998.
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
For the Period
For the Fiscal For the Fiscal For the Fiscal December 6,
Year Ended Year Ended Year Ended 1994(DAGGER) through
June 30, 1998 June 30, 1997 June 30, 1996 June 30, 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF
PERIOD................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
NET INVESTMENT INCOME................. 0.05 0.05 0.05 0.03
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
FROM NET INVESTMENT INCOME............ (0.05) (0.05) (0.05) (0.03)
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE - END OF PERIOD........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================================================================================================================
TOTAL RETURN.............................. 5.61% 5.43% 5.61% 3.31%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses 2............................ 0.20% 0.20% 0.20% 0.30%3
Net investment income 2............... 5.46% 5.31% 5.47% 5.82%3
Net assets at end of period (000)..... $ 240,359 $ 415,285 $ 389,967 $ 380,708
<FN>
(DAGGER) Effective date of the Fund's registration statement.
1 The total return for the period has not been annualized.
2 The annualized expense ratio for the Money Market Portfolio, had there been
no fees waived by the previous investment adviser, would have been 0.31%,
0.27%, 0.27% and 0.30% for the fiscal years ended June 30, 1998, 1997,
1996, and for the period ended June 30, 1995, respectively. The annualized
net investment income ratio for the Money Market Portfolio, had there been
no fees waived by the previous investment adviser, would have been 5.35%,
5.24%, 5.40% and 5.82% for the fiscal years ended June 30, 1998, 1997, 1996
and for the period ended June 30, 1995, respectively. The expense and net
investment income ratios for the fiscal years ended June 30, 1998 and 1997
include expenses allocated from the Series.
3 Annualized.
</FN>
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS - CONTINUED
INTERMEDIATE-TERM BOND PORTFOLIO(DOUBLE DAGGER)
<TABLE>
<CAPTION>
For the Period
For the Fiscal For the Fiscal For the Fiscal December 6,
Year Ended Year Ended Year Ended 1994(DAGGER) through
June 30, 1998 June 30, 1997 June 30, 1996 June 30, 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF
PERIOD................................ $ 10.15 $ 10.05 $ 10.25 $ 9.80
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income................. 0.59 0.65 0.65 0.40
Net realized and unrealized gain
(loss) on investments............ 0.28 0.10 (0.20) 0.45
- -------------------------------------------------------------------------------------------------------------------
Total from investment
operations.................... 0.87 0.75 0.45 0.85
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
From net investment income............ (0.59) (0.65) (0.65) (0.40)
From net realized capital gain........ (0.03) ---- ---- ----
- -------------------------------------------------------------------------------------------------------------------
Total distributions.............. (0.62) (0.65) (0.65) (0.40)
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE - END OF PERIOD........... $ 10.40 $ 10.15 $ 10.05 $ 10.25
===================================================================================================================
TOTAL RETURN.............................. 8.68% 7.51% 4.48% 8.63%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses 2............................ 0.50% 0.50% 0.50% 0.50%3
Net investment income 2............... 5.63% 6.27% 6.37% 6.72%3
Portfolio turnover.................... ----4 ----4 86.06% 121.36%3
Net assets at end of period (000)..... $ 60,797 $ 108,314 $ 122,952 $ 105,020
<FN>
(DOUBLE DAGGER) The per share data, for the Intermediate-Term Bond Portfolio,
has been restated to reflect a 1 for 5 reverse stock split which
occurred on September 25, 1997.
(DAGGER) Effective date of the Fund's registration statement.
1 The total return for the period has not been annualized.
2 The annualized expense ratio for the Intermediate-Term Bond Portfolio, had
there been no fees waived by the previous investment adviser, would have
been 0.58%, 0.58%, 0.57% and 0.63% for the fiscal years ended June 30,
1998, 1997, 1996, and for the period ended June 30, 1995, respectively. The
annualized net investment income ratio for the Intermediate-Term Bond
Portfolio, had there been no fees waived by the previous investment
adviser, would have been 5.55%, 6.19%, 6.30% and 6.59% for the fiscal years
ended June 30, 1998, 1997, 1996 and for the period ended June 30, 1995,
respectively. The expense and net investment income ratios for the fiscal
years ended June 30, 1998 and 1997 include expenses allocated from the
Series.
3 Annualized
4 The Portfolio turnover rates for the Intermediate-Term Bond Series for this
fiscal years ended June 30, 1998 and 1997 were 236.36% and 51.57%,
respectively.
</FN>
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS - CONTINUED
EQUITY PORTFOLIO
<TABLE>
<CAPTION>
For the Period
For the Fiscal For the Fiscal For the Fiscal January 5,
Year Ended Year Ended Year Ended 1995(DAGGER) through
June 30, 1998 June 30, 1997 June 30, 1996 June 30, 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF
PERIOD............................... $ 20.56 $ 16.58 $ 14.04 $ 12.50
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income................ 0.16 0.13 0.13 0.11
Net realized and unrealized
gain on investments.............. 4.52 4.09 2.56 1.43
- -------------------------------------------------------------------------------------------------------------------
Total from investment
operations................... 4.68 4.22 2.69 1.54
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
From net investment income........... (0.16) (0.15) (0.15) ----
From net realized capital gain....... (6.36) (0.09) ---- ----
- -------------------------------------------------------------------------------------------------------------------
Total distributions............. (6.52) (0.24) (0.15) ----
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE - END OF PERIOD.......... $ 18.72 $ 20.56 $ 16.58 $ 14.04
===================================================================================================================
TOTAL RETURN............................. 29.09% 25.67% 19.24% 12.32%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses 2........................... 0.80% 0.80% 0.80% 0.80%3
Net investment income 2.............. 0.81% 0.80% 1.34% 3.06%3
Portfolio turnover................... ----4 ----4 16.95% 0.00%3
Net assets at end of period (000).... $ 110,052 $ 88,763 $ 66,137 $ 20,865
<FN>
(DAGGER) Commencement of Operations.
1 The total return for the period has not been annualized.
2 The annualized expense ratio had there been no fees waived by the previous
investment adviser, would have been 0.93%, 0.94%, 1.05% and 2.56% for the
fiscal years ended June 30, 1998, 1997, 1996 and for the period ended June
30, 1995, respectively. The annualized net investment income ratio for the
Equity Portfolio, had there been no fees waived by the previous investment
adviser, would have been 0.68%, 0.66%, 1.09% and 1.30% for the fiscal years
ended June 30, 1998, 1997, 1996 and for the period ended June 30, 1995,
respectively. The expense and net investment income ratios for the fiscal
years ended June 30, 1998 and 1997 include expenses allocated from the
Series.
3 Annualized.
4 The portfolio turnover rates for the Equity Series for this fiscal years
ended June 30, 1998 and 1997 were 93.08% and 26.33%, respectively.
</FN>
</TABLE>
<PAGE>
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE
Each of the four Portfolios of the Fund, unlike many other investment
companies which directly acquire and manage their own portfolio of securities,
seeks to achieve its investment objective by investing all of its investable
assets in a corresponding Series of the Trust, an open-end, management
investment company, registered under the 1940 Act, that issues Series having the
same investment objective as each of the Portfolios. The investment objectives
of the Portfolios and their corresponding Series may be changed without
shareholder approval. Shareholders of a Feeder Portfolio will receive written
notice at least 30 days prior to the effective date of any change in the
investment objective of the Portfolio or its corresponding Trust Series.
This prospectus describes the investment objective, policies and
restrictions of each Feeder Portfolio and its corresponding Series. (See
"Portfolio Characteristics And Policies - Kiewit Money Market Portfolio, Kiewit
Government Money Market Portfolio, Kiewit Intermediate-Term Bond Portfolio and
Kiewit Equity Portfolio.") In addition, an investor should read "Management Of
The Fund" for a description of the management and other expenses associated with
the Feeder Portfolios' investment in the Trust. Other institutional investors,
including other mutual funds, may invest in each Series, and the expenses of
such other funds and, correspondingly, their returns may differ from those of
the Portfolios. Please contact the Fund c/o PFPC, Inc., P.O. Box 8812,
Wilmington, DE 19899, 1-800-254-3948 for information about the availability of
investing in a Series of the Trust other than through a Feeder Portfolio.
The shares of the Trust Series will be offered to institutional
investors for the purpose of increasing the funds available for investment, to
reduce expenses as a percentage of total assets and to achieve other economies
that might be available at higher asset levels. While investment in a Series by
other institutional investors offers potential benefits to the Series and,
through their investment in the Series, the Feeder Portfolios also,
institutional investment in the Series also entails the risk that economies and
expense reductions might not be achieved, and additional investment
opportunities, such as increased diversification, might not be available if
other institutions do not invest in the Series. Also, if an institutional
investor were to redeem its interest in a Series, the remaining investors in
that Series could experience higher pro rata operating expenses, thereby
producing lower returns, and the Series' security holdings may become less
diverse, resulting in increased risk. Institutional investors that have a
greater pro rata ownership interest in a Series than the corresponding Feeder
Portfolio could have effective voting control over the operation of the Series.
Further, if a Series changes its investment objective in a manner which
is inconsistent with the investment objective of a corresponding Feeder
Portfolio and the Portfolio does not make a similar change in its investment
objective, the Portfolio would be forced to withdraw its investment in the
Series and either seek to invest its assets in
12
<PAGE>
another registered investment company with the same investment objective as the
Portfolio, which might not be possible, or retain an investment advisor to
manage the Portfolio's assets in accordance with its own investment objective,
possibly at increased cost. A withdrawal by a Feeder Portfolio of its investment
in the corresponding Series could result in a distribution in kind of portfolio
securities (as opposed to a cash distribution) to the Portfolio. Should such a
distribution occur, the Portfolio could incur brokerage fees or other
transaction costs in converting such securities to cash in order to pay
redemptions. In addition, a distribution in kind to the Portfolio could result
in a less diversified portfolio of investments and could affect adversely the
liquidity of the Portfolio. Moreover, a distribution in kind may constitute a
taxable exchange for federal income tax purposes resulting in gain or loss to
the Feeder Portfolios. Any net capital gains so realized will be distributed to
such a Portfolio's shareholders as described in "Dividends, Capital Gains
Distributions And Taxes" below.
Finally, the Feeder Portfolios' investment in the shares of a
registered investment company such as the Trust is relatively new and results in
certain operational and other complexities. However, management believes that
the benefits to be gained by shareholders outweigh the additional complexities
and that the risks attendant to such investment are not inherently different
from the risks of direct investment in securities of the type in which the Trust
Series invest.
INVESTMENT OBJECTIVES AND POLICIES
KIEWIT MONEY MARKET PORTFOLIO
The Kiewit Money Market Portfolio pursues its investment objective by
investing all of its assets in the Money Market Series of the Trust (the "Money
Market Series") which has the same investment objective and policies as the
Portfolio. The investment objective of the Money Market Series is to provide
high current income while maintaining a stable share price by investing in
short-term money market securities. The Money Market Series invests in U.S.
dollar-denominated money market instruments that mature in 13 months or less,
maintains an average weighted maturity of 90 days or less and limits its
investments to those investments which the Board of Trustees determines present
minimal credit risks.
The Money Market Series will invest in the following money market
obligations issued by financial institutions, nonfinancial corporations, and the
U.S. Government, state and municipal governments and their agencies or
instrumentalities:
(1) United States Treasury obligations including bills, notes, bonds
and other debt obligations issued by the United States Treasury. These
securities are backed by the full faith and credit of the U.S. Government.
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(2) Obligations of agencies and instrumentalities of the U.S.
Government which are supported by the full faith and credit of the U.S.
Government, such as securities of the Government National Mortgage Association,
or which are supported by the right of the issuer to borrow from the U.S.
Treasury, such as securities issued by the Federal Financing Bank; or which are
supported by the credit of the agency or instrumentality itself, such as
securities of Federal Farm Credit Banks.
(3) Repurchase agreements that are fully collateralized by the
securities listed in (1) and (2) above.
(4) Commercial paper at the time of purchase rated in the highest
category of short-term debt ratings of any two Nationally Recognized Statistical
Ratings Organization ("NRSROs") (such as Moody's Investor Services, Inc. and
Standard & Poor's Rating Services) or, if unrated, issued by a corporation
having outstanding comparable obligations that are rated in the highest category
of short-term debt ratings. See "Appendix Description Of Ratings."
(5) Corporate obligations having a remaining maturity of 397 calendar
days or less, issued by corporations having outstanding comparable obligations
that are (a) rated in the two highest categories of any two NRSROs or (b) rated
no lower than the two highest long-term debt ratings categories by any NRSRO.
See "Appendix - Description Of Ratings."
(6) Obligations of U.S. banks, such as certificates of deposit, time
deposits and bankers' acceptances. The banks must have total assets exceeding $1
billion.
(7) Short-term Eurodollar and Yankee obligations of banks having total
assets exceeding one billion dollars. Eurodollar bank obligations are
dollar-denominated certificates of deposit or time deposits issued outside the
U.S. capital markets by foreign branches of U.S. banks or by foreign banks;
Yankee bank obligations are dollar-denominated obligations issued in the U.S.
capital markets by foreign banks.
The Money Market Series will not invest more than 5% of its total
assets in the securities of a single issuer. Up to 10% of the Money Market
Series' net assets may be invested in "restricted" and other illiquid money
market securities, which are not freely marketable under the Securities Act of
1933 (the "1933 Act").
The Money Market Series may invest in repurchase agreements. A
repurchase agreement is a means of investing monies for a short period. In a
repurchase agreement, a seller--a U.S. commercial bank or recognized U.S.
securities dealer--sells securities to the Money Market Series and agrees to
repurchase the securities at the Money Market Series' cost plus interest within
a specified period (normally one day). In these transactions, the securities
purchased by the Money Market Series will have a total value equal to or in
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excess of the value of the repurchase agreement, and will be held by the Money
Market Series' custodian bank until repurchased. Under the 1940 Act, a
repurchase agreement is deemed to be the loan of money by the Money Market
Series to the seller, collateralized by the underlying securities.
Eurodollar and Yankee obligations are subject to the same risks that
pertain to domestic issues, notably credit risk, market risk and liquidity risk.
Additionally, Eurodollar (and to a limited extent, Yankee) obligations are
subject to certain sovereign risks. One such risk is the possibility that a
foreign government might prevent dollar-denominated funds from flowing across
its borders. Other risks include: adverse political and economic developments in
a foreign country; the extent and quality of government regulation of financial
markets and institutions; the imposition of foreign withholding taxes; and
expropriation or nationalization of foreign issuers. However, Eurodollar and
Yankee obligations will undergo the same credit analysis as domestic issues in
which the Money Market Series invests, and foreign issuers will be required to
meet the same tests of financial strength as the domestic issuers approved for
the Money Market Series.
KIEWIT GOVERNMENT MONEY MARKET PORTFOLIO
The Kiewit Government Money Market Portfolio pursues its investment
objective by investing all of its assets in the Government Money Market Series
of the Trust (the "Government Money Market Series"). The investment objective of
the Government Money Market Series is to provide as high a level of current
income as is consistent with maintaining a stable share by investing in
securities issued by the U.S. Government, its agencies or instrumentalities. The
Series invests in U.S. dollar-denominated money market instruments that mature
in 13 months or less and will maintain an average weighted maturity of 60 days
or less.
The Series will invest in the following money market obligations issued
by the U.S. government, its agencies or instrumentalities:
(1) United States Treasury obligations including bills, notes, bonds and
other debt obligations issued by the United States Treasury. These
securities are backed by the full faith and credit of the United States
government.
(2) Obligations of agencies and instrumentalities of the U.S. Government
which are supported by the full faith and credit of the U.S.
Government, such as securities of the Government National Mortgage
Association, or which are supported by the right of the issuer to
borrow from the U.S. Treasury, such as securities issued by the Federal
Financing Bank; or which are supported by the credit of the agency or
instrumentality itself, such as securities of Federal Farm Credit
Banks.
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(3) Repurchase agreements that are fully collateralized by the securities
listed in (1) and (2) above.
The Series intends to maintain an AAAm credit rating from Standard &
Poor's Rating Group. The AAAm credit rating indicates that the Series is
composed exclusively of investments that are rated AAA and/or eligible
short-term investments.
The Series may invest in repurchase agreements. A repurchase agreement
is a means of investing monies for a short period. In a repurchase agreement, a
seller--a U.S. commercial bank or recognized U.S. securities dealer--sells
securities to the Series and agrees to repurchase the securities at the Series'
cost plus interest within a specified period (normally one day). In these
transactions, the securities purchased by the Series will have a total value
equal to or in excess of the value of the repurchase agreement, and will be held
by the Series' custodian bank until repurchased. Under the 1940 Act, a
repurchase agreement is deemed to be the loan of money by the Series to the
seller, collateralized by the underlying securities.
KIEWIT INTERMEDIATE-TERM BOND PORTFOLIO
The Kiewit Intermediate-Term Bond Portfolio pursues its investment
objective by investing all of its assets in the Kiewit Intermediate-Term Bond
Series of the Trust (the "Intermediate-Term Bond Series") which has the same
investment objective and policies as the Portfolio. The investment objective of
the Intermediate-Term Bond Series is to provide as high a level of current
income as is consistent with reasonable risk. It seeks to achieve its objective
by investing substantially all of its total assets in a diversified portfolio of
the following investment grade debt securities: U.S. Treasury and U.S.
Government agency securities, mortgage-backed securities, asset-backed
securities and corporate bonds. The Intermediate-Term Bond Series may also
invest in repurchase agreements collateralized by U.S. Treasury and U.S.
Government agency securities and other short-term debt securities. Under normal
circumstances, the Intermediate-Term Bond Series will have an average effective
maturity (i.e., the market value weighted average time to repayment of
principal) of between three and ten years.
Debt securities rated by an NRSRO, in the lowest investment grade debt
category, have speculative characteristics; a change in economic conditions
could lead to a weakened capacity of the issuer to make principal and interest
payments. To the extent that the rating of a debt obligation held by the
Intermediate-Term Bond Series falls below investment grade, the
Intermediate-Term Bond Series, as soon as practicable, will dispose of the
security, unless such disposal would be detrimental to the Intermediate-Term
Bond Series in light of market conditions. See "Appendix - Description Of
Ratings."
The Intermediate-Term Bond Series may invest in both fixed and variable
or floating rate instruments. Variable and floating rate securities bear
interest at rates which
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vary with changes in specified market rates or indices, such as a Federal
Reserve composite index. The interest rate on these securities may be reset
daily, weekly, quarterly or some other reset period, and may have a floor or
ceiling on interest rate changes. There is a risk that the current interest rate
on such securities may not accurately reflect existing market interest rates.
Some of these securities carry a demand feature which permits the
Intermediate-Term Bond Series to sell them during a predetermined time period at
par value plus accrued interest. The demand feature is often backed by a credit
instrument, such as a letter of credit, or by a creditworthy insurer. The
Intermediate-Term Bond Series may rely on such instrument or the
creditworthiness of the insurer in purchasing a variable or floating rate
security.
KIEWIT EQUITY PORTFOLIO
The Kiewit Equity Portfolio pursues its investment objective by
investing all of its assets in the Kiewit Equity Series of the Trust (the
"Equity Series") which has the same investment objective and policies as the
Portfolio. The Equity Series invests primarily in a diversified portfolio of
U.S. equity securities, including common stocks, preferred stocks and securities
convertible into common stock of medium and large capitalization companies.
Dividend income is an incidental consideration compared to growth in capital. In
selecting securities for the Equity Series, the Manager seeks stocks that
possess strong growth and value characteristics. The Manager evaluates factors
it believes are likely to affect long-term capital appreciation such as the
issuer's background, industry position, historical returns on equity and
experience and qualifications of the management team. The Manager may rotate the
Equity Series' holdings among various market sectors based on economic analysis
of the overall business cycle. Under normal conditions, at least 65 percent of
the Equity Series' net assets will be invested in equity securities.
The Equity Series invests in equity securities only if they are listed
on registered exchanges or actively traded in the over-the-counter market. Under
normal circumstances the Equity Series, to the extent not invested in the
securities described above, may invest in investment grade securities issued by
corporations and U.S. Government securities. In order to meet liquidity needs,
the Equity Series may hold cash reserves and invest in money market instruments
(including securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, repurchase agreements, certificates of deposit and
bankers' acceptances issued by banks or savings and loan associations, and
commercial paper) rated at time of purchase in the top two categories by an
NRSRO or determined to be of comparable quality by the Manager at the time of
purchase.
The Equity Series may also purchase and sell American Depository
Receipts ("ADRs"). ADRs are receipts typically issued by a U.S. bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. Generally, ADRs in registered form are designed for use in the U.S.
securities markets. The Equity
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Series may invest in ADRs through "sponsored" or "unsponsored" facilities. A
sponsored facility is established jointly by the issuer of the underlying
security and a depository, whereas a depository may establish an unsponsored
facility without participation of the issuer of the deposited security. The
Series does not consider any ADR purchase to be foreign. Holders of unsponsored
ADRs generally bear all the costs of such facilities and the depository of an
unsponsored facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect of the
deposited securities. Therefore, there may not be a correlation between
information concerning the issuer of the security and the market value of an
unsponsored ADR.
The Equity Series may invest in convertible securities issued by U.S.
companies. Convertible debentures include corporate bonds and notes that may be
converted into or exchanged for common stock. These securities are generally
convertible either at a stated price or a stated rate (that is, for a specific
number of shares of common stock or other security). As with other fixed income
securities, the price of a convertible debenture to some extent varies inversely
with interest rates. While providing a fixed-income stream, a convertible
debenture also affords the investor an opportunity, through its conversion
feature, to participate in the capital appreciation of the common stock into
which it is convertible. Common stock acquired by the Equity Series upon
conversion of a convertible debenture will generally be held for so long as the
Manager anticipates such stock will provide the Series with opportunities which
are consistent with the Series' investment objective and policies.
For temporary defensive purposes when the Manager determines that
market conditions warrant, the Equity Series may invest up to 100% of its assets
in the money market instruments described above and other short-term debt
instruments that are rated, at the time of purchase, investment grade, and may
hold a portion of its assets in cash.
OTHER INVESTMENT POLICIES
OTHER REGISTERED INVESTMENT COMPANIES. Each Portfolio's corresponding
Series reserves the right to invest in the shares of other registered investment
companies. By investing in shares of investment companies, a Series would
indirectly pay a portion of the operating expenses, management expenses and
brokerage costs of such companies as well as the expense of operating the
Series. Thus, the Series' investors may pay higher total operating expenses and
other costs than they might pay by owning the underlying investment companies
directly. The Manager will attempt to identify investment companies that have
demonstrated superior management in the past, thus possibly offsetting these
factors by producing better results and/or lower expenses than other investment
companies with similar investment objectives and policies. There can be no
assurance that this result will be achieved. However, the Manager will waive its
advisory fee with respect to the assets of a Series invested in other investment
companies, to the
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extent of the advisory fee charged by any investment adviser to such investment
company. In addition, the 1940 Act limits investment by a Series in shares of
other investment companies to no more than 10% of the value of the Series' total
assets.
SECURITIES LOANS. Each Series may lend securities to qualified brokers,
dealers, banks and other financial institutions for the purpose of earning
additional income. While a Series may earn additional income from lending
securities, such activity is incidental to the investment objective of a Series.
The value of securities loaned may not exceed 33 1/3% of the value of a Series'
total assets. In connection with such loans, a Series will receive collateral
consisting of cash or U.S. Government securities, which will be maintained at
all times in an amount equal to at least 100% of the current market value of the
loaned securities. In addition, the Series will be able to terminate the loan at
any time, will retain the authority to vote the loaned securities and will
receive reasonable interest on the loan, as well as amounts equal to any
dividends, interest or other distributions on the loaned securities. In the
event of the bankruptcy of the borrower, the Fund could experience delay in
recovering the loaned securities. Management believes that this risk can be
controlled through careful monitoring procedures.
REVERSE REPURCHASE AGREEMENTS. A Series may enter into reverse
repurchase agreements with banks and broker-dealers. Reverse repurchase
agreements involve sales by a Series of its assets concurrently with an
agreement by the Series to repurchase the same assets at a later date at a fixed
price. A Series will establish a segregated account with its custodian bank in
which it will maintain cash or liquid securities equal in value to its
obligations with respect to reverse repurchase agreements.
OPTIONS. The Kiewit Intermediate-Term Bond Series and Kiewit Equity
Series each may sell and/or purchase exchange-traded call options and purchase
exchange-traded put options on securities in the Portfolio. Options will be used
to generate income and to protect against price changes and will not be engaged
in for speculative purposes. The aggregate value of option positions may not
exceed 10% of each Series' net assets as of the time the Series enters into such
options.
A put option gives the purchaser of the option the right to sell, and
the writer the obligation to buy, the underlying security at any time during the
option period. A call option gives the purchaser of the option the right to buy,
and the writer of the option the obligation to sell, the underlying security at
any time during the option period. The premium paid to the writer is the
consideration for undertaking the obligations under the option contract. There
are risks associated with option transactions including the following: (i) the
success of an options strategy may depend on the ability of the Manager to
predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be an imperfect
correlation between the changes in market value of the securities held by a
Series and the prices of options; (iii) there may not be a liquid secondary
market for options; and (iv) while a Series will
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receive a premium when it writes covered call options, it may not participate
fully in a rise in the market value of the underlying security.
RISK FACTORS
Each Series has reserved the right to borrow amounts not exceeding 33%
of its net assets for the purposes of making redemption payments. When
advantageous opportunities to do so exist, a Series may also borrow amounts not
exceeding 5% of the value of the Series' net assets for the purpose of
purchasing securities. Such purchases can be considered to result in
"leveraging," and in such circumstances, the net asset value of the Series may
increase or decrease at a greater rate than would be the case if the Series had
not leveraged. A Series would incur interest on the amount borrowed and if the
appreciation and income produced by the investments purchased when the Series
has borrowed are less than the cost of borrowing, the investment performance of
the Series may be further reduced as a result of leveraging.
In addition, each Series may invest in repurchase agreements and
reverse repurchase agreements. The use of repurchase agreements involves certain
risks. For example, if the seller of the agreement defaults on its obligation to
repurchase the underlying securities at a time when the value of these
securities has declined, a Series may incur a loss upon disposition of them. If
the seller of the agreement becomes insolvent and subject to liquidation or
reorganization under the bankruptcy code or other laws, a bankruptcy court may
determine that the underlying securities are collateral not within the control
of the Series and therefore subject to sale by the trustee in bankruptcy.
Finally, it is possible that a Series may not be able to substantiate its
interest in the underlying securities. While the Fund's management acknowledges
these risks, it is expected that they can be controlled through stringent
security selection and careful monitoring. Reverse repurchase agreements involve
the risk that the market value of the securities retained by the Series may
decline below the price of the securities the Series has sold but is obligated
to repurchase under the agreement. In the event the buyer of securities under a
reverse repurchase agreement files for bankruptcy or become insolvent, the
Series' use of the proceeds of the agreement may be restricted pending a
determination by the other party, or its trustee or receiver, whether to enforce
the Series' obligation to repurchase the securities. Reverse repurchase
agreements are considered borrowings by the Series and as such are subject to
the investment limitations discussed above.
The mortgage-backed and asset-backed securities in which the Kiewit
Intermediate-Term Bond Series may invest differ from conventional bonds in that
principal is paid back over the life of the security rather than at maturity. As
a result, the holder of those types of securities (the Series) receives monthly
scheduled payments of principal and interest, and may receive unscheduled
principal payments representing prepayments on the underlying mortgages or
assets. Such prepayments occur more
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frequently during periods of declining interest rates. When the holder reinvests
the payments and any unscheduled prepayments of principal it receives, it may
receive a rate of interest which is lower than the rate on the existing
mortgage-backed and asset-backed securities. For this reason, these securities
may be less effective than other types of securities as a means of "locking in"
long-term interest rates.
The market value of mortgage securities, like other debt securities,
generally varies inversely with changes in market interest rates, declining when
interest rates rise and rising when interest rates decline. However, mortgage
securities, due to changes in the rates of prepayments on the underlying
mortgages, may experience less capital appreciation in declining interest rate
environments and greater capital losses in periods of increasing interest rates
than other investments of comparable maturities.
In addition, to the extent mortgage securities are purchased at a
premium, mortgage foreclosures and unscheduled principal prepayments may result
in some loss of the holders' principal investment to the extent of the premium
paid. On the other hand, if mortgage securities are purchased at a discount,
both a scheduled payment of principal and an unscheduled prepayment of principal
increases current and total returns and accelerates the recognition of income
which, when distributed to shareholders, is taxable as ordinary income.
The Fund is actively assessing how the Year 2000 computer problem may
affect its operations and financial conditions. The third-party providers
servicing the Fund, such as its investment adviser, custodian, administrator,
and transfer agent are still conducting their review of their Year 2000
preparedness. The Fund could suffer adverse affects from the Year 2000 computer
problem if such service providers have not adapted their computer systems to
handle this problem. Therefore, the Fund's Board of Trustees has requested to be
kept up to date by the service providers on their progress towards becoming Year
2000 compliant. The Fund anticipates having all necessary information to
complete its Year 2000 assessment by December 1998; at which point the Fund will
take any necessary actions to minimize the impact of the Year 2000 problem.
MANAGEMENT OF THE FUND
The Fund was organized as a Delaware business trust. Under Delaware law
the Fund's Board of Trustees is responsible for establishing Fund policies and
for overseeing the management of the Fund.
Each of the Trustees and officers of the Fund is also a Trustee and
officer of the Trust. Information as to the Trustees and Officers of the Fund
and the Trust is set forth in the Statement of Additional Information under
"Trustees and Officers."
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Effective October __, 1998, Wilmington Trust Company (the "Manager")
became the new investment adviser of each Series of the Trust. The Manager
purchased substantially all of the assets of the Trust's former adviser, Kiewit
Investment Management Corp. ("KIM"), and succeeded as the adviser to the Trust's
Series with the consent of holders of a majority of each Series' shares. The
Manager, with principal offices located at 1100 North Market Street, Wilmington,
Delaware, 19890, is a wholly-owned subsidiary of Wilmington Trust Corporation, a
publicly held bank-holding company.
Under the Advisory Agreements with the Trust, the Manager, subject to
the supervision of the Board of Trustees, directs the investments of each Series
in accordance with its investment objective, policies and limitations. The
Manager is engaged in a variety of investment advisory activities, including the
management of other mutual funds and collective investment pools.
The Manager provides the Trust with records concerning the Manager's
activities which the Trust is required to maintain and renders regular reports
to the Trust's officers and the Board of Trustees. The Manager also selects
brokers and dealers to effect security transactions. Pursuant to an investment
management agreement between the Manager and the Trust on behalf of each Series,
the Manager is entitled to a fee, which is calculated daily and paid monthly at
an annual rate of .20% of the average daily net assets of the Kiewit Money
Market Series; .20% of the average daily net assets of the Kiewit Government
Money Market Series; .40% of the average daily net assets of the Kiewit
Intermediate-Term Series; and .70% of the average daily net assets of the Kiewit
Equity Series. The Manager has agreed to waive all or a portion of its advisory
fee and assume certain Fund expenses in order to limit the Portfolios' annual
operating expenses (see "Expense Table").
E. Mathew Brown is responsible for the day-to-day management of the
Equity Series of the Trust. Mr. Brown joined the Manager in October of 1996.
Prior to joining the Manager, he served as Chief Investment Officer of PNC Bank,
Delaware from 1993 through 1996 and as Investment Division Manager for Delaware
Trust Capital Management from 1990 through 1993.
Eric K. Cheung, Vice President and Manager of the Fixed Income Division
of the Manager, is responsible for the day-to-day management of the
Intermediate-Term Bond Series of the Trust. From 1978 through 1986, Mr. Cheung
was the Portfolio Manager for fixed income assets of the Meritor Financial
Group. In 1986, Mr. Cheung joined the Manager, and in 1991, he became the
Division Manager for all fixed income products.
The Fund has entered into an Administrative Services Agreement with the
Manager, on behalf of each Feeder Portfolio. Pursuant to this agreement, the
Manager performs various services, including: supervision of the services
provided by the
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Portfolio's custodian and transfer and dividend disbursing agent and others who
provide services to the Fund for the benefit of the Portfolio; providing
shareholders with information about the Portfolio and their investments as they
or the Fund may request; assisting the Portfolio in conducting meetings of
shareholders; furnishing information as the Board of Trustees may require
regarding the corresponding Series; and any other administrative services for
the benefit of the Portfolio as the Board of Trustees may reasonably request.
For its services, each Feeder Portfolio pays the Manager a monthly fee equal to
one-twelfth of .02% of the Portfolio's average net assets.
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENTS. Under separate
Administration Agreements and Accounting Services Agreements with the Trust and
the Fund, PFPC Inc. ("PFPC"), 400 Bellevue Parkway, Wilmington, DE 19809,
serves, respectively, as Administrator and Accounting Services Agent for the
Trust and the Fund. In these joint capacities, PFPC manages and administers all
regular day-to-day operations (other than management of the Trust's investments)
of each of the Trust's various Series and each of the Fund's various Portfolios,
subject to the supervision of the Trust's and the Fund's respective Boards of
Trustees. Pursuant to its respective agreements with PFPC, the Trust has agreed
to pay PFPC, on behalf of each Trust Series, the Series' proportionate share of
a complex-wide annual: (a) administration services charge of 0.015% of the
Trust's aggregate total assets in excess of $125 million; and (b) accounting
services charge of 0.015% of the Trust's aggregate total assets in excess of
$100 million. The foregoing PFPC annual asset-based fees are determined on an
average daily total asset basis, and are subject to prescribed fixed minimums.
TRANSFER AGENCY AGREEMENT. PFPC serves as Transfer Agent and Dividend
Paying Agent for each Portfolio of the Fund pursuant to a Transfer Agency
Agreement with the Fund.
INVESTMENT MANAGEMENT EXPENSES. The Fund and the Trust each bears all
of its own costs and expenses, including: services of its independent
accountants, legal counsel, brokerage fees, commissions and transfer taxes in
connection with the acquisition and disposition of portfolio securities, taxes,
insurance premiums, costs incidental to meetings of its shareholders and
directors or trustees, the cost of filing its registration statements under the
federal securities laws and the cost of any notice filings required under state
securities laws, reports to shareholders, and transfer and dividend disbursing
agency, administrative services and custodian fees. Expenses allocable to a
particular Portfolio or Series are so allocated, and expenses which are not
allocable to a particular Portfolio or Series are borne by each Portfolio or
Series on the basis of its relative net assets.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The Portfolios seek to achieve their investment objectives by investing
all of their investable assets in a corresponding Series of shares of the Trust.
Each Series is classified
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as a partnership for U.S. federal income tax purposes. A Portfolio is allocated
its proportionate share of the income and realized and unrealized gains and
losses of its corresponding Series.
Each Portfolio of the Fund is treated as a separate entity for federal
income tax purposes. Each Portfolio intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As such, each Portfolio will not be subject to federal
income tax, or to any excise tax, to the extent its earnings are distributed as
provided in the Code and by satisfying certain other requirements relating to
the sources of its income and diversification of its assets.
Dividends paid by a Portfolio with respect to its K Class Shares and S
Class Shares are calculated in the same manner and at the same time. Both K
Class Shares and S Class Shares of a Portfolio will share proportionally in the
investment income and expenses of the Portfolio, except that the per share
dividends of S Class Shares will ordinarily be lower than the per share
dividends of K Class Shares as a result of the distribution expenses charged to
S Class Shares.
Dividends consisting of substantially all of the ordinary income of
each Portfolio, except the Kiewit Equity Portfolio, are declared daily and are
payable to shareholders of record at the time of declaration. Such dividends are
paid on the first business day of each month. Net capital gains distributions,
if any, will be made annually. The Fund's policy is to distribute substantially
all net investment income from the Kiewit Equity Portfolio, together with any
net realized capital gains annually.
Shareholders of the Fund will automatically receive all income
dividends and capital gains distributions in additional shares of the Portfolio
whose shares they hold at net asset value (as of the business date following the
dividend record date), unless as to each Portfolio, upon written notice to the
Fund's Transfer Agent, PFPC, the shareholder selects one of the following
options: (i) Income Option -- to receive income dividends in cash and capital
gains distributions in additional shares at net asset value; (ii) Capital Gains
Option -- to receive capital gains distributions in cash and income dividends in
additional shares at net asset value; or (iii) Cash Option -- to receive both
income dividends and capital gains distributions in cash. If a shareholder has
elected to receive dividends and/or capital gain distributions in cash and the
postal or other delivery service is unable to deliver checks to the
shareholder's address of record, such shareholder's distribution option will
automatically be converted to having all dividends and other distributions
reinvested in additional shares. No interest will accrue on amounts represented
by uncashed distribution or redemption checks.
Distributions paid by a Portfolio from long-term capital gains (which
are allocated from a Series), whether received in cash or in additional shares,
are taxable to investors as long-term capital gains, regardless of the length of
time an investor has owned shares in
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the Portfolio. The Portfolios (through the operation of the Series) do not seek
to realize any particular amount of capital gains during a year; rather,
realized gains are a byproduct of management activities. Consequently, capital
gains distributions may be expected to vary considerably from year to year.
Also, if purchases of shares in a Portfolio are made shortly before the record
date for a capital gains distribution or a dividend, a portion of the investment
will be returned as a taxable distribution.
Dividends which are declared in October, November or December to
shareholders of record in such a month but which, for operational reasons, may
not be paid to the shareholder until the following January, will be treated for
tax purposes as if paid by a Portfolio and received by the shareholder on
December 31 of the calendar year in which they are declared.
A sale or redemption of shares of a Portfolio is a taxable event and
may result in a capital gain or loss to shareholders subject to tax. Any loss
incurred on sale or exchange of a Portfolio's shares held for six months or less
will be treated as a long-term capital loss to the extent of any capital gain
dividends received with respect to such shares.
The Portfolios may be required to report to the Internal Revenue
Service ("IRS") any taxable dividend or other reportable payment (including
share redemption proceeds) and withhold 31% of any such payments made to
shareholders who have not provided a correct taxpayer identification number and
made certain required certifications. A shareholder may also be subject to
backup withholding if the IRS or a broker notifies the Fund that the number
furnished by the shareholder is incorrect or that the shareholder is subject to
backup withholding for previous under-reporting of interest or dividend income.
Shareholders of the Portfolios who are not U.S. persons for purposes of
federal income taxation, should consult with their financial or tax advisors
regarding the applicability of U.S. withholding and other taxes to distributions
received by them from the Portfolios and the application of foreign tax laws to
these distributions. Shareholders should also consult their tax advisors with
respect to the applicability of any state and local intangible property or
income taxes to their shares of the Portfolios and distributions and redemption
proceeds received from the Portfolios. Shareholders who hold shares of a
Portfolio in an employer-sponsored 401(k) or profit sharing plan, or other
tax-advantaged plan, such as an IRA, should read their plan documents with
respect to options available for receipt of dividends and federal tax treatment
of transactions involving such shares.
The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in a
Portfolio.
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<PAGE>
PURCHASE OF SHARES
After you open an account with the Fund, you may purchase K Class
Shares by (a) writing to the Fund and enclosing your check as payment or (b) by
calling (800) 254-3948 to arrange for payment by wire transfer.
TO OPEN AN ACCOUNT. Send a completed application form by regular mail
to Kiewit Mutual Fund, c/o PFPC Inc., P.O. Box 8812, Wilmington, DE 19899, or by
express mail to Kiewit Mutual Fund, c/o PFPC Inc., 400 Bellevue Parkway, Suite
108, Wilmington, DE 19809. You may request an application form by calling (800)
254-3948.
TO PURCHASE BY MAIL. Your initial purchase may be indicated on your
application. For additional purchases, you may send the Fund a simple letter or
use order forms supplied by the Fund. Please enclose your check drawn on a U.S.
bank payable to "Kiewit Mutual Fund." Please indicate the amount to be invested
in each Portfolio and your Portfolio account number.
TO PURCHASE BY WIRE TRANSFER: Please call the Fund at (800) 254-3948
for instructions and to make specific arrangements before each wire transfer.
MINIMUM INITIAL INVESTMENT. The minimum initial investment is $10,000,
but subsequent investments may be made in any amount.
PURCHASE PRICE AND TIMING. K Class Shares of each Portfolio are offered
at their net asset value next determined after a purchase order is received and
accepted. Purchase orders received by and accepted before the close of regular
trading on the New York Stock Exchange ("NYSE"), usually 4:00 p.m. Eastern time,
on any Business Day of the Fund will be priced at the net asset value per share
that is determined as of the close of regular trading on the NYSE. However,
purchase orders for shares of the Kiewit Money Market Portfolio and the Kiewit
Government Money Market Portfolio received and accepted before 2:00 p.m.,
Eastern time, on any Business Day of the Fund will be priced at the net asset
value per share that is determined at 2:00 p.m., Eastern time. (See "Valuation
Of Shares.") Purchase orders received and accepted after those daily deadlines
will be priced as of the deadline on the following Business Day of the Fund. A
"Business Day of the Fund" is any day on which the NYSE and Federal Reserve Bank
are open for business. The Fund and PDI each reserves the right to reject any
purchase order and may suspend the offering of shares of any Portfolio for a
period of time.
IN KIND PURCHASES. If accepted by the Fund, K Class Shares of each
Portfolio may be purchased in exchange for securities which are eligible for
acquisition by the Portfolio and its corresponding Series of the Trust as
described in the Statement of Additional Information. Please contact PFPC about
this purchase method.
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<PAGE>
SHAREHOLDER ACCOUNTS
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by writing the
Fund c/o PFPC, Inc., P.O. Box 8812, Wilmington, DE 19899 or calling (800)
254-3948.
SHAREHOLDER STATEMENTS. The Fund will mail a statement at least
quarterly showing all purchases, redemptions and balances in each Portfolio.
Shareholdings are expressed in terms of full and fractional shares of each
Portfolio rounded to the nearest 1/1000th of a share. In the interest of economy
and convenience, the Portfolios do not issue share certificates.
INDIVIDUAL RETIREMENT ACCOUNTS. Shares of the Portfolios may be
purchased for a tax-deferred retirement plan such as an individual retirement
account ("IRA"). For an IRA Application, call PFPC at (800) 254-3948. PNC Bank,
N.A. ("PNC") provides IRA custodial services for each shareholder account that
is established as an IRA. For these services, PNC receives an annual fee of
$10.00 per account, which fee is paid directly to PNC by the IRA shareholder. If
the fee is not paid by the date due, Portfolio shares owned by the IRA
shareholder will be redeemed automatically for purposes of making the payment.
NON-INDIVIDUAL ACCOUNTS. Corporations, partnerships, fiduciaries and
other non-individual investors may be required to furnish certain additional
documentation to make purchases, exchanges and redemptions.
MINIMUM ACCOUNT SIZE. Due to the relatively high cost of maintaining
small shareholder accounts, the Fund reserves the right to automatically close
any account with a current value of less than $5,000 by involuntarily redeeming
all shares in the account and mailing the proceeds to the shareholder.
Shareholders will be notified if their account value is less than $5,000 and
will be allowed 60 days in which to increase their account balance to $5,000 or
more to prevent the account from being closed. Reductions in value that result
solely from market activity will not trigger an involuntary redemption.
VALUATION OF SHARES
The net asset values per share of each Portfolio's K Class Shares and
shares of corresponding Series are calculated by dividing the net assets
attributable to the class, by the total outstanding shares of the stock of the
class of the Portfolio or Series. The value of the shares of each Series will
fluctuate in relation to its own investment experience. The value of the shares
of the Feeder Portfolios will fluctuate in relation to the investment experience
of the Trust Series in which such Portfolios invest. On each Business Day of the
Fund, net asset value is determined as of the close of business of the NYSE,
usually 4:00 p.m. Eastern time; except for the Kiewit Money Market Portfolio and
Kiewit Government Money Market Portfolio, which is determined at 2:00 p.m.,
Eastern time.
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<PAGE>
Securities held by the Series which are listed on a securities exchange and for
which market quotations are available are valued at the last quoted sale price
of the day or, if there is no such reported sale, at the mean between the most
recent quoted bid and asked prices. Price information on listed securities is
taken from the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
mean between the most recent bid and asked prices. The value of other assets and
securities for which no quotations are readily available (including restricted
securities) are determined in good faith at fair value in accordance with
procedures adopted by the Board of Trustees.
Money market instruments with a maturity of more than 60 days are
valued at current market value, as discussed above. Money market instruments
with a maturity of 60 days or less are valued at their amortized cost, which the
Board of Trustees has determined in good faith constitutes fair value for
purposes of complying with the 1940 Act. This valuation method will continue to
be used until such time as the Trustees determine that it does not constitute
fair value for such purposes.
The net asset value of the shares of each Portfolio, except the Kiewit
Money Market Portfolio and the Kiewit Government Money Market Portfolio, will
fluctuate in relation to its own investment experience. The Kiewit Money Market
Portfolio and Kiewit Government Money Market Portfolio will attempt to maintain
a stable net asset value of $1.00 per share.
The offering price of shares of each Portfolio is the net asset value
next determined after the purchase order is received and accepted; no sales
charge or reimbursement fee is imposed.
EXCHANGE OF SHARES
You may exchange all or a portion of your K Class Shares in a Portfolio
for K Class Shares of any other Portfolio of the Fund that currently offers its
shares to investors. A redemption of shares through an exchange will be effected
at the net asset value per share next determined after receipt by the Fund of
the request, and a purchase of shares through an exchange will be effected at
the net asset value per share next determined.
Exchange transactions will be subject to the minimum initial investment
and other requirements of the Portfolio into which the exchange is made. An
exchange may not be made if the exchange would leave a balance in a
shareholder's Portfolio account of less than $5,000.
To obtain more information about exchanges, or to place exchange
orders, contact the Fund. The Fund, on behalf of the Portfolios, reserves the
right to terminate or modify the exchange offer described here. This exchange
offer is valid only in those jurisdictions
28
<PAGE>
where the sale of the Portfolio's shares to be acquired through such exchange
may be legally made.
REDEMPTION OF SHARES
You may redeem K Class Shares by mailing instructions to the Fund or
calling the Fund at (800) 254-3948. The Fund will promptly mail you a check or
wire transfer funds to your bank, as described below.
TO REDEEM BY MAIL: You may send written instructions, with signature
guarantees, by regular mail to: Kiewit Mutual Fund, c/o PFPC Inc., P.O. Box
8812, Wilmington, DE 19899-9752, or by express mail to Kiewit Mutual Fund, c/o
PFPC Inc., 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809. The
instructions should indicate the Portfolio from which shares are to be redeemed,
the number of shares or dollar amount to be redeemed, the Portfolio account
number and the name of the person in whose name the account is registered. A
SIGNATURE AND A SIGNATURE GUARANTEE ARE REQUIRED FOR EACH PERSON IN WHOSE NAME
THE ACCOUNT IS REGISTERED. A SIGNATURE MAY BE GUARANTEED BY AN ELIGIBLE
INSTITUTION ACCEPTABLE TO THE FUND, SUCH AS A BANK, BROKER, DEALER, MUNICIPAL
SECURITIES DEALER, GOVERNMENT SECURITIES DEALER, CREDIT UNION, NATIONAL
SECURITIES EXCHANGE, REGISTERED SECURITIES ASSOCIATION, CLEARING AGENCY, OR
SAVINGS ASSOCIATION.
TO REDEEM BY TELEPHONE: IF YOU WANT TO REDEEM YOUR SHARES BY TELEPHONE
YOU MUST ELECT TO DO SO BY CHECKING THE APPROPRIATE BOX OF YOUR INITIAL
APPLICATION OR BY CALLING THE FUND AT (800) 254-3948 TO OBTAIN A SEPARATE
APPLICATION FOR TELEPHONE REDEMPTIONS. In order to redeem by telephone, you must
call the Fund Monday through Friday during normal business hours of 9 a.m. to 4
p.m., Eastern time, and indicate your name, Kiewit Mutual Fund, the Portfolio's
name, your Portfolio account number and the number of shares you wish to redeem.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine and will not be liable for any losses to a
shareholder due to unauthorized or fraudulent telephone transactions. If the
Fund, the Manager, the Transfer Agent or any of their employees fails to abide
by their procedures, the Fund may be liable to a shareholder for losses he/she
suffers from any resulting unauthorized transactions. During times of drastic
economic or market changes, the telephone redemption privilege may be difficult
to implement. In the event that you are unable to reach the Fund by telephone,
you may make a redemption request by mail.
ADDITIONAL REDEMPTION INFORMATION. You may redeem all or any part of
the value of your account on any Business Day. Redemptions are made at the net
asset value next calculated after the Fund has received and accepted your
redemption request. (See "Valuation Of Shares.") The Fund imposes no fee when
shares are redeemed.
Redemption checks are mailed on the next Business Day of the Fund
following acceptance of redemption instructions but in no event later than 7
days following such
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<PAGE>
receipt and acceptance. Amounts redeemed by wire from each Portfolio, except the
Kiewit Money Market Portfolio, are normally wired on the next business day after
acceptance of redemption instructions (if received by PFPC before the close of
regular trading on the NYSE or 2:00 p.m. Eastern time, for the Kiewit Money
Market Portfolio). In no event are redemption proceeds wired later than 7 days
following such receipt and acceptance. If the shares to be redeemed were
purchased by check, the Fund reserves the right not to make the redemption
proceeds available until it has reasonable grounds to believe that the check has
been collected (which could take up to 10 days).
Redemption proceeds exceeding $10,000 may be wired to your
predesignated bank account in any commercial bank in the United States. The
receiving bank may charge a fee for this service. Alternatively, proceeds may be
mailed to your bank or, for amounts of less than $10,000, mailed to your
Portfolio account address of record if the address has been established for a
minimum of 60 days. In order to authorize the Fund to mail redemption proceeds
to your Portfolio account address of record, complete the appropriate section of
the application for telephone redemptions or include your Portfolio account
address of record when you submit written instructions. You may change the
account which you have designated to receive amounts redeemed at any time. Any
request to change the account designated to receive redemption proceeds should
be accompanied by a guarantee of the shareholder's signature by an eligible
institution. A signature and a signature guarantee are required for each person
in whose name the account is registered. Further documentation will be required
to change the designated account when shares are held by a corporation,
partnership, fiduciary or other non-individual investor.
For more information on redemption services, call the Fund at (800)
254-3948.
REDEMPTION POLICIES. Redemption payments in cash will ordinarily be
made within seven days after receipt of the redemption request in good form.
However, the right of redemption may be suspended or the date of payment
postponed in accordance with the 1940 Act. The amount received upon redemption
may be more or less than the amount paid for the shares depending upon the
fluctuations in the market value of the assets owned by the Portfolio. If the
Board of Trustees determines that it would be detrimental to the best interests
of the remaining shareholders of any Portfolio to make a particular payment in
cash, the Fund may pay all or part of the redemption price by distributing
portfolio securities from the Portfolio of the shares being redeemed in
accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage
charges and other transaction costs selling securities that were received in
payment of redemptions.
PERFORMANCE INFORMATION
From time to time, performance information, such as yield or total return
for a Portfolio, may be quoted in advertisements or in communications to
shareholders.
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<PAGE>
Performance quotations represent past performance and should not be considered
as representative of future results. The current yield will be calculated by
dividing the net investment income earned per share during the period stated in
the advertisement (based on the average daily number of shares entitled to
receive dividends outstanding during the period) by the closing net asset value
per share on the last day of the period and annualizing the result on a
semi-annual compounded basis. A Portfolio's total return may be calculated on an
annualized and aggregate basis for various periods (which periods will be stated
in the advertisement). Average annual return reflects the average percentage
change per year in value of an investment in a Portfolio. Aggregate total return
reflects the total percentage change in value of an investment in the Portfolio
over the stated period.
The principal value of an investment in a Portfolio will fluctuate so that
an investor's shares when redeemed, may be worth more or less than the
investor's original cost. Performance will be calculated separately for K Class
and S Class Shares. The K Class Shares have different expenses from the S Class
Shares which may affect performance.
Further information about the performance of each Portfolio and Class is
included in the Fund's Annual Report to Shareholders, which may be obtained
without charge by contacting the Fund at (800) 254-3948.
GENERAL INFORMATION
The Fund issues two separate classes of shares of beneficial interest for
each Portfolio with a par value of $.01 per share. The shares of each Portfolio,
when issued and paid for in accordance with the Fund's prospectus, will be fully
paid and non-assessable shares, with equal, non-cumulative voting rights and no
preferences as to conversion, exchange, dividends, redemption or any other
feature.
The separate classes of shares each represent interests in the same
portfolio of investments, have the same rights and are identical in all
respects, except that the S Class Shares bear distribution plan expenses, and
have exclusive voting rights with respect to the Rule 12b-1 Distribution Plan
pursuant to which the distribution fee may be paid. The two classes have
different exchange privileges. See "Exchange Of Shares." The net income
attributable to S Class Shares and the dividends payable on S Class Shares will
be reduced by the amount of the distribution fees; accordingly, the net asset
value of the S Class Shares will be reduced by such amount to the extent the
Portfolio has undistributed net income.
Shareholders shall have the right to vote only (i) for removal of Trustees,
(ii) with respect to such additional matters relating to the Fund as may be
required by the applicable provisions of the 1940 Act, including Section 16(a)
thereof, and (iii) on such other matters as the Trustees may consider necessary
or desirable. In addition, the
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<PAGE>
shareholders of each Portfolio will be asked to vote on any proposal to change a
fundamental investment policy (i.e. a policy that may be changed only with the
approval of shareholders) of that Portfolio. All shares of the Fund entitled to
vote on a matter shall vote without differentiation between the separate
Portfolios on a one-vote-per-share basis; provided however, if a matter to be
voted on does not affect the interests of all Portfolios, then only the
shareholders of each affected Portfolio shall be entitled to vote on the matter.
If liquidation of the Fund should occur, shareholders would be entitled to
receive on a per Portfolio basis the assets of the particular Portfolio whose
shares they own, as well as a proportionate share of Fund assets not
attributable to any particular Portfolio then in existence. Ordinarily, the Fund
does not intend to hold annual meetings of shareholders, except as required by
the 1940 Act or other applicable law. The Fund's by-laws provide that meetings
of shareholders shall be called for the purpose of voting upon the question of
removal of one or more Trustees upon the written request of the holders of not
less than 10% of the outstanding shares.
Kiewit Investment Trust was organized as a Delaware business trust on
January 23, 1997. The Trust offers shares of its Series only to institutional
investors in private offerings. The Fund may withdraw the investment of a Feeder
Portfolio in a Series of the Trust at any time, if the Board of Trustees of the
Fund determines that it is in the best interests of the Portfolio to do so. Upon
any such withdrawal, the Board of Trustees of the Fund would consider what
action might be taken, including the investment of all of the assets of the
Portfolio in another pooled investment entity having the same investment
objective as the Portfolio or the hiring of an investment advisor to manage the
Portfolio's assets in accordance with the investment policies described above.
Whenever a Feeder Portfolio, as an investor in its corresponding Trust
Series, is asked to vote on a shareholder proposal, the Fund will hold a special
meeting of the Feeder Portfolio's shareholders to solicit their votes with
respect to the proposal. The Trustees of the Fund will then vote the Feeder
Portfolio's shares in the Series in accordance with the voting instructions
received from the Feeder Portfolio's shareholders. The Trustees of the Fund will
vote shares of the Feeder Portfolio for which they receive no voting
instructions in accordance with their best judgment.
As of September 23, 1998, Peter Kiewit Sons', Inc., a Delaware corporation
with principal offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the direct or
indirect parent of shareholders of more than 25% of the voting securities of the
Money Market Portfolio and therefore may be deemed to control that Portfolio.
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APPENDIX - DESCRIPTION OF RATINGS
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
Fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in "Aaa"
securities.
"A" - Bonds possess many favorable investment attributes and
are to be considered as upper medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of
these ratings provide questionable protection of interest and principal ("Ba"
indicates speculative elements; "B" indicates a general lack of characteristics
of desirable investment; "Caa" are of poor standing; "Ca" represents obligations
which are speculative in a high degree; and "C" represents the lowest rated
class of bonds). "Caa," "Ca" and "C" bonds may be in default.
Note: Those bonds in the Aa, A, Baa, Ba and B groups which
Moody's believes possess the strongest investment attributes are designated by
the symbols, Aa1, A1, Baa1, Ba1 and B1.
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<PAGE>
Standard & Poor's Ratings Group's ("S&P") description of its bond ratings are:
AAA--An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong
AA--An obligation rated "AA" differs from the highest rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A--An obligation rated "A" is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB--An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
BB, B, CCC, CC AND C--Debt is regarded as having significant speculative
characteristics. "BB" indicates the least degree of speculation and "C" the
highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB--Debt is less vulnerable to non-payment than other speculative issues.
However, it faces major ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitment on the obligation.
B--Debt is more vulnerable to non-payment than obligations rated "BB", but the
obligor currently has the capacity to meet its financial commitment on the
obligation. Adverse business, financial or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.
CCC--Debt is currently vulnerable to non-payment, and is dependent upon
favorable business, financial and economic conditions for the obligor to meet
its financial commitment on the obligation. In the event of adverse business,
financial or economic conditions, the obligor is not likely to have the capacity
to meet its financial commitment on the obligation.
CC--An obligation rated CC is currently highly vulnerable to non-payment.
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<PAGE>
C--The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.
PLUS (+) OR MINUS (-) - The ratings from AA through CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
COMMERCIAL PAPER RATINGS
A commercial paper rating by S&P is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days. The
following summarizes the rating categories used by S&P for commercial paper:
"A-1" - Obligations are rated in the highest category
indicating that the obligor's capacity to meet its financial commitment is
strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.
Moody's commercial paper ratings are opinions of the ability
of issuers to repay punctually senior debt obligations not having an original
maturity in excess of one year, unless explicitly noted. The following
summarizes the rating categories used by Moody's for commercial paper:
Prime-1" - Issuers (or supporting institutions) have a
superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on Funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity.
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KIEWIT MUTUAL FUND
S CLASS SHARES
PROSPECTUS
OCTOBER ___, 1998
This prospectus describes the KIEWIT MONEY MARKET PORTFOLIO, KIEWIT
GOVERNMENT MONEY MARKET PORTFOLIO, KIEWIT INTERMEDIATE-TERM BOND PORTFOLIO AND
THE KIEWIT EQUITY PORTFOLIO (collectively the "Portfolios" or "Feeder
Portfolios" and individually a "Portfolio"), each a series of shares issued by
Kiewit Mutual Fund (the "Fund"), 1000 Kiewit Plaza, Omaha, NE 68131-3344, (800)
254-3948. Each Portfolio is an open-end, diversified, management investment
company with two separate classes of shares: K Class Shares and S Class Shares.
Shares of each class represent equal, pro-rata interests in a Portfolio and
accrue dividends in the same manner, except that S Class Shares bear
distribution expenses payable by the Class as compensation for distribution of
the S Class shares. The securities offered in this Prospectus are S Class
Shares, which are not subject to any sales or distribution charges. Information
concerning the Fund's K Class shares may be obtained by calling the Fund at the
telephone number stated above.
The Fund has established four series of shares, each of which
represents a separate class of the Fund's shares of beneficial interest, having
its own investment objective and policies. The investment objective of the
KIEWIT MONEY MARKET PORTFOLIO and KIEWIT GOVERNMENT MONEY MARKET PORTFOLIO is to
provide high current income while maintaining a stable share price. The
investment objective of the KIEWIT INTERMEDIATE-TERM BOND PORTFOLIO is to
provide as high a level of current income as is consistent with reasonable risk.
The investment objective of the KIEWIT EQUITY PORTFOLIO is to achieve long-term
capital appreciation.
Unlike many other investment companies which directly acquire and
manage their own portfolio of securities, each Portfolio seeks to achieve its
investment objective by investing all of its investable assets in a
corresponding series of shares of Kiewit Investment Trust (the "Trust"), an
open-end, management investment company that issues series of shares
(individually and collectively, the "Series") having the same investment
objective, policies and limitations as each of the Portfolios. The investment
experience of each Feeder Portfolio will correspond directly with the investment
experience of its corresponding Series. Investors should carefully consider this
investment approach. For additional information, see "Special Information About
The Portfolios' Structure."
<PAGE>
This prospectus contains information about the Portfolios that
prospective investors should know before investing and should be read carefully
and retained for future reference. A Statement of Additional Information dated
October __, 1998 is incorporated herein by reference, has been filed with the
Securities and Exchange Commission and is available upon request, without
charge, by writing or calling the Fund at the above address or telephone number.
THE SHARES OF THE KIEWIT MONEY MARKET PORTFOLIO AND KIEWIT GOVERNMENT MONEY
MARKET PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
WHILE SUCH PORTFOLIOS WILL MAKE EVERY EFFORT TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE, THERE IS NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE
TO DO SO.
- --------------------------------------------------------------------------------
| THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND |
| EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR |
| ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A |
| CRIMINAL OFFENSE. |
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
PAGE
HIGHLIGHTS...................................................................4
EXPENSE TABLE................................................................7
FINANCIAL HIGHLIGHTS.........................................................8
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE..........................9
INVESTMENT OBJECTIVES AND POLICIES..........................................10
Kiewit Money Market Portfolio......................................10
Kiewit Government Money Market Portfolio...........................12
Kiewit Intermediate-Term Bond Portfolio............................13
Kiewit Equity Portfolio............................................14
Other Investment Policies..........................................15
RISK FACTORS................................................................17
MANAGEMENT OF THE FUND......................................................18
DISTRIBUTION PLAN...........................................................21
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES............................21
PURCHASE OF SHARES..........................................................23
SHAREHOLDER ACCOUNTS........................................................24
VALUATION OF SHARES.........................................................25
EXCHANGE OF SHARES..........................................................26
REDEMPTION OF SHARES........................................................26
PERFORMANCE INFORMATION.....................................................28
GENERAL INFORMATION.........................................................29
APPENDIX - DESCRIPTION OF RATINGS...........................................31
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HIGHLIGHTS
THE FUND
The Fund is an open-end, diversified management investment company
commonly known as a "mutual fund." The Fund was organized as a Delaware business
trust on June 1, 1994 and is registered under the Investment Company Act of
1940, as amended (the "1940" Act). The Fund has established four series of
shares: Kiewit Money Market Portfolio, Kiewit Government Money Market Portfolio,
Kiewit Intermediate-Term Bond Portfolio and Kiewit Equity Portfolio. Each
Portfolio offers two classes of shares, K Class Shares and S Class Shares.
INVESTMENT OBJECTIVES
The investment objective of the Portfolios described in this prospectus
is to provide investors with:
Money Market High current income, while maintaining a stable
share price. The Money Market Portfolio will invest
all of its assets in the Money Market Series of the
Trust, which in turn invests in short-term money
market securities.
Government Money Market High current income, while maintaining a stable
share price and a credit rating in the highest
category for money market funds as determined by an
independent rating agency. The Government Money Market
Portfolio will invest all of its assets in the
Government Money Market Series of the Trust, which in
turn invests in securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
Intermediate-Term Bond High level of current income, consistent with
reasonable risk. The Portfolio will invest all of its
assets in the Kiewit Intermediate-Term Bond Series of
the Trust, which in turn invests in investment grade
securities.
Equity Long term capital appreciation. The Portfolio will
invest all of its assets in the Kiewit Equity Series
of the Trust, which in turn invests in a diverse
portfolio of U.S. equity securities medium and large
capitalization companies.
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Although the investment objective of each Portfolio is not fundamental and may
be changed by the Board of Trustees without shareholder approval, the Fund
intends to notify shareholders before making any material change. Due to the
inherent risks of securities investments, there can be no assurance that a
Portfolio will achieve its objective. See "Investment Objectives And Policies."
HOW TO PURCHASE SHARES
After you open an account, you may purchase S Class Shares by (a)
writing the Fund and enclosing your check as payment or (b) by calling the Fund
at (800) 254-3948 to arrange for payment by wire transfer. You may open an
account by mailing a completed application form to the Fund. The public offering
price of the shares of each Portfolio is the net asset value per share next
determined after acceptance of the purchase order and payment. The S Class
Shares may be purchased without a sales load or exchange fee, but are subject to
a distribution fee under a Rule 12b-1 plan. See "Purchase Of Shares."
HOW TO REDEEM SHARES
You may redeem S Class Shares by mailing written instructions to the
Fund or by calling the Fund at (800) 254-3948 (if you requested telephone
redemption privileges on an application form). Shares will be redeemed at the
net asset value per share next determined after acceptance of a redemption
request. The Fund will promptly mail you a check, unless other arrangements have
been made. See "Redemption Of Shares."
DIVIDEND REINVESTMENT
Each Portfolio, except the Kiewit Equity Portfolio, intends to pay
monthly dividends from its net investment income and will pay net capital gains,
if any, annually. The Kiewit Equity Portfolio intends to pay annual dividends
from net investment income, together with any capital gains.
You may choose to receive dividends and capital gains distributions in
cash or you may choose to automatically reinvest them in additional shares of
the Portfolio. See "Dividends, Capital Gains Distributions And Taxes."
INVESTMENT MANAGER, UNDERWRITER AND SERVICING AGENTS
Wilmington Trust Company (the "Manager") serves as the investment
manager of each Series of the Trust and also provides the Portfolios with
certain administrative services. Effective October __, 1998, Wilmington Trust
Company replaced Kiewit Investment Management Corp. as the Series' investment
manager. See "Management Of The Fund." Provident Distributors, Inc. serves as
the Portfolios' underwriter. PNC Bank,
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N.A. serves as the custodian of the Portfolios' assets and PFPC Inc. serves as
the Portfolios' administrator, transfer agent and accounting services agent.
RISK FACTORS
Each Portfolio, through its investment in a corresponding Series of the
Trust, is subject to certain risks. Investors should consider a number of
factors: (i) each Series of the Trust invests in securities that fluctuate in
value, and there can be no assurance that the objective of any Portfolio will be
achieved; (ii) each Series of the Trust may invest in repurchase and reverse
repurchase agreements, which involve the risk of loss if the counterparty
defaults on its obligations under the agreement; and (iii) each Series of the
Trust has reserved the right to borrow amounts not exceeding 33% of its net
assets; and (iv) the Kiewit Intermediate Term Bond Series may invest in mortgage
securities, whose market values may vary with changes in market interest rates
to a greater or a lesser extent than the market values of other debt securities.
Additionally, the policy of the Portfolios to invest in the corresponding Series
of the Trust also involves certain risks. See "Risk Factors."
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EXPENSE TABLE
SHAREHOLDER TRANSACTION COSTS None
ESTIMATED ANNUAL PORTFOLIO OPERATING EXPENSES OF S CLASS SHARES
(as a percentage of average net assets)
Government
Money Money Intermediate-
Market Market Term Bond Equity
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
Management Fees 0.09% 0.09% 0.32% 0.57%
(after fee waiver) (1)
12b-1 Fees* 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.11% 0.11% 0.18% 0.23%
(after expenses assumed) ----- ----- ----- -----
Total Portfolio 0.45% 0.45% 0.75% 1.05%
Operating Expenses (2)
*Long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by rules of the National Association of
Securities Dealers, Inc.
(1) The information in the Expense Table has been estimated to reflect changes
in the amounts of management fees waived and Fund expenses assumed. The table
summarizes the estimated aggregate annual operating expenses of both the
Portfolios' S Class Shares and the respective Series of the Trust in which the
Portfolios invest. (See "Management Of The Fund" for a description of Portfolio
and Series expenses.) Wilmington Trust Company has agreed to waive all or a
portion of its advisory fee and to assume certain expenses in order to limit
annual operating expenses of the S Class Shares for the current fiscal year.
Absent such waiver, the advisory fees would be 0.20% for the Money Market
Series; 0.20% for the Government Money Market Series; 0.40% for the
Intermediate-Term Series; and 0.70% for the Equity Series.
(2) Absent fee waivers by the Series' previous investment adviser, Kiewit
Investment Management Corp., the total operating expenses of each Portfolio's S
Class Shares for the fiscal year ended June 30, 1998, are estimated to have
been: Money Market Portfolio 0.56%; Government Money Market Portfolio 0.56%;
Intermediate-Term Bond Portfolio 0.83%; and Equity Portfolio 1.18%.
The above figures reflect estimated annualized operating expenses of each Feeder
Portfolio's S Class Shares and its corresponding Series for the fiscal year
ended June 30, 1998.
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EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming a
5% annual return and redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Money Market Portfolio $5 $14 n/a n/a
Government Money Market
Portfolio $5 $14 n/a n/a
Kiewit Intermediate -Term Bond
Portfolio $8 $24 n/a n/a
Kiewit Equity Portfolio $11 $33 n/a n/a
The purpose of the above Expense Table and Example is to assist
investors in understanding the various costs and expenses that an investor in
the Portfolios' S Class Shares will bear directly or indirectly. The information
set forth above relates only to the Portfolios' S Class Shares, which shares are
subject to different total fees and expenses than K Class Shares.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. The above
Example is based on the Portfolio's actual expenses for the most recent fiscal.
The Board of Trustees of the Fund has considered whether such expenses
will be more or less than they would be if the Feeder Portfolios invest directly
in the securities held by the Trust Series. The aggregate amount of expenses for
a Feeder Portfolio and its corresponding Trust Series may be greater than if the
Portfolio were to invest directly in the securities held by the corresponding
Trust Series. However, the total expense ratios for the Feeder Portfolios and
the Trust Series are expected to be less over time than such ratios would have
been if the Portfolios had continued to invest directly in the underlying
securities. This is because this arrangement enables various institutional
investors, including the Feeder Portfolios, to pool their assets, which may be
expected to result in economies by spreading certain fixed costs over a larger
asset base. Each shareholder in a Trust Series, including a Feeder Portfolio,
will pay its proportionate share of the expenses of that Trust Series.
FINANCIAL HIGHLIGHTS
Financial highlights for the Portfolios' S Class Shares are not
provided because the Portfolios had not commenced selling S Class Shares as of
the date of this prospectus.
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SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE
Each of the four Portfolios of the Fund, unlike many other investment
companies which directly acquire and manage their own portfolio of securities,
seeks to achieve its investment objective by investing all of its investable
assets in a corresponding Series of the Trust, an open-end, management
investment company, registered under the 1940 Act, that issues Series having the
same investment objective as each of the Portfolios. The investment objectives
of the Portfolios and their corresponding Series may be changed without
shareholder approval. Shareholders of a Feeder Portfolio will receive written
notice at least 30 days prior to the effective date of any change in the
investment objective of the Portfolio or its corresponding Trust Series.
This prospectus describes the investment objective, policies and
restrictions of each Feeder Portfolio and its corresponding Series. (See
"Portfolio Characteristics And Policies - Kiewit Money Market Portfolio, Kiewit
Government Money Market Portfolio, Kiewit Intermediate-Term Bond Portfolio and
Kiewit Equity Portfolio.") In addition, an investor should read "Management Of
The Fund" for a description of the management and other expenses associated with
the Feeder Portfolios' investment in the Trust. Other institutional investors,
including other mutual funds, may invest in each Series, and the expenses of
such other funds and, correspondingly, their returns may differ from those of
the Portfolios. Please contact the Fund c/o PFPC, Inc., P.O. Box 8812,
Wilmington, Delaware 19899, 1-800-254-3948 for information about the
availability of investing in a Series of the Trust other than through a Feeder
Portfolio.
The shares of the Trust Series will be offered to institutional
investors for the purpose of increasing the funds available for investment, to
reduce expenses as a percentage of total assets and to achieve other economies
that might be available at higher asset levels. While investment in a Series by
other institutional investors offers potential benefits to the Series and,
through their investment in the Series, the Feeder Portfolios also,
institutional investment in the Series also entails the risk that economies and
expense reductions might not be achieved, and additional investment
opportunities, such as increased diversification, might not be available if
other institutions do not invest in the Series. Also, if an institutional
investor were to redeem its interest in a Series, the remaining investors in
that Series could experience higher pro rata operating expenses, thereby
producing lower returns, and the Series' security holdings may become less
diverse, resulting in increased risk. Institutional investors that have a
greater pro rata ownership interest in a Series than the corresponding Feeder
Portfolio could have effective voting control over the operation of the Series.
Further, if a Series changes its investment objective in a manner which
is inconsistent with the investment objective of a corresponding Feeder
Portfolio and the Portfolio does not make a similar change in its investment
objective, the Portfolio would be forced to withdraw its investment in the
Series and either seek to invest its assets in
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another registered investment company with the same investment objective as the
Portfolio, which might not be possible, or retain an investment advisor to
manage the Portfolio's assets in accordance with its own investment objective,
possibly at increased cost. A withdrawal by a Feeder Portfolio of its investment
in the corresponding Series could result in a distribution in kind of portfolio
securities (as opposed to a cash distribution) to the Portfolio. Should such a
distribution occur, the Portfolio could incur brokerage fees or other
transaction costs in converting such securities to cash in order to pay
redemptions. In addition, a distribution in kind to the Portfolio could result
in a less diversified portfolio of investments and could affect adversely the
liquidity of the Portfolio. Moreover, a distribution in kind may constitute a
taxable exchange for federal income tax purposes resulting in gain or loss to
the Feeder Portfolios. Any net capital gains so realized will be distributed to
such a Portfolio's shareholders as described in "Dividends, Capital Gains
Distributions And Taxes" below.
Finally, the Feeder Portfolios' investment in the shares of a
registered investment company such as the Trust is relatively new and results in
certain operational and other complexities. However, management believes that
the benefits to be gained by shareholders outweigh the additional complexities
and that the risks attendant to such investment are not inherently different
from the risks of direct investment in securities of the type in which the Trust
Series invest.
INVESTMENT OBJECTIVES AND POLICIES
KIEWIT MONEY MARKET PORTFOLIO
The Kiewit Money Market Portfolio pursues its investment objective by
investing all of its assets in the Money Market Series of the Trust (the "Money
Market Series") which has the same investment objective and policies as the
Portfolio. The investment objective of the Money Market Series is to provide
high current income while maintaining a stable share price by investing in
short-term money market securities. The Money Market Series invests in U.S.
dollar-denominated money market instruments that mature in 13 months or less,
maintains an average weighted maturity of 90 days or less and limits its
investments to those investments which the Board of Trustees determines present
minimal credit risks.
The Money Market Series will invest in the following money market
obligations issued by financial institutions, nonfinancial corporations, and the
U.S. Government, state and municipal governments and their agencies or
instrumentalities:
(1) United States Treasury obligations including bills, notes, bonds
and other debt obligations issued by the United States Treasury. These
securities are backed by the full faith and credit of the U.S. Government.
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(2) Obligations of agencies and instrumentalities of the U.S.
Government which are supported by the full faith and credit of the U.S.
Government, such as securities of the Government National Mortgage Association,
or which are supported by the right of the issuer to borrow from the U.S.
Treasury, such as securities issued by the Federal Financing Bank; or which are
supported by the credit of the agency or instrumentality itself, such as
securities of Federal Farm Credit Banks.
(3) Repurchase agreements that are fully collateralized by the
securities listed in (1) and (2) above.
(4) Commercial paper at the time of purchase rated in the highest
category of short-term debt ratings of any two Nationally Recognized Statistical
Ratings Organization ("NRSROs") (such as Moody's Investor Services, Inc. and
Standard & Poor's Rating Services) or, if unrated, issued by a corporation
having outstanding comparable obligations that are rated in the highest category
of short-term debt ratings. See "Appendix - Description Of Ratings."
(5) Corporate obligations having a remaining maturity of 397 calendar
days or less, issued by corporations having outstanding comparable obligations
that are (a) rated in the two highest categories of any two NRSROs or (b) rated
no lower than the two highest long-term debt ratings categories by any NRSRO.
See "Appendix - Description Of Ratings."
(6) Obligations of U.S. banks, such as certificates of deposit, time
deposits and bankers' acceptances. The banks must have total assets exceeding $1
billion.
(7) Short-term Eurodollar and Yankee obligations of banks having total
assets exceeding one billion dollars. Eurodollar bank obligations are
dollar-denominated certificates of deposit or time deposits issued outside the
U.S. capital markets by foreign branches of U.S. banks or by foreign banks;
Yankee bank obligations are dollar-denominated obligations issued in the U.S.
capital markets by foreign banks.
The Money Market Series will not invest more than 5% of its total
assets in the securities of a single issuer. Up to 10% of the Money Market
Series' net assets may be invested in "restricted" and other illiquid money
market securities, which are not freely marketable under the Securities Act of
1933 (the "1933 Act").
The Money Market Series may invest in repurchase agreements. A
repurchase agreement is a means of investing monies for a short period. In a
repurchase agreement, a seller--a U.S. commercial bank or recognized U.S.
securities dealer--sells securities to the Money Market Series and agrees to
repurchase the securities at the Money Market Series' cost plus interest within
a specified period (normally one day). In these transactions, the
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securities purchased by the Money Market Series will have a total value equal to
or in excess of the value of the repurchase agreement, and will be held by the
Money Market Series' custodian bank until repurchased. Under the 1940 Act, a
repurchase agreement is deemed to be the loan of money by the Money Market
Series to the seller, collateralized by the underlying securities.
Eurodollar and Yankee obligations are subject to the same risks that
pertain to domestic issues, notably credit risk, market risk and liquidity risk.
Additionally, Eurodollar (and to a limited extent, Yankee) obligations are
subject to certain sovereign risks. One such risk is the possibility that a
foreign government might prevent dollar-denominated funds from flowing across
its borders. Other risks include: adverse political and economic developments in
a foreign country; the extent and quality of government regulation of financial
markets and institutions; the imposition of foreign withholding taxes; and
expropriation or nationalization of foreign issuers. However, Eurodollar and
Yankee obligations will undergo the same credit analysis as domestic issues in
which the Money Market Series invests, and foreign issuers will be required to
meet the same tests of financial strength as the domestic issuers approved for
the Money Market Series.
KIEWIT GOVERNMENT MONEY MARKET PORTFOLIO
The Kiewit Government Money Market Portfolio pursues its investment
objective by investing all of its assets in the Government Money Market Series
of the Trust (the "Government Money Market Series"). The investment objective of
the Government Money Market Series is to provide as high a level of current
income as is consistent with maintaining a stable share by investing in
securities issued by the U.S. Government, its agencies or instrumentalities. The
Series invests in U.S. dollar-denominated money market instruments that mature
in 13 months or less and will maintain an average weighted maturity of 60 days
or less.
The Series will invest in the following money market obligations issued
by the U.S. government, its agencies or instrumentalities:
(1) United States Treasury obligations including bills, notes, bonds and
other debt obligations issued by the United States Treasury. These
securities are backed by the full faith and credit of the United States
government.
(2) Obligations of agencies and instrumentalities of the U.S. Government
which are supported by the full faith and credit of the U.S.
Government, such as securities of the Government National Mortgage
Association, or which are supported by the right of the issuer to
borrow from the U.S. Treasury, such as securities issued by the Federal
Financing Bank; or which are supported by the credit of the agency or
instrumentality itself, such as securities of Federal Farm Credit
Banks.
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(3) Repurchase agreements that are fully collateralized by the securities
listed in (1) and (2) above.
The Series intends to maintain an AAAm credit rating from Standard &
Poor's Rating Group. The AAAm credit rating indicates that the Series is
composed exclusively of investments that are rated AAA and/or eligible
short-term investments.
The Series may invest in repurchase agreements. A repurchase agreement
is a means of investing monies for a short period. In a repurchase agreement, a
seller--a U.S. commercial bank or recognized U.S. securities dealer--sells
securities to the Series and agrees to repurchase the securities at the Series'
cost plus interest within a specified period (normally one day). In these
transactions, the securities purchased by the Series will have a total value
equal to or in excess of the value of the repurchase agreement, and will be held
by the Series' custodian bank until repurchased. Under the 1940 Act, a
repurchase agreement is deemed to be the loan of money by the Series to the
seller, collateralized by the underlying securities.
KIEWIT INTERMEDIATE-TERM BOND PORTFOLIO
The Kiewit Intermediate-Term Bond Portfolio pursues its investment
objective by investing all of its assets in the Kiewit Intermediate-Term Bond
Series of the Trust (the "Intermediate-Term Bond Series") which has the same
investment objective and policies as the Portfolio. The investment objective of
the Intermediate-Term Bond Series is to provide as high a level of current
income as is consistent with reasonable risk. It seeks to achieve its objective
by investing substantially all of its total assets in a diversified portfolio of
the following investment grade debt securities: U.S. Treasury and U.S.
Government agency securities, mortgage-backed securities, asset-backed
securities and corporate bonds. The Intermediate-Term Bond Series may also
invest in repurchase agreements collateralized by U.S. Treasury and U.S.
Government agency securities and other short-term debt securities. Under normal
circumstances, the Intermediate-Term Bond Series will have an average effective
maturity (i.e., the market value weighted average time to repayment of
principal) of between three and ten years.
Debt securities rated by an NRSRO, in the lowest investment grade debt
category, have speculative characteristics; a change in economic conditions
could lead to a weakened capacity of the issuer to make principal and interest
payments. To the extent that the rating of a debt obligation held by the
Intermediate-Term Bond Series falls below investment grade, the
Intermediate-Term Bond Series, as soon as practicable, will dispose of the
security, unless such disposal would be detrimental to the Intermediate-Term
Bond Series in light of market conditions. See "Appendix - Description Of
Ratings."
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The Intermediate-Term Bond Series may invest in both fixed and variable
or floating rate instruments. Variable and floating rate securities bear
interest at rates which vary with changes in specified market rates or indices,
such as a Federal Reserve composite index. The interest rate on these securities
may be reset daily, weekly, quarterly or some other reset period, and may have a
floor or ceiling on interest rate changes. There is a risk that the current
interest rate on such securities may not accurately reflect existing market
interest rates. Some of these securities carry a demand feature which permits
the Intermediate-Term Bond Series to sell them during a predetermined time
period at par value plus accrued interest. The demand feature is often backed by
a credit instrument, such as a letter of credit, or by a creditworthy insurer.
The Intermediate-Term Bond Series may rely on such instrument or the
creditworthiness of the insurer in purchasing a variable or floating rate
security.
KIEWIT EQUITY PORTFOLIO
The Kiewit Equity Portfolio pursues its investment objective by
investing all of its assets in the Kiewit Equity Series of the Trust (the
"Equity Series") which has the same investment objective and policies as the
Portfolio. The Equity Series invests primarily in a diversified portfolio of
U.S. equity securities, including common stocks, preferred stocks and securities
convertible into common stock, of medium and large capitalization companies.
Dividend income is an incidental consideration compared to growth in capital. In
selecting securities for the Equity Series, the Manager seeks stocks that
possess strong growth and value characteristics. The Manager evaluates factors
it believes are likely to affect long-term capital appreciation such as the
issuer's background, industry position, historical returns on equity and
experience and qualifications of the management team. The Manager may rotate the
Equity Series' holdings among various market sectors based on economic analysis
of the overall business cycle. Under normal conditions, at least 65 percent of
the Equity Series' net assets will be invested in equity securities.
The Equity Series invests in equity securities only if they are listed
on registered exchanges or actively traded in the over-the-counter market. Under
normal circumstances the Equity Series, to the extent not invested in the
securities described above, may invest in investment grade securities issued by
corporations and U.S. Government securities. In order to meet liquidity needs,
the Equity Series may hold cash reserves and invest in money market instruments
(including securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, repurchase agreements, certificates of deposit and
bankers' acceptances issued by banks or savings and loan associations, and
commercial paper) rated at time of purchase in the top two categories by an
NRSRO or determined to be of comparable quality by the Manager at the time of
purchase.
The Equity Series may also purchase and sell American Depository
Receipts ("ADRs"). ADRs are receipts typically issued by a U.S. bank or trust
company which
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evidence ownership of underlying securities issued by a foreign corporation.
Generally, ADRs in registered form are designed for use in the U.S. securities
markets. The Equity Series may invest in ADRs through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the underlying security and a depository, whereas a depository may
establish an unsponsored facility without participation of the issuer of the
deposited security. The Series does not consider any ADR purchase to be foreign.
Holders of unsponsored ADRs generally bear all the costs of such facilities and
the depository of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the deposited securities. Therefore, there may not be a correlation
between information concerning the issuer of the security and the market value
of an unsponsored ADR.
The Equity Series may invest in convertible securities issued by U.S.
companies. Convertible debentures include corporate bonds and notes that may be
converted into or exchanged for common stock. These securities are generally
convertible either at a stated price or a stated rate (that is, for a specific
number of shares of common stock or other security). As with other fixed income
securities, the price of a convertible debenture to some extent varies inversely
with interest rates. While providing a fixed-income stream, a convertible
debenture also affords the investor an opportunity, through its conversion
feature, to participate in the capital appreciation of the common stock into
which it is convertible. Common stock acquired by the Equity Series upon
conversion of a convertible debenture will generally be held for so long as the
Manager anticipates such stock will provide the Series with opportunities which
are consistent with the Series' investment objective and policies.
For temporary defensive purposes when the Manager determines that
market conditions warrant, the Equity Series may invest up to 100% of its assets
in the money market instruments described above and other short-term debt
instruments that are rated, at the time of purchase, investment grade, and may
hold a portion of its assets in cash.
OTHER INVESTMENT POLICIES
OTHER REGISTERED INVESTMENT COMPANIES. Each Portfolio's corresponding
Series reserves the right to invest in the shares of other registered investment
companies. By investing in shares of investment companies, a Series would
indirectly pay a portion of the operating expenses, management expenses and
brokerage costs of such companies as well as the expense of operating the
Series. Thus, the Series' investors may pay higher total operating expenses and
other costs than they might pay by owning the underlying investment companies
directly. The Manager will attempt to identify investment companies that have
demonstrated superior management in the past, thus possibly offsetting these
factors by producing better results and/or lower expenses than other
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investment companies with similar investment objectives and policies. There can
be no assurance that this result will be achieved. However, the Manager will
waive its advisory fee with respect to the assets of a Series invested in other
investment companies, to the extent of the advisory fee charged by any
investment adviser to such investment company. In addition, the 1940 Act limits
investment by a Series in shares of other investment companies to no more than
10% of the value of the Series' total assets.
SECURITIES LOANS. Each Series may lend securities to qualified brokers,
dealers, banks and other financial institutions for the purpose of earning
additional income. While a Series may earn additional income from lending
securities, such activity is incidental to the investment objective of a Series.
The value of securities loaned may not exceed 33 1/3% of the value of a Series'
total assets. In connection with such loans, a Series will receive collateral
consisting of cash or U.S. Government securities, which will be maintained at
all times in an amount equal to at least 100% of the current market value of the
loaned securities. In addition, the Series will be able to terminate the loan at
any time, will retain the authority to vote the loaned securities and will
receive reasonable interest on the loan, as well as amounts equal to any
dividends, interest or other distributions on the loaned securities. In the
event of the bankruptcy of the borrower, the Fund could experience delay in
recovering the loaned securities. Management believes that this risk can be
controlled through careful monitoring procedures.
REVERSE REPURCHASE AGREEMENTS. A Series may enter into reverse
repurchase agreements with banks and broker-dealers. Reverse repurchase
agreements involve sales by a Series of its assets concurrently with an
agreement by the Series to repurchase the same assets at a later date at a fixed
price. A Series will establish a segregated account with its custodian bank in
which it will maintain cash or liquid securities equal in value to its
obligations with respect to reverse repurchase agreements.
OPTIONS. The Kiewit Intermediate-Term Bond Series and Kiewit Equity
Series may sell and/or purchase exchange-traded call options and purchase
exchange-traded put options on its portfolio securities. Options will be used to
generate income and to protect against price changes and will not be engaged in
for speculative purposes. The aggregate value of option positions may not exceed
10% of each Series' net assets as of the time the Series enters into such
options.
A put option gives the purchaser of the option the right to sell, and
the writer the obligation to buy, the underlying security at any time during the
option period. A call option gives the purchaser of the option the right to buy,
and the writer of the option the obligation to sell, the underlying security at
any time during the option period. The premium paid to the writer is the
consideration for undertaking the obligations under the option contract. There
are risks associated with option transactions including the following: (i) the
success of an options strategy may depend on the ability of the Manager to
predict movements in the prices of the individual securities, fluctuations in
markets
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and movements in interest rates; (ii) there may be an imperfect correlation
between the changes in market value of the securities held by a Series and the
prices of options; (iii) there may not be a liquid secondary market for options;
and (iv) while a Series will receive a premium when it writes covered call
options, it may not participate fully in a rise in the market value of the
underlying security.
RISK FACTORS
Each Series has reserved the right to borrow amounts not exceeding 33%
of its net assets for the purposes of making redemption payments. When
advantageous opportunities to do so exist, a Series may also borrow amounts not
exceeding 5% of the value of the Series' net assets for the purpose of
purchasing securities. Such purchases can be considered to result in
"leveraging," and in such circumstances, the net asset value of the Series may
increase or decrease at a greater rate than would be the case if the Series had
not leveraged. A Series would incur interest on the amount borrowed and if the
appreciation and income produced by the investments purchased when the Series
has borrowed are less than the cost of borrowing, the investment performance of
the Series may be further reduced as a result of leveraging.
In addition, each Series may invest in repurchase agreements and
reverse repurchase agreements. The use of repurchase agreements involves certain
risks. For example, if the seller of the agreement defaults on its obligation to
repurchase the underlying securities at a time when the value of these
securities has declined, a Series may incur a loss upon disposition of them. If
the seller of the agreement becomes insolvent and subject to liquidation or
reorganization under the bankruptcy code or other laws, a bankruptcy court may
determine that the underlying securities are collateral not within the control
of the Series and therefore subject to sale by the trustee in bankruptcy.
Finally, it is possible that a Series may not be able to substantiate its
interest in the underlying securities. While the Fund's management acknowledges
these risks, it is expected that they can be controlled through stringent
security selection and careful monitoring. Reverse repurchase agreements involve
the risk that the market value of the securities retained by the Series may
decline below the price of the securities the Series has sold but is obligated
to repurchase under the agreement. In the event the buyer of securities under a
reverse repurchase agreement files for bankruptcy or become insolvent, the
Series' use of the proceeds of the agreement may be restricted pending a
determination by the other party, or its trustee or receiver, whether to enforce
the Series' obligation to repurchase the securities. Reverse repurchase
agreements are considered borrowings by the Series and as such are subject to
the investment limitations discussed above.
The mortgage-backed and asset -backed securities in which the Kiewit
Intermediate-Term Bond Series may invest differ from conventional bonds in that
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principal is paid back over the life of the security rather than at maturity. As
a result, the holder of those types of securities (the Series) receives mostly
scheduled payments of principal and interest, and may receive unscheduled
principal payments representing prepayments on the underlying mortgages or
assets. Such prepayments occur more frequently during periods of declining
interest rates. When the holder reinvests the payments and any unscheduled
prepayments of principal it receives, it may receive a rate of interest which is
lower than the rate on the existing mortgage-backed and asset-backed securities.
For this reason, these securities may be less effective than other types of
securities as a means of "locking in" long-term interest rates.
The market value of mortgage securities, like other debt securities,
generally varies inversely with changes in market interest rates, declining when
interest rates rise and rising when interest rates decline. However, mortgage
securities, due to changes in the rates of prepayments on the underlying
mortgages, may experience less capital appreciation in declining interest rate
environments and greater capital losses in periods of increasing interest rates
than other investments of comparable maturities.
In addition, to the extent mortgage securities are purchased at a
premium, mortgage foreclosures and unscheduled principal prepayments may result
in some loss of the holders' principal investment to the extent of the premium
paid. On the other hand, if mortgage securities are purchased at a discount,
both a scheduled payment of principal and an unscheduled prepayment of principal
increases current and total returns and accelerates the recognition of income
which, when distributed to shareholders, is taxable as ordinary income.
The Fund is actively assessing how the Year 2000 computer problem may
affect its operations and financial conditions. The third-party providers
servicing the Fund, such as its investment adviser, custodian, administrator,
and transfer agent are still conducting their review of their Year 2000
preparedness. The Fund could suffer adverse affects from the Year 2000 computer
problem if such service providers have not adapted their computer systems to
handle this problem. Therefore, the Fund's Board of Trustees has requested to be
kept up to date by the service providers on their progress towards becoming Year
2000 compliant. The Fund anticipates having all necessary information to
complete its Year 2000 assessment by December 1998; at which point the Fund will
take any necessary actions to minimize the impact of the Year 2000 problem.
MANAGEMENT OF THE FUND
The Fund was organized as a Delaware business trust. Under Delaware law
the Fund's Board of Trustees is responsible for establishing Fund policies and
for overseeing the management of the Fund.
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Each of the Trustees and officers of the Fund is also a Trustee and
officer of the Trust. Information as to the Trustees and Officers of the Fund
and the Trust is set forth in the Statement of Additional Information under
"Trustees and Officers."
Effective October __, 1998, Wilmington Trust Company (the "Manager")
became the new investment adviser of each Series of the Trust. The Manager
purchased substantially all of the assets of the Trust's former adviser, Kiewit
Investment Management Corp. ("KIM"), and succeeded as the adviser to the Trust's
Series with the consent of holders of a majority of each Series' shares. The
Manager, with principal offices located at 1100 North Market Street, Wilmington,
Delaware, 19890, is a wholly-owned subsidiary of Wilmington Trust Corporation, a
publicly held bank-holding company.
Under the Advisory Agreements with the Trust, the Manager, subject to
the supervision of the Board of Trustees, directs the investments of each Series
in accordance with its investment objective, policies and limitations. The
Manager is engaged in a variety of investment advisory activities, including the
management of other mutual funds and collective investment pools.
The Manager provides the Trust with records concerning the Manager's
activities which the Trust is required to maintain and renders regular reports
to the Trust's officers and the Board of Trustees. The Manager also selects
brokers and dealers to effect security transactions. Pursuant to an investment
management agreement between the Manager and the Trust on behalf of each Series,
the Manager is entitled to a fee, which is calculated daily and paid monthly at
an annual rate of .20% of the average daily net assets of the Kiewit Money
Market Series; .20% of the average daily net assets of the Kiewit Government
Money Market Series; .40% of the average daily net assets of the Kiewit
Intermediate-Term Series; and .70% of the average daily net assets of the Kiewit
Equity Series. The Manager has agreed to waive all or a portion of its advisory
fee and assume certain Fund expenses in order to limit the Portfolios' annual
operating expenses (see "Expenses Table").
E. Mathew Brown is responsible for the day-to-day management of the
Equity Series of the Trust. Mr. Brown joined the Manager in October of 1996.
Prior to joining the Manager, he served as Chief Investment Officer of PNC Bank,
Delaware from 1993 through 1996 and as Investment Division Manager for Delaware
Trust Capital Management from 1990 through 1993.
Eric K. Cheung, Vice President and Manager of the Fixed Income Division
of the Manager, is responsible for the day-to-day management of the
Intermediate-Term Bond Series of the Trust. From 1978 through 1986, Mr. Cheung
was the Portfolio Manager for fixed income assets of the Meritor Financial
Group. In 1986, Mr. Cheung joined the Manager, and in 1991, he became the
Division Manager for all fixed income products.
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The Fund has entered into an Administrative Services Agreement with the
Manager, on behalf of each Feeder Portfolio. Pursuant to this agreement, the
Manager performs various services, including: supervision of the services
provided by the Portfolio's custodian and transfer and dividend disbursing agent
and others who provide services to the Fund for the benefit of the Portfolio;
providing shareholders with information about the Portfolio and their
investments as they or the Fund may request; assisting the Portfolio in
conducting meetings of shareholders; furnishing information as the Board of
Trustees may require regarding the corresponding Series; and any other
administrative services for the benefit of the Portfolio as the Board of
Trustees may reasonably request. For its services, each Feeder Portfolio pays
the Manager a monthly fee equal to one-twelfth of .02% of the Portfolio's
average net assets.
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENTS. Under separate
Administration Agreements and Accounting Services Agreements with the Trust and
the Fund, PFPC Inc. ("PFPC"), 400 Bellevue Parkway, Wilmington, DE 19809,
serves, respectively, as Administrator and Accounting Services Agent for the
Trust and the Fund. In these joint capacities, PFPC manages and administers all
regular day-to-day operations (other than management of the Trust's investments)
of each of the Trust's various Series and each of the Fund's various Portfolios,
subject to the supervision of the Trust's and the Fund's respective Boards of
Trustees. Pursuant to its respective agreements with PFPC, the Trust has agreed
to pay PFPC, on behalf of each Trust Series, the Series' proportionate share of
a complex-wide annual: (a) administration services charge of 0.015% of the
Trust's aggregate total assets in excess of $125 million; and (b) accounting
services charge of 0.015% of the Trust's aggregate total assets in excess of
$100 million. The foregoing PFPC annual asset-based fees are determined on an
average daily total asset basis, and are subject to prescribed fixed minimums.
TRANSFER AGENCY AGREEMENT. PFPC serves as Transfer Agent and Dividend
Paying Agent for each Portfolio of the Fund pursuant to a Transfer Agency
Agreement with the Fund.
INVESTMENT MANAGEMENT EXPENSES. The Fund and the Trust each bears all
of its own costs and expenses, including: services of its independent
accountants, legal counsel, brokerage fees, commissions and transfer taxes in
connection with the acquisition and disposition of portfolio securities, taxes,
insurance premiums, costs incidental to meetings of its shareholders and
directors or trustees, the cost of filing its registration statements under the
federal securities laws and the cost of any notice filings required under state
securities laws, reports to shareholders, and transfer and dividend disbursing
agency, administrative services and custodian fees. Expenses allocable to a
particular Portfolio or Series are so allocated, and expenses which are not
allocable to a particular Portfolio or Series are borne by each Portfolio or
Series on the basis of its relative net assets.
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DISTRIBUTION PLAN
The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (the
"12b-1 Plan"), whereby it may reimburse Provident Distributors, Inc. (the"
Distributor") or others for expenses actually incurred by the Distributor or
others in the promotion and distribution of the Fund's S Class Shares. These
expenses include, but are not limited to, the printing of prospectuses and
reports used for sales purposes, the preparation of sales literature and related
expenses, advertisements, and other distribution-related expenses, including
payments to securities dealer and others participating in the sale and servicing
of S Class Shares. The maximum amount which the Fund may pay to the Distributor
and others (and which the Distributor may re-allow to securities dealers and
others participating in the sale of shares) for such distribution expenses is
0.25% per annum of average daily net assets of a Portfolio's S Class payable on
a monthly basis. All expenses of distribution and marketing in excess of 0.25%
per annum will be borne by the Adviser. The 12b-1 Plan also covers any payments
made by the Fund, the Manager, the Distributor, or other parties on behalf of
the Fund , the Adviser, the Manager, or the Distributor, to the extent such
payments are deemed to be for the financing of any activity primarily intended
to result in the sale of S Class Shares issued by the Fund within the context of
Rule 12b-1.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The Portfolios seek to achieve their investment objectives by investing
all of their investable assets in a corresponding Series of shares of Trust.
Each Series is classified as a partnership for U.S. federal income tax purposes.
A Portfolio is allocated its proportionate share of the income and realized and
unrealized gains and losses of its corresponding Series.
Each Portfolio of the Fund is treated as a separate entity for federal
income tax purposes. Each Portfolio intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As such, each Portfolio will not be subject to federal
income tax, or to any excise tax, to the extent its earnings are distributed as
provided in the Code and by satisfying certain other requirements relating to
the sources of its income and diversification of its assets.
Dividends paid by a Portfolio with respect to its K Class Shares and S
Class Shares are calculated in the same manner and at the same time. Both K
Class and S Class Shares of a Portfolio will share proportionally in the
investment income and expenses of the Portfolio, except that the per share
dividends of S Class Shares will ordinarily be lower than the per share
dividends of K Class Shares as a result of the distribution expenses charged to
S Class Shares.
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Dividends consisting of substantially all of the ordinary income of
each Portfolio, except the Kiewit Equity Portfolio, are declared daily and are
payable to shareholders of record at the time of declaration. Such dividends are
paid on the first business day of each month. Net capital gains distributions,
if any, will be made annually. The Fund's policy is to distribute substantially
all net investment income from the Kiewit Equity Portfolio, together with any
net realized capital gains annually.
Shareholders of the Fund will automatically receive all income
dividends and capital gains distributions in additional shares of the Portfolio
whose shares they hold at net asset value (as of the business date following the
dividend record date), unless as to each Portfolio, upon written notice to the
Fund's Transfer Agent, PFPC, the shareholder selects one of the following
options: (i) Income Option -- to receive income dividends in cash and capital
gains distributions in additional shares at net asset value; (ii) Capital Gains
Option -- to receive capital gains distributions in cash and income dividends in
additional shares at net asset value; or (iii) Cash Option -- to receive both
income dividends and capital gains distributions in cash. If a shareholder has
elected to receive dividends and/or capital gain distributions in cash and the
postal or other delivery service is unable to deliver checks to the
shareholder's address of record, such shareholder's distribution option will
automatically be converted to having all dividend and other distributions
reinvested in additional shares. No interest will accrue on amounts represented
by uncashed distribution or redemption checks.
Distributions paid by a Portfolio from long-term capital gains (which
are allocated from a Series), whether received in cash or in additional shares,
are taxable to investors as long-term capital gains, regardless of the length of
time an investor has owned shares in the Portfolio. The Portfolios (through the
operation of the Series) do not seek to realize any particular amount of capital
gains during a year; rather, realized gains are a byproduct of management
activities. Consequently, capital gains distributions may be expected to vary
considerably from year to year. Also, if purchases of shares in a Portfolio are
made shortly before the record date for a capital gains distribution or a
dividend, a portion of the investment will be returned as a taxable
distribution.
Dividends which are declared in October, November or December to
shareholders of record in such a month but which, for operational reasons, may
not be paid to the shareholder until the following January, will be treated for
tax purposes as if paid by a Portfolio and received by the shareholder on
December 31 of the calendar year in which they are declared.
A sale or redemption of shares of a Portfolio is a taxable event and
may result in a capital gain or loss to shareholders subject to tax. Any loss
incurred on sale or exchange of a Portfolio's shares held for six months or less
will be treated as a long-term capital loss to the extent of any capital gain
dividends received with respect to such shares.
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The Portfolios may be required to report to the Internal Revenue
Service ("IRS") any taxable dividend or other reportable payment (including
share redemption proceeds) and withhold 31% of any such payments made to
shareholders who have not provided a correct taxpayer identification number and
made certain required certifications. A shareholder may also be subject to
backup withholding if the IRS or a broker notifies the Fund that the number
furnished by the shareholder is incorrect or that the shareholder is subject to
backup withholding for previous under-reporting of interest or dividend income.
Shareholders of the Portfolios who are not U.S. persons for purposes of
federal income taxation, should consult with their financial or tax advisors
regarding the applicability of U.S. withholding and other taxes to distributions
received by them from the Portfolios and the application of foreign tax laws to
these distributions. Shareholders should also consult their tax advisors with
respect to the applicability of any state and local intangible property or
income taxes to their shares of the Portfolios and distributions and redemption
proceeds received from the Portfolios. Shareholders who hold shares of a
Portfolio in an employer-sponsored 401(k) or profit sharing plan, or other
tax-advantaged plan, such as an IRA, should read their plan documents with
respect to options available for receipt of dividends and federal tax treatment
of transactions involving such shares.
The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in a
Portfolio.
PURCHASE OF SHARES
After you open an account with the Fund, you may purchase S Class
Shares by (a) writing to the Fund and enclosing your check as payment or (b) by
calling (800) 254-3948 to arrange for payment by wire transfer.
TO OPEN AN ACCOUNT. Send a completed application form by regular mail
to Kiewit Mutual Fund, c/o PFPC Inc., P.O. Box 8812, Wilmington, DE 19899, or by
express mail to Kiewit Mutual Fund, c/o PFPC Inc., 400 Bellevue Parkway, Suite
108, Wilmington, DE 19809. You may request an application form by calling (800)
254-3948.
TO PURCHASE BY MAIL. Your initial purchase may be indicated on your
application. For additional purchases, you may send the Fund a simple letter or
use order forms supplied by the Fund. Please enclose your check drawn on a U.S.
bank payable to "Kiewit Mutual Fund." Please indicate the amount to be invested
in each Portfolio and your Portfolio account number.
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TO PURCHASE BY WIRE TRANSFER: Please call the Fund at (800) 254-3948
for instructions and to make specific arrangements before each wire transfer.
MINIMUM INITIAL INVESTMENT. The minimum initial investment is $10,000,
but subsequent investments may be made in any amount.
PURCHASE PRICE AND TIMING. S Class Shares of each Portfolio are offered
at their net asset value next determined after a purchase order is received and
accepted. Purchase orders received by and accepted before the close of regular
trading on the New York Stock Exchange ("NYSE"), usually 4:00 p.m. Eastern time,
on any Business Day of the Fund will be priced at the net asset value per share
that is determined as of the close of regular trading on the NYSE. However,
purchase orders for shares of the Kiewit Money Market Portfolio and the Kiewit
Government Money Market Portfolio received and accepted before 2:00 p.m.,
Eastern time, on any Business Day of the Fund will be priced at the net asset
value per share that is determined at 2:00 p.m., Eastern time. (See "Valuation
Of Shares.") Purchase orders received and accepted after those daily deadlines
will be priced as of the deadline on the following Business Day of the Fund. A
"Business Day of the Fund" is any day on which the NYSE and Federal Reserve Bank
are open for business. The Fund and RSD each reserves the right to reject any
purchase order and may suspend the offering of shares of any Portfolio for a
period of time.
IN KIND PURCHASES. If accepted by the Fund, S Class Shares of each
Portfolio may be purchased in exchange for securities which are eligible for
acquisition by the Portfolio and its corresponding Series of the Trust as
described in the Statement of Additional Information. Please contact PFPC about
this purchase method.
SHAREHOLDER ACCOUNTS
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by writing the
Fund at 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809 or calling (800)
254-3948.
SHAREHOLDER STATEMENTS. The Fund will mail a statement at least
quarterly showing all purchases, redemptions and balances in each Portfolio.
Shareholdings are expressed in terms of full and fractional shares of each
Portfolio rounded to the nearest 1/1000th of a share. In the interest of economy
and convenience, the Portfolios do not issue share certificates.
INDIVIDUAL RETIREMENT ACCOUNTS. Shares of the Portfolios may be
purchased for a tax-deferred retirement plan such as an individual retirement
account ("IRA"). For an IRA Application, call PFPC at (800) 254-3948. PNC Bank,
N.A. ("PNC") provides IRA custodial services for each shareholder account that
is established as an IRA. For these services, PNC receives an annual fee of
$10.00 per account, which fee is paid directly to PNC by the IRA shareholder. If
the fee is not paid by the date due, Portfolio shares
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owned by the IRA shareholder will be redeemed automatically for purposes of
making the payment.
NON-INDIVIDUAL ACCOUNTS. Corporations, partnerships, fiduciaries and
other non-individual investors may be required to furnish certain additional
documentation to make purchases, exchanges and redemptions.
MINIMUM ACCOUNT SIZE. Due to the relatively high cost of maintaining
small shareholder accounts, the Fund reserves the right to automatically close
any account with a current value of less than $5,000 by involuntarily redeeming
all shares in the account and mailing the proceeds to the shareholder.
Shareholders will be notified if their account value is less than $5,000 and
will be allowed 60 days in which to increase their account balance to $5,000 or
more to prevent the account from being closed. Reductions in value that result
solely from market activity will not trigger an involuntary redemption.
VALUATION OF SHARES
The net asset values per share of each Portfolio's S Class Shares and
shares of corresponding Series are calculated by dividing the net assets
attributable to the class, by the total outstanding shares of the stock of the
class of the Portfolio or Series. The value of the shares of each Series will
fluctuate in relation to its own investment experience. The value of the shares
of the Feeder Portfolios will fluctuate in relation to the investment experience
of the Trust Series in which such Portfolios invest. On each Business Day of the
Fund, net asset value is determined as of the close of business of the NYSE,
usually 4:00 p.m. Eastern time; except for the Kiewit Money Market Portfolio and
Kiewit Government Money Market Portfolio, which is determined at 2:00 p.m.,
Eastern time. Securities held by the Series which are listed on a securities
exchange and for which market quotations are available are valued at the last
quoted sale price of the day or, if there is no such reported sale, at the mean
between the most recent quoted bid and asked prices. Price information on listed
securities is taken from the exchange where the security is primarily traded.
Unlisted securities for which market quotations are readily available are valued
at the mean between the most recent bid and asked prices. The value of other
assets and securities for which no quotations are readily available (including
restricted securities) are determined in good faith at fair value in accordance
with procedures adopted by the Board of Trustees.
Money market instruments with a maturity of more than 60 days are
valued at current market value, as discussed above. Money market instruments
with a maturity of 60 days or less are valued at their amortized cost, which the
Board of Trustees has determined in good faith constitutes fair value for
purposes of complying with the 1940 Act. This valuation method will continue to
be used until such time as the Trustees determine that it does not constitute
fair value for such purposes.
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The net asset value of the shares of each Portfolio, except the Kiewit
Money Market Portfolio and the Kiewit Government Money Market Portfolio, will
fluctuate in relation to its own investment experience. The Kiewit Money Market
Portfolio and Kiewit Government Money Market Portfolio will attempt to maintain
a stable net asset value of $1.00 per share.
The offering price of shares of each Portfolio is the net asset value
next determined after the purchase order is received and accepted; no sales
charge or reimbursement fee is imposed.
EXCHANGE OF SHARES
You may exchange all or a portion of your S Class Shares in a Portfolio
for S Class Shares of any other Portfolio of the Fund that currently offers its
shares to investors. A redemption of shares through an exchange will be effected
at the net asset value per share next determined after receipt by the Fund of
the request, and a purchase of shares through an exchange will be effected at
the net asset value per share next determined.
Exchange transactions will be subject to the minimum initial investment
and other requirements of the Portfolio into which the exchange is made. An
exchange may not be made if the exchange would leave a balance in a
shareholder's Portfolio account of less than $5,000.
To obtain more information about exchanges, or to place exchange
orders, contact the Fund. The Fund, on behalf of the Portfolios, reserves the
right to terminate or modify the exchange offer described here. This exchange
offer is valid only in those jurisdictions where the sale of the Portfolio's
shares to be acquired through such exchange may be legally made.
REDEMPTION OF SHARES
You may redeem S Class Shares by mailing instructions to the Fund or
calling the Fund at (800) 254-3948. The Fund will promptly mail you a check or
wire transfer funds to your bank, as described below.
TO REDEEM BY MAIL: You may send written instructions, with signature
guarantees, by regular mail to: Kiewit Mutual Fund, c/o PFPC Inc., P.O. Box
8812, Wilmington, DE 19899-9752, or by express mail to Kiewit Mutual Fund, c/o
PFPC Inc., 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809. The
instructions should indicate the Portfolio from which shares are to be redeemed,
the number of shares or dollar amount to be redeemed, the Portfolio account
number and the name of the person in whose name the account is registered. A
SIGNATURE AND A SIGNATURE GUARANTEE ARE REQUIRED FOR EACH PERSON IN WHOSE NAME
THE ACCOUNT IS REGISTERED. A SIGNATURE MAY BE GUARANTEED BY AN
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ELIGIBLE INSTITUTION ACCEPTABLE TO THE FUND, SUCH AS A BANK, BROKER, DEALER,
MUNICIPAL SECURITIES DEALER, GOVERNMENT SECURITIES DEALER, CREDIT UNION,
NATIONAL SECURITIES EXCHANGE, REGISTERED SECURITIES ASSOCIATION, CLEARING
AGENCY, OR SAVINGS ASSOCIATION.
TO REDEEM BY TELEPHONE: IF YOU WANT TO REDEEM YOUR SHARES BY TELEPHONE
YOU MUST ELECT TO DO SO BY CHECKING THE APPROPRIATE BOX OF YOUR INITIAL
APPLICATION OR BY CALLING THE FUND AT (800) 254-3948 TO OBTAIN A SEPARATE
APPLICATION FOR TELEPHONE REDEMPTIONS. In order to redeem by telephone, you must
call the Fund Monday through Friday during normal business hours of 9 a.m. to 4
p.m., Eastern time, and indicate your name, Kiewit Mutual Fund, the Portfolio's
name, your Portfolio account number and the number of shares you wish to redeem.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine and will not be liable for any losses to a
shareholder due to unauthorized or fraudulent telephone transactions. If the
Fund, the Manager, the Transfer Agent or any of their employees fails to abide
by their procedures, the Fund may be liable to a shareholder for losses he/she
suffers from any resulting unauthorized transactions. During times of drastic
economic or market changes, the telephone redemption privilege may be difficult
to implement. In the event that you are unable to reach the Fund by telephone,
you may make a redemption request by mail.
ADDITIONAL REDEMPTION INFORMATION. You may redeem all or any part of
the value of your account on any Business Day. Redemptions are made at the net
asset value next calculated after the Fund has received and accepted your
redemption request. (See "Valuation Of Shares.") The Fund imposes no fee when
shares are redeemed.
Redemption checks are mailed on the next Business Day of the Fund
following acceptance of redemption instructions but in no event later than 7
days following such receipt and acceptance. Amounts redeemed by wire from each
Portfolio, except the Kiewit Money Market Portfolio, are normally wired on the
next business day after acceptance of redemption instructions (if received by
PFPC before the close of regular trading on the NYSE or 2:00 p.m. Eastern time,
for the Kiewit Money Market Portfolio). In no event are redemption proceeds
wired later than 7 days following such receipt and acceptance. If the shares to
be redeemed were purchased by check, the Fund reserves the right not to make the
redemption proceeds available until it has reasonable grounds to believe that
the check has been collected (which could take up to 10 days).
Redemption proceeds exceeding $10,000 may be wired to your
predesignated bank account in any commercial bank in the United States. The
receiving bank may charge a fee for this service. Alternatively, proceeds may be
mailed to your bank or, for amounts of less than $10,000, mailed to your
Portfolio account address of record if the address has been established for a
minimum of 60 days. In order to authorize the Fund to mail redemption proceeds
to your Portfolio account address of record, complete the appropriate section of
the application for telephone redemptions or include your Portfolio account
address of record when you submit written instructions. You may change the
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account which you have designated to receive amounts redeemed at any time. Any
request to change the account designated to receive redemption proceeds should
be accompanied by a guarantee of the shareholder's signature by an eligible
institution. A signature and a signature guarantee are required for each person
in whose name the account is registered. Further documentation will be required
to change the designated account when shares are held by a corporation,
partnership, fiduciary or other non-individual investor.
For more information on redemption services, call the Fund at (800)
254-3948.
REDEMPTION POLICIES. Redemption payments in cash will ordinarily be
made within seven days after receipt of the redemption request in good form.
However, the right of redemption may be suspended or the date of payment
postponed in accordance with the 1940 Act. The amount received upon redemption
may be more or less than the amount paid for the shares depending upon the
fluctuations in the market value of the assets owned by the Portfolio. If the
Board of Trustees determines that it would be detrimental to the best interests
of the remaining shareholders of any Portfolio to make a particular payment in
cash, the Fund may pay all or part of the redemption price by distributing
portfolio securities from the Portfolio of the shares being redeemed in
accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage
charges and other transaction costs selling securities that were received in
payment of redemptions.
PERFORMANCE INFORMATION
From time to time, performance information, such as yield or total
return for a Portfolio, may be quoted in advertisements or in communications to
shareholders. Performance quotations represent past performance and should not
be considered as representative of future results. The current yield will be
calculated by dividing the net investment income earned per share during the
period stated in the advertisement (based on the average daily number of shares
entitled to receive dividends outstanding during the period) by the closing net
asset value per share on the last day of the period and annualizing the result
on a semi-annual compounded basis. A Portfolio's total return may be calculated
on an annualized and aggregate basis for various periods (which periods will be
stated in the advertisement). Average annual return reflects the average
percentage change per year in value of an investment in a Portfolio. Aggregate
total return reflects the total percentage change in value of an investment in
the Portfolio over the stated period.
The principal value of an investment in a Portfolio will fluctuate so
that an investor's shares when redeemed, may be worth more or less than the
investor's original cost. Performance will be calculated separately for K
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<PAGE>
Class and S Class Shares. The K Class Shares have different expenses from the S
Class Shares which may affect performance.
Further information about the performance of each Portfolio and Class
is included in the Fund's Annual Report to Shareholders which may be obtained
without charge by contacting the Fund at (800) 254-3948.
GENERAL INFORMATION
The Fund issues two separate classes of shares of beneficial interest
for each Portfolio with a par value of $.01 per share. The shares of each
Portfolio, when issued and paid for in accordance with the Fund's prospectus,
will be fully paid and non-assessable shares, with equal, non-cumulative voting
rights and no preferences as to conversion, exchange, dividends, redemption or
any other feature.
The separate classes of shares each represent interests in the same
portfolio of investments, have the same rights and are identical in all
respects, except that the S Class Shares bear distribution plan expenses, and
have exclusive voting rights with respect to the Rule 12b-1 Distribution Plan
pursuant to which the distribution fee may be paid. The two classes have
different exchange privileges. See "Exchange Of Shares." The net income
attributable to S Class Shares and the dividends payable on S Class Shares will
be reduced by the amount of the distribution fees; accordingly, the net asset
value of the S Class Shares will be reduced by such amount to the extent the
Portfolio has undistributed net income.
Shareholders shall have the right to vote only (i) for removal of
Trustees, (ii) with respect to such additional matters relating to the Fund as
may be required by the applicable provisions of the 1940 Act, including Section
16(a) thereof, and (iii) on such other matters as the Trustees may consider
necessary or desirable. In addition, the shareholders of each Portfolio will be
asked to vote on any proposal to change a fundamental investment policy (i.e. a
policy that may be changed only with the approval of shareholders) of that
Portfolio. All shares of the Fund entitled to vote on a matter shall vote
without differentiation between the separate Portfolios on a one-vote-per-share
basis; provided however, if a matter to be voted on does not affect the
interests of all Portfolios, then only the shareholders of each affected
Portfolio shall be entitled to vote on the matter. If liquidation of the Fund
should occur, shareholders would be entitled to receive on a per Portfolio basis
the assets of the particular Portfolio whose shares they own, as well as a
proportionate share of Fund assets not attributable to any particular Portfolio
then in existence. Ordinarily, the Fund does not intend to hold annual meetings
of shareholders, except as required by the 1940 Act or other applicable law. The
Fund's by-laws provide that meetings of shareholders shall be called for the
purpose of voting upon the question of removal of one or more Trustees upon the
written request of the holders of not less than 10% of the outstanding shares.
29
<PAGE>
Kiewit Investment Trust was organized as a Delaware business trust on
January 23, 1997. The Trust offers shares of its Series only to institutional
investors in private offerings. The Fund may withdraw the investment of a Feeder
Portfolio in a Series of the Trust at any time, if the Board of Trustees of the
Fund determines that it is in the best interests of the Portfolio to do so. Upon
any such withdrawal, the Board of Trustees of the Fund would consider what
action might be taken, including the investment of all of the assets of the
Portfolio in another pooled investment entity having the same investment
objective as the Portfolio or the hiring of an investment advisor to manage the
Portfolio's assets in accordance with the investment policies described above.
Whenever a Feeder Portfolio, as an investor in its corresponding Trust
Series, is asked to vote on a shareholder proposal, the Fund will hold a special
meeting of the Feeder Portfolio's shareholders to solicit their votes with
respect to the proposal. The Trustees of the Fund will then vote the Feeder
Portfolio's shares in the Series in accordance with the voting instructions
received from the Feeder Portfolio's shareholders. The Trustees of the Fund will
vote shares of the Feeder Portfolio for which they receive no voting
instructions in accordance with their best judgment.
As of September 23, 1998, Peter Kiewit Sons', Inc., a Delaware
corporation with principal offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the
direct or indirect parent of shareholders of more than 25% of the voting
securities of the Money Market Portfolio and therefore may be deemed to control
that Portfolio.
30
<PAGE>
APPENDIX - DESCRIPTION OF RATINGS
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
Fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in "Aaa"
securities.
"A" - Bonds possess many favorable investment attributes and
are to be considered as upper medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of
these ratings provide questionable protection of interest and principal ("Ba"
indicates speculative elements; "B" indicates a general lack of characteristics
of desirable investment; "Caa" are of poor standing; "Ca" represents obligations
which are speculative in a high degree; and "C" represents the lowest rated
class of bonds). "Caa," "Ca" and "C" bonds may be in default.
Note: Those bonds in the Aa, A, Baa, Ba and B groups which
Moody's believes possess the strongest investment attributes are designated by
the symbols, Aa1, A1, Baa1, Ba1 and B1.
<PAGE>
Standard & Poor's Ratings Group's ("S&P") description of its bond ratings are:
AAA--An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong
AA--An obligation rated "AA" differs from the highest rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A--An obligation rated "A" is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB--An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
BB, B, CCC, CC AND C--Debt is regarded as having significant speculative
characteristics. "BB" indicates the least degree of speculation and "C" the
highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB--Debt is less vulnerable to non-payment than other speculative issues.
However, it faces major ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitment on the obligation.
B--Debt is more vulnerable to non-payment than obligations rated "BB", but the
obligor currently has the capacity to meet its financial commitment on the
obligation. Adverse business, financial or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.
CCC--Debt is currently vulnerable to non-payment, and is dependent upon
favorable business, financial and economic conditions for the obligor to meet
its financial commitment on the obligation. In the event of adverse business,
financial or economic conditions, the obligor is not likely to have the capacity
to meet its financial commitment on the obligation.
CC--An obligation rated CC is currently highly vulnerable to non-payment.
<PAGE>
C--The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.
PLUS (+) OR MINUS (-) - The ratings from AA through CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
COMMERCIAL PAPER RATINGS
A commercial paper rating by S&P is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days. The
following summarizes the rating categories used by S&P for commercial paper:
"A-1" - Obligations are rated in the highest category
indicating that the obligor's capacity to meet its financial commitment is
strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.
Moody's commercial paper ratings are opinions of the ability
of issuers to repay punctually senior debt obligations not having an original
maturity in excess of one year, unless explicitly noted. The following
summarizes the rating categories used by Moody's for commercial paper:
Prime-1" - Issuers (or supporting institutions) have a
superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on Funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity.
<PAGE>
KIEWIT MUTUAL FUND
K CLASS SHARES
C/O PFPC INC., P.O. BOX 8812, WILMINGTON, DE 19899
TELEPHONE: (800) 254-3948
STATEMENT OF ADDITIONAL INFORMATION
OCTOBER __, 1998
This statement of additional information is not a prospectus but
should be read in conjunction with the prospectus of Kiewit Mutual Fund (the
"Fund"), relating to the Fund's K Class Shares, dated October __, 1998, which
can be obtained from the Fund by writing to the Fund at the above address or by
calling the above telephone number.
TABLE OF CONTENTS
PAGE
HISTORY ......................................................................2
INVESTMENT LIMITATIONS AND POLICIES...........................................2
MANAGEMENT OF THE FUND........................................................5
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES .........................10
BROKERAGE TRANSACTIONS.......................................................12
PURCHASE AND REDEMPTION OF SHARES............................................13
TAX MATTERS .................................................................15
CALCULATION OF PERFORMANCE DATA..............................................16
OTHER INFORMATION............................................................21
FINANCIAL STATEMENTS.........................................................21
<PAGE>
HISTORY
Kiewit Institutional Fund was organized as a Delaware business trust
on June 1, 1994. The name of the trust was changed to Kiewit Mutual Fund on
October 7, 1994.
INVESTMENT LIMITATIONS AND POLICIES
The following information supplements the information set forth in the
prospectus under the caption "Investment Objectives And Policies." The following
information applies to the Feeder Portfolios and to the corresponding Trust
Series.
FUNDAMENTAL LIMITATIONS - ALL PORTFOLIOS
Each of the Portfolios has adopted certain limitations which may not
be changed with respect to any Portfolio without the approval of a majority of
the outstanding voting securities of the Portfolio. A "majority" is defined as
the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be
affected by the proposed change) present at a meeting if the holders of more
than 50% of the outstanding voting securities of the Portfolio are present or
represented by proxy, or (2) more than 50% of the outstanding voting securities
of such Portfolio.
The Portfolios either directly or indirectly through their investment
in the Series of the Trust will not: (1) as to 75% of the total assets of a
Portfolio, invest in the securities of any issuer (except obligations of the
U.S. Government and its instrumentalities) if, as a result more than 5% of the
Portfolio's total assets, at market, would be invested in the securities of such
issuer, provided that this restriction applies to 100% of the total assets of
the Kiewit Money Market Portfolio; (2) borrow, except that a Portfolio may
borrow from banks for temporary or emergency purposes or to pay redemptions and
then, in no event, in excess of 33% of its net assets and a Portfolio may pledge
not more than 33% of such assets to secure such loans; (3) pledge, mortgage, or
hypothecate any of its assets to an extent greater than 10% of its total assets
at fair market value, except as described in (2) above; (4) invest more than 15%
of the value of the Portfolio's net assets in illiquid securities which include
certain restricted securities, repurchase agreements with maturities of greater
than seven days, and other illiquid investments; (5) invest its assets in
securities of any investment company in excess of the limits set forth in the
Investment Company Act of 1940 (the "1940 Act") and rules thereunder, except in
connection with a merger, acquisition of assets, consolidation or
reorganization; (6) acquire any securities of companies within one industry if,
as a result of such acquisition, more than 25% of the value of the Portfolio's
total assets would be invested in securities of companies within such industry;
(7) engage in the business of underwriting securities issued by others, except
that, in connection with the disposition of a security, a Portfolio may be
deemed to be an "underwriter" as that term is defined in the Securities Act of
1933 (the "1933 Act"); (8) purchase or sell commodities except that each
Portfolio may purchase or sell financial
2
<PAGE>
futures contracts and options thereon; (9) invest in real estate,including
limited partnership interests therein, although they may purchase and sell
securities which deal in real estate and securities which are secured by
interests in real estate; (10) purchase securities on margin or sell securities
short, except that a Portfolio may satisfy margin requirements with respect to
futures transactions; and (11) make loans, except that this restriction shall
not prohibit (a) the purchase of obligations customarily purchased by
institutional investors, (b) the lending of Portfolio securities or (c) entry
into repurchase agreements.
The investment limitations described above do not prohibit each Feeder
Portfolio from investing all or substantially all of its assets in the shares of
another registered, open-end investment company such as the Series of the Trust.
The investment policies and limitations of each Series are the same as those of
the corresponding Feeder Portfolio.
For the purposes of (4) above, each Portfolio (indirectly through its
investment in the corresponding Trust Series) may invest in commercial paper
that is exempt from the registration requirements of the 1933 Act subject to the
requirements regarding credit ratings stated in the prospectus under "Investment
Objectives And Policies." Further, pursuant to Rule 144A under the 1933 Act, the
Portfolios (indirectly through their investment in the corresponding Trust
Series) may purchase certain unregistered (i.e. restricted) securities upon a
determination that a liquid institutional market exists for the securities. If
it is decided that a liquid market does exist, the securities will not be
subject to the 15% limitation on holdings of illiquid securities stated in (4)
above. While maintaining oversight, the Board of Trustees has delegated the
day-to-day function of making liquidity determinations to Wilmington Trust
Company (the "Manager"). For Rule 144A securities to be considered liquid, there
must be at least one dealer making a market in such securities. After purchase,
the Board of Trustees and the Manager will continue to monitor the liquidity of
Rule 144A securities. There is no limit on the Portfolios' (indirectly though
their investment in the corresponding Series) investment in Rule 144A securities
that are determined to be liquid.
For the purposes of (6) above, (i) utility companies will be divided
according to their services; e.g., gas, gas transmission, electric and gas,
electric, water and telephone will each be considered a separate industry; and
(ii) the Kiewit Money Market Portfolio (indirectly through its investment in the
corresponding Series) may invest more than 25% of the value of its total assets
in obligations of U.S. banks, such as certificates of deposits, time deposits
and bankers' acceptances. The banks must have total assets exceeding one billion
dollars.
NON-FUNDAMENTAL LIMITATIONS - ALL PORTFOLIOS
The following policies are non-fundamental and may be changed by the
Board of Trustees, without shareholder approval:
3
<PAGE>
The Portfolios (indirectly through their investment in the
corresponding Series) will not: (1) invest for the purpose of exercising control
over management of any company or (2) acquire more than 10% of the voting
securities of any issuer.
NON-FUNDAMENTAL POLICIES - KIEWIT INTERMEDIATE-TERM BOND PORTFOLIO
The following policies are non-fundamental and may be changed by the
Board of Trustees, without shareholder approval:
The Kiewit Intermediate-Term Bond Portfolio (referred to herein as the
"Kiewit Bond Portfolio"), through its investment in its corresponding Series,
may invest in obligations that permit repayment of the principal amount of the
obligation prior to maturity. Variable and floating rate obligations are
relatively long-term instruments that often carry demand features permitting the
holder to demand payment of principal at any time or at specified intervals
prior to maturity. Standby commitments, which are similar to a put, give the
Kiewit Bond Portfolio the option to obligate a broker, dealer or bank to
repurchase a security held by the Kiewit Bond Portfolio at a specified price.
Tender option bonds are relatively long-term bonds that are coupled with the
agreement of a third party (such as a broker, dealer or bank) to grant the
holders of such securities the option to tender the securities to the
institution at periodic intervals. The Kiewit Bond Portfolio will purchase these
types of instruments primarily for the purpose of increasing the liquidity of
its portfolio.
New issues of bonds are often issued on a "when-issued" basis, which
means that actual payment for the delivery of the securities generally takes
place 15 to 45 days after the purchase date. During this period, the Kiewit Bond
Portfolio bears the risk that interest rates on debt securities at the time of
delivery may be higher or lower than those contracted for on the when-issued
securities. To alleviate this risk, the Kiewit Bond Portfolio does not intend to
invest more than 5% of its assets in when-issued securities.
The Kiewit Bond Portfolio also may invest up to 5% of its assets in
zero coupon bonds or "strips." Zero coupon bonds do not make regular interest
payments, rather they are sold at a discount from face value. Principal and
accretive discount (representing interest accrued but not paid) are paid at
maturity. Strips are debt securities that are stripped of their interest after
the securities are issued, but are otherwise comparable to zero coupon bonds.
The market values of zero coupon bonds and strips generally fluctuate in
response to changes in interest rates to a greater degree than interest paying
securities of comparable term and quality. The strips in which the Kiewit Bond
Portfolio may invest may or may not be a part of the U.S. Treasury Separately
Traded Registered Interest and Principal Securities program. The Kiewit Bond
Portfolio may also purchase inverse floaters, which are instruments whose
interest bears an inverse relationship to the interest rate on another security.
4
<PAGE>
Generally, the Kiewit Bond Portfolio's average maturity will tend to
be shorter when the Manager expects interest rates to rise and longer when it
expects interest rates to decline.
PORTFOLIO TURNOVER
The portfolio turnover rates for the fiscal year ended June 30, 1996,
for the Kiewit Intermediate-Term Bond Portfolio and Kiewit Equity Portfolio and
for the years ended June 30, 1997 and June 30, 1998 for the Kiewit
Intermediate-Term Bond Series and Kiewit Equity Series were as follows:
NAME JUNE 30, 1998 JUNE 30, 1997 JUNE 30, 1996
- ---- ------------- ------------- -------------
Intermediate-Term Bond 236.36% 51.57% 86.06%
Equity 93.08% 26.33% 16.95%
In the current fiscal year, the portfolio turnover rate of the Kiewit
Intermediate-Term Bond Portfolio is not expected to exceed 100%. The annual
portfolio turnover rate of the Kiewit Equity Series is not expected to exceed
75%. Generally, securities held by the Kiewit Equity Series will not be sold to
realize short-term profits, but when circumstances warrant, they may be sold
without regard to the length of time held. Generally, securities held by the
Kiewit Equity Series will be purchased with the expectation that they will be
held for longer than one year.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The names, addresses and ages of the trustees and officers of the Fund
and a brief statement or their present positions and principal occupations
during the past five years is set forth below. Trustees who are deemed to be
"interested persons" as defined in the 1940 Act are indicated by an asterisk
(*).
Lawrence B. Thomas
7813 Pierce Circle
Omaha, NE 68124
Mr. Thomas, age 62, is a Trustee of the Fund and Kiewit Investment Trust, and
Senior Vice-President. He retired in October 1996, after having served in
numerous financial positions at ConAgra, Inc. (an international food company)
including Treasurer, Secretary, Risk Officer, and Senior Vice President-Finance
(Principal Financial Officer). In
5
<PAGE>
his thirty-six years at ConAgra, he also served as director and officer of
numerous of its subsidiaries.
Robert H. Arnold
152 W. 57th Street, 44th Floor
New York, NY 10019
Mr. Arnold, age 54, is a Trustee of the Fund and Kiewit Investment Trust. In
1989, Mr. Arnold founded, and currently co-manages, R. H. Arnold & Co., Inc., an
investment banking company. Prior to forming R. H. Arnold & Co., Inc., Mr.
Arnold was Executive Vice President and a director to Cambrian Capital
Corporation, an investment banking firm he co-founded in 1987.
Nicholas A. Giordano
LaSalle University
Philadelphia, PA 19141
Mr. Giordano, age 55, is a Trustee of the Fund and Kiewit Investment Trust. He
was appointed interim President of LaSalle University on July 1, 1998 and was a
consultant for financial services organizations from late 1997 through 1998. He
served as president and chief executive officer of the Philadelphia Stock
Exchange from 1981 through August 1997, and also served as chairman of the board
of the exchange's two subsidiaries: Stock Clearing Corporation of Philadelphia
and Philadelphia Depository Trust Company. Before joining the Philadelphia Stock
Exchange, Mr. Giordano served as chief financial officer at two brokerage firms
(1968-1971). A certified public accountant, he began his career at Price
Waterhouse in 1965.
Robert J. Christian
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
Mr. Christian, age 49, is Trustee and President of the Fund and Kiewit
Investment Trust. He has been Chief Investment Officer of Wilmington Trust
Company since February 1996 and Director of Rodney Square Management Corporation
("RSMC") since 1996. He was Chairman and Director of PNC Equity Advisors
Company, and President and Chief Investment Officer of PNC Asset Management
Group Inc. from 1994 to 1996. He was Chief Investment Officer of PNC Bank from
1992 to 1996 and Director of Provident Capital Management from 1993 to 1996.
6
<PAGE>
The fees and expenses of the Trustees who are not "interested persons"
of the Fund ("Independent Trustees"), as defined in the 1940 Act, are paid by
each Portfolio. For the fiscal year ended June 30, 1998, such fees amounted to
$27,500 for the Fund and $27,500 for the Trust. The following table shows the
fees paid during the fiscal year to the Independent Trustees for their service
to the Fund for the fiscal year ended June 30, 1998.
COMPENSATION TABLE
Aggregate Compensation Total Compensation from the
from the Fund Fund Complex
---------------------- ---------------------------
INDEPENDENT TRUSTEE
Lawrence B. Thomas $13,750 $27,500
Robert H. Arnold $13,750 $27,500
On September 23, 1998, the Trustees and officers of the Fund, as a
group, owned beneficially, or may be deemed to have owned beneficially, less
than __% of the outstanding shares of the Portfolios.
7
<PAGE>
INVESTMENt MANAGER
For the services it provides as investment manager to each Portfolio's
corresponding Series of the Trust, the Manager is paid a monthly fee calculated
as a percentage of average net assets of the corresponding Series.
Pursuant to the investment management agreements then in effect, the
fees payable to the Series' previous investment adviser, Kiewit Investment
Management Corp., for the fiscal years ended June 30, 1998, 1997 and 1996, would
have been the following:
1998 1997 1996
(000) (000) (000)
Money Market $983,634 $833,621* $843,989
Government Money Market** n/a n/a n/a
Short-Term Government*** $437,024 $434,306* $492,172
Intermediate-Term $579,830 $544,147* $563,114
Equity $695,586 $517,000* $354,646
Tax-Exempt*** $411,178 $445,922* $499,823
* Includes manager's fees payable by the Portfolio's corresponding Series of the
Trust, commencing March 3, 1997, pursuant to the Series' investment advisory
agreements.
** The Government Money Market Portfolio has not commenced operations.
*** The Short-Term Government Portfolio was liquidated on September 25, 1998 and
the Tax-Exempt Portfolio was liquidated on April 3, 1998.
During the fiscal years ended June 30, 1998, 1997 and 1996, Kiewit
Investment Management Corp. waived the following amounts to the Portfolios and,
commencing March 3, 1997, their corresponding Series:
8
<PAGE>
NAME 1998 1997 1996
Money Market Portfolio $519,887 $334,909 $298,011
Short-Term Government* 272,381 211,769 219,505
Intermediate-Term Bond 115,748 92,541 86,597
Equity 126,953 109,204 126,289
Tax Exempt* 97,408 70,323 57,267
Government Money Market** n/a n/a n/a
* The Short-Term Government Portfolio was liquidated on September 25, 1998 and
the Tax Exempt Portfolio was liquidated on April 3, 1998.
** The Government Money Market Portfolio has not commenced operations.
Wilmington Trust Company has agreed to waive all or a portion of its
advisory fee for each Portfolio's corresponding Series and to assume certain
expenses of the Portfolios and Series. This undertaking, which is not contained
in the investment management agreements, may be amended or rescinded in the
future.
Each investment management agreement is in effect for a period of two
years. Thereafter, each agreement may continue in effect for successive annual
periods, provided such continuance is specifically approved at least annually by
a vote of the Trust's Board of Trustees or, by a vote of the holders of a
majority of a Series' outstanding voting securities, and in either event by a
majority of the Trustees who are not parties to the agreement or interested
persons of any such party (other than as Trustees of the Trust), cast in person
at a meeting called for that purpose. An investment management agreement may be
terminated without penalty at any time by the Series or by the Manager on 60
days' written notice and will automatically terminate in the event of its
assignment as defined in the 1940 Act.
DISTRIBUTOR
Provident Distributors, Inc. ("PDI"), Four Fall Corporate Center, West
Conshohocken, PA 19428, serves as the Distributor of each Portfolio's K Class
Shares pursuant to a distribution agreement with the Fund. PDI receives no
compensation for distribution of K Class Shares of the Portfolios, except for
reimbursement of out-of-pocket expenses.
The Distribution Agreement provides that PDI, in the absence of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
the agreement, will not be liable to the Fund or its shareholders for losses
arising in connection with the sale of Portfolio K Class Shares.
9
<PAGE>
The Distribution Agreement, dated February 25, 1998, continues in
effect for a period of two years. Thereafter, the agreement may continue in
effect for successive annual periods provided such continuance is approved at
least annually by a majority of the Trustees, including a majority of the
Independent Trustees. The Distribution Agreement terminates automatically in the
event of its assignment. The Agreement is also terminable without payment of any
penalty with respect to each Portfolio either (i) by the Fund (by vote of a
majority of the Independent Trustees or by vote of a majority of the outstanding
voting securities of the Fund) on sixty (60) days' written notice to PDI; or
(ii) by PDI on sixty (60) days' written notice to the Fund.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of September 29, 1998, the following shareholders were known to own
of record more than 5% of the total outstanding shares of the Money Market
Portfolio:
NAME AND ADDRESS PERCENTAGE OWNERSHIP
---------------- --------------------
Wasatch Constructors 22.34%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Construction Company 26.22%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit-Granite, Joint Venture 10.54%
1000 Kiewit Plaza
Omaha, NE 68131
10
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As of September 29, 1998, the following shareholders were known to own
of record more than 5% of the total outstanding shares of the Intermediate-Term
Bond Portfolio:
NAME AND ADDRESS PERCENTAGE OWNERSHIP
---------------- --------------------
Northern Trust Company as Trustee 34.68%
for Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
Decker Coal Reclamation 39.63%
1000 Kiewit Plaza
Omaha, NE 68131
Wilmington Trust Company as Trustee 6.27%
for Black Butte Coal Company Pension Plan
1100 N. Market Street
Wilmington, DE 19890
Wilmington Trust Company as Trustee 7.31%
for Kiewit Construction Corp.
Retirement Savings Plan
1100 N. Market Street
Wilmington, DE 19890
Wilmington Trust Company as Trustee 5.19%
for Decker Coal Company Pension Plan
1100 N. Market Street
Wilmington, DE 19890
As of September 29, 1998, the following shareholders were known to own
of record more than 5% of the total outstanding shares of the Equity Portfolio:
NAME AND ADDRESS PERCENTAGE OWNERSHIP
---------------- --------------------
Northern Trust Company as Trustee 29.86%
For Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
Decker Coal Reclamation 23.27%
1000 Kiewit Plaza
Omaha, NE 68131
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<PAGE>
Wilmington Trust Co. as Trustee 32.92%
For Kiewit Construction Group Inc.
Retirement Savings Plan
1100 N. Market Street
Wilmington, DE 19890
Wilmington Trust Co. as Trustee 5.23%
For Decker Coal Company Pension Plan
1100 N. Market Street
Wilmington, DE 19890
Peter Kiewit Sons', Inc., a Delaware corporation with principal
offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the direct or indirect parent
of shareholders of more than 25% of the voting securities of the Money Market
Portfolio and therefore may be deemed to control that Portfolio.
BROKERAGE TRANSACTIONS
Brokerage transactions will be placed with a view to receiving the
best price and execution. Each Portfolio's corresponding Series will seek to
acquire and dispose of securities in a manner which would cause as little
fluctuation in the market prices of stocks being purchased or sold as possible
in light of the size of the transactions being effected, and brokers will be
selected with this goal in view. The Manager monitors the performance of brokers
which effect transactions for each Series to determine the effect that the
Series' trading has on the market prices of the securities in which they invest.
Transactions also may be placed with brokers who provide the Manager with
investment research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research services. Each
Series' Investment Management Agreement permits the Manager knowingly to pay
commissions on such transactions which are greater than another broker might
charge if the Manager, in good faith, determines that the commissions paid are
reasonable in relation to the research or brokerage services provided by the
broker or dealer when viewed in terms of either a particular transaction or the
Manager's overall responsibilities to the Trust.
Prior to February 28, 1997, the individual Portfolios sought to
achieve their investment objectives by purchasing and managing their own
investment portfolios. As a consequence, the Portfolios incurred brokerage
commissions directly rather than indirectly through their investment in the
corresponding Series. During the fiscal year ended June 30, 1997, the Kiewit
Intermediate-Term Bond Series paid no brokerage commissions. The Kiewit Equity
Series paid $115,487 in brokerage commissions for the
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<PAGE>
fiscal year ended June 30, 1998 and $28,600 for the period March 3, 1997 to June
30, 1997. The Kiewit Equity Portfolio paid $32,578 in brokerage commissions for
the fiscal year ended June 30, 1997, $82,485 for the fiscal year ended June 30,
1996 and $34,515 for the period ended June 30, 1995.
PURCHASE AND REDEMPTION OF SHARES
The Fund reserves the right, in its sole discretion, to suspend the
offering of shares of any or all Portfolios or reject purchase orders when, in
the judgment of management, such suspension or rejection is in the best interest
of the Fund or a Portfolio. Securities accepted in exchange for shares of a
Portfolio will be acquired for investment purposes and will be considered for
sale under the same circumstances as other securities in the Portfolio.
The Fund may suspend redemption privileges or postpone the date of
payment: (1) during any period when the New York Stock Exchange (the "NYSE") is
closed, or trading on the NYSE is restricted as determined by the Securities and
Exchange Commission (the "SEC"), (2) during any period when an emergency exists
as defined by the rules of the SEC as a result of which it is not reasonably
practicable for the Fund to dispose of securities owned by it, or fairly to
determine the value of its assets and (3) for such other periods as the SEC may
permit.
The valuation of the securities held by the Kiewit Money Market Series
and the Kiewit Government Money Market Series (including any securities held in
a separate account maintained for when-issued securities) is based upon their
amortized costs which does not take into account unrealized capital gains or
loses. This involves valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower than the
price such Series would receive if they sold the instrument. During periods of
declining interest rates, the daily yields on shares of the Series computed as
described above may tend to be higher than a like computation made by a fund
with identical investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio instruments.
Thus, if the use of amortized cost by the Series resulted in a lower aggregate
portfolio value on a particular day, a prospective investor in the Series would
be able to obtain a somewhat higher yield than would result from investment in a
fund utilizing solely market values, and existing investors in the Series would
receive less investment income. The converse would apply in a period of rising
interest rates.
The Kiewit Money Market and Kiewit Government Money Market Series' use
of amortized cost, which facilitates the maintenance of their corresponding
Portfolios' per
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<PAGE>
share net asset value of $1.00, is permitted by a rule adopted by the SEC,
pursuant to which the Series must adhere to certain conditions.
The Kiewit Money Market and Kiewit Government Money Market Series each
must maintain a dollar-weighted average portfolio maturity of 90 days or less,
only purchase instruments having remaining maturities of 397 calendar days or
less, and invest only in those U.S. dollar-denominated instruments that the
Manager has determined, pursuant to guidelines adopted by the Board of Trustees,
present minimal credit risks and which are, as required by the federal
securities laws (i) rated in one of the two highest rating categories as
determined by nationally recognized statistical rating agencies, (ii)
instruments deemed comparable in quality to such rated instruments, or (iii)
instruments, the issuers of which, with respect to an outstanding issue of
short-term debt that is comparable in priority and protection, have received a
rating within the two highest categories of nationally recognized statistical
rating agencies. Securities subject to floating or variable interest rates with
demand features in compliance with applicable rules of the SEC may have stated
maturities in excess of 397 days. The Trustees have established procedures
designed to stabilize, to the extent reasonably possible, the Series' price per
share as computed for the purpose of sales and redemptions at $1.00. Such
procedures will include review of the portfolio holdings by the Trustees, at
such intervals as they may deem appropriate, to determine whether the Series'
net asset value calculated by using available market quotations deviates from
$1.00 per share based on amortized cost. The extent of any deviation will be
examined by the Trustees. If such deviation exceeds 1/2 of 1%, the Trustees will
promptly consider what action, if any, will be initiated. In the event the
Trustees determine that a deviation exists which may result in material dilution
or other unfair results to investors or existing shareholders, they will take
such corrective action as they regard as necessary and appropriate, which may
include the sale of portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity, withholding dividends,
redemptions of shares in kind, or establishing a net asset value per share by
using available market quotations.
IN-KIND PURCHASES. If accepted by the Fund, shares of each Portfolio
may be purchased in exchange for securities which are eligible for acquisition
by the Portfolios or their corresponding Series, as described in this Statement
of Additional Information. Securities to be exchanged which are accepted by the
Fund and Portfolio shares to be issued therefore will be valued, as set forth
under "Valuation Of Shares," at the time of the next determination of net asset
value after such acceptance. All dividends, interest, subscription, or other
rights pertaining to such securities shall become the property of the Portfolio
whose shares are being acquired and must be delivered to the Fund by the
investor upon receipt from the issuer.
The Fund will not accept securities in exchange for shares of a
Portfolio unless: (1) current market quotations are readily available for such
securities; (2) the investor represents and agrees that all securities offered
to be exchanged are not subject to any
14
<PAGE>
restrictions upon their sale by the Portfolio (or its corresponding Series)
under the 1933 Act or under the laws of the country in which the principal
market for such securities exists, or otherwise; (3) at the discretion of the
Portfolio (or its corresponding Series), the value of any such security (except
U.S. Government securities) being exchanged together with other securities of
the same issuer owned by the corresponding Series will not exceed 5% of the net
assets of the corresponding Series immediately after the transaction; and (4)
the Portfolio (or its corresponding Series) acquires the securities for
investment and not for resale. In addition, nearly all of the securities
accepted in an exchange must be, at the time of the exchange, eligible to be
included in the Portfolio (or corresponding Series) whose shares are issued.
Investors interested in such exchanges should contact the Manager.
TAX MATTERS
The Internal Revenue Code of 1986, as amended (the "Code") imposes a
nondeductible 4% excise tax on a regulated investment company which does not
distribute to investors in each calendar year an amount equal to (i) 98% of its
calendar year ordinary income, (ii) 98% of its capital gain net income (the
excess of short and long-term capital gain over short and long-term capital
loss) for the one-year period ending each October 31, and (iii) 100% of any
undistributed ordinary income and capital gain net income from the prior year.
Each Portfolio intends to declare and pay dividends and capital gain
distributions in a manner to avoid imposition of the excise tax. Each Portfolio
also intends to comply with other Code requirements such as (1) appropriate
diversification of portfolio investments; (2) realization of 90% of annual gross
income from dividends, interest, gains from sales of securities, or other
"qualifying income."
For any Portfolio that has a principal investment policy of investing
in non-equity investments, it is anticipated that either none or only a small
portion of that Portfolio's dividends will qualify for the corporate dividends
received deduction. The portion of the dividends so qualified depends on the
aggregate qualifying dividend income received by a Portfolio from domestic
(U.S.) sources. To the extent that any Portfolio pays dividends which qualify
for this deduction, the availability of the deduction is subject to certain
holding period and debt financing restrictions imposed under the Code on the
corporation claiming the deduction.
The Fund in its sole discretion may accept securities in exchange for
shares of a Portfolio. A gain or loss for federal income tax purposes may be
realized by investors in a Portfolio who are subject to federal taxation upon
the exchange. The amount of such gain or loss realized with respect to a
security is measured by the difference between the fair market value of the
contributed security on the date of contribution and its adjusted tax basis. Any
loss realized on the exchange may be subject to certain provisions of the Code
which either disallow the recognition of any such loss or result in a deferral
of the time for recognizing such loss.
15
<PAGE>
CALCULATION OF PERFORMANCE DATA
The performance of a Portfolio's classes of shares (or its
corresponding Series) may be quoted in terms of its yield and its total return
in advertising and other promotional materials ("performance advertisements").
Performance data quoted represents past performance and is not intended to
indicate future performance. The investment return of an investment in the
Portfolios and the principal value of an investment in any Portfolio except the
Money Market Portfolio and the Government Money Market Portfolio will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost. Performance of the Portfolios will vary based on changes in
market conditions and the level of each Portfolio's expenses. These performance
figures are calculated in the following manner:
A. YIELD is the net annualized yield for a specified 7 calendar
days calculated at simple interest rates. From time to time,
the Money Market Portfolio and the Government Money Market
Portfolio may advertise their yields. Yield is calculated by
determining the net change, exclusive of capital changes, in
the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the value
of the account at the beginning of the base period to obtain
the base period return. The yield is annualized by multiplying
the base period return by 365/7. The yield figure is stated to
the nearest hundredth of one percent.
The yield for the 7-day period ended June 30, 1998 was 5.45%
for the Money Market Portfolio.
B EFFECTIVE YIELD is the net annualized yield for a specified 7
calendar days assuming reinvestment of income or compounding.
From time to time the Money Market Portfolio and the
Government Money Market Portfolio may advertise their
effective yields. Effective yield is calculated by the same
method as yield except the yield figure is compounded by
adding 1, raising the sum to a power equal to 365 divided by
7, and subtracting 1 from the result, according to the
following formula:
Effective Yield = [(Base Period Return + 1) 365/7] - 1.
The effective yield for the 7-day period ended June 30, 1998
was 5.60% for the Money Market Portfolio.
16
<PAGE>
C. YIELD of the Intermediate-Term Bond Portfolio is calculated by
dividing each Portfolio's investment income for a 30-day
period, net of expenses, by the average number of shares
entitled to receive dividends during that period according to
the following formula:
YIELD = 2[((A-B)/CD + 1)6-1]
Where:
a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends; and
d = the maximum offering price per share on the last day of
the period.
The result is expressed as an annualized percentage (assuming
semiannual compounding) of the maximum offering price per share at the end of
the period.
Except as noted below, in determining interest earned during the
period (variable "a" in the above formula), the interest earned on each debt
instrument held by a Portfolio (or its corresponding Series) during the period
is calculated by: (i) computing the instrument's yield to maturity, based on the
value of the instrument (including actual accrued interest) as of the last
business day of the period or, if the instrument was purchased during the
period, the purchase price plus accrued interest; (ii) dividing the yield to
maturity by 360; and (iii) multiplying the resulting quotient by the value of
the instrument (including actual accrued interest). Once interest earned is
calculated in this fashion for each debt instrument held by the Portfolio (or
its corresponding Series), interest earned during the period is then determined
by totaling the interest earned on all debt instruments held by the Portfolio.
For purposes of these calculations, the maturity of a debt instrument
with one or more call provisions is assumed to be the next date on which the
instrument reasonably can be expected to be called or, if none, the maturity
date. In general, interest income is reduced with respect to debt instruments
trading at a premium over their par value by subtracting a portion of the
premium from income on a daily basis, and increased with respect to debt
instruments trading at a discount by adding a portion of the discount to daily
income.
For the 30-day period ended June 30, 1998, the yield for the
Intermediate-Term Bond Portfolio was 5.39%.
Since yield accounting methods differ from the accounting methods used
to calculate net investment income for other purposes, a Portfolio's yield may
not equal the
17
<PAGE>
dividend income actually paid to investors or the net investment income reported
with respect to the Portfolio in the Fund's financial statements.
Yield information may be useful in reviewing a Portfolio's performance
and in providing a basis for comparison with other investment alternatives.
Nevertheless, the Portfolios' yields fluctuate, unlike investments that pay a
fixed interest rate over a stated period of time. Investors should recognize
that in periods of declining interest rates, the Portfolios' yields will tend to
be somewhat higher than prevailing market rates, and in periods of rising
interest rates, the Portfolios' yields will tend to be somewhat lower. Also,
when interest rates are falling, the inflow of net new money to the Portfolios
from the continuous sale of their shares will likely be invested in instruments
producing lower yields than the balance of the Portfolios' holdings, thereby
reducing the current yields of the Portfolios. In periods of rising interest
rates, the opposite can be expected to occur.
D. AVERAGE ANNUAL TOTAL RETURN is the average annual compound
rate of return for the periods of one year, five years, ten
years and the life of a Portfolio, where quotations reflect
changes in the price of a Portfolio's shares, if any, and
assume that all dividend and capital gains distributions, if
any, during the respective periods were reinvested in
Portfolio shares. Each Portfolio may advertise its average
annual total return from time to time. Average annual total
return is calculated by finding the average annual compound
rates of return of a hypothetical investment over such
periods, according to the following formula (average annual
total return is then expressed as a percentage):
P (1 + T)n = ERV
Where: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
18
<PAGE>
Average Annual Total Returns for the one-year period ended
June 30, 1998 and for the periods from the effective date of
the Fund's registration statement under the Securities Act of
1933 or commencement of operations1, whichever occurred later,
through June 30, 1997:
1 year ended Since Inception(1)
JUNE 30, 1998 THROUGH JUNE 30, 1998
------------- ---------------------
Money Market Portfolio 5.61% 5.60%
Intermediate-Term Bond Portfolio 8.68% 8.23%
Equity Portfolio 29.09% 24.92%
Government Money Market Portfolio n/a n/a
1 The Money Market Portfolio and Intermediate-Term Bond Portfolio
became available on December 6, 1994. The Equity Portfolio commenced operations
on January 5, 1995. The Government Money Market Portfolio has not commenced
operations.
E. CUMULATIVE TOTAL RETURN is the cumulative rate of return on
a hypothetical initial investment of $1,000 for a specified
period. Cumulative total return quotations reflect the
change in the price of a Portfolio's shares, if any, and
assume that all dividends and capital gains distributions,
if any, during the period were reinvested in Portfolio
shares. Cumulative total return is calculated by finding the
cumulative rates of return of a hypothetical investment over
such periods, according to the following formula (cumulative
total return is then expressed as a percentage):
C = (ERV/P) - 1
Where: C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value, at
the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
19
<PAGE>
Cumulative Total Returns for the one-year period ended June
30, 1998 and for the periods from the effective date of the
Fund's registration statement under the Securities Act of
1933 or commencement of operations1, whichever occurred
later, through June 30, 1998:
1 year ended Since Inception(1)
June 30, 1998 through June 30, 1998
------------- ---------------------
Money Market Portfolio 5.61% 21.49%
Intermediate-Term Bond Portfolio 8.68% 32.63%
Equity Portfolio 29.09% 117.26%
Government Money Market Portfolio n/a n/a
1. The Money Market Portfolio and Intermediate-Term Bond Portfolio commenced
operations on December 6, 1994. The Equity Portfolio commenced operations on
January 5, 1995. The Government Money Market Portfolio has not commenced
operations.
The preceding performance figures were affected by fee waivers and
expenses assumed by the Portfolios' investment manager. Without such fee waivers
and expense assumptions, the performance figures quoted above would have been
lower. Performance quotations are not provided for the Government Money Market
Portfolio because such Portfolio had not commenced operations as of the date of
this Statement of Additional Information.
The Portfolios may also from time to time present some or all of their
investments ranked by their percentage representation within the respective
Portfolio or in the form of the schedule of "Investments" included in the Annual
Report to the shareholders of the Portfolios as of and for the fiscal year ended
June 30, 1998, which is incorporated by reference into this document.
Performance advertisements for the Money Market Portfolio and the
Government Money Market Portfolio may include yield calculations for the 7-day
period ending on the most recent practicable date considering the media used for
the advertisement. Performance advertisements for the other four Portfolios may
include average annual total returns and 30-day yield calculations as of the end
of the most recent quarter practicable considering the media used for the
advertisement. Such advertisements may include a schedule of investments for the
corresponding date, employing presentation principles used in annual reports to
shareholders.
To help investors better evaluate how an investment in a Portfolio
might satisfy their investment objective, advertisements regarding a Portfolio
may discuss yield or total return as reported by various financial publications.
Advertisements may also compare yield or total return to other investments,
indices and averages. The following publications, benchmarks, indices, and
averages may be used: Lipper Mutual Fund Performance Analysis; Lipper Fixed
Income Analysis; Lipper Mutual Fund Indices;
20
<PAGE>
Salomon Brothers Indices; Lehman Brothers Indices; Dow Jones Composite Average
or its component indices; Standard & Poor's 500 Composite Stock Price Index (the
"S&P 500") or its component indices; The New York Stock Exchange composite or
component indices; CDA Mutual Fund Report; Weisenberger - Mutual Fund Panorama
and Investment Companies; Mutual Fund Values and Mutual Fund Service Book,
published by Morningstar, Inc.; and financial publications such as BUSINESS
WEEK, KIPLINGER'S PERSONAL FINANCE, FINANCIAL WORLD, FORBES, FORTUNE, MONEY
MAGAZINE, THE WALL STREET JOURNAL, BARRON'S, et al., which rate mutual fund
performance over various time periods.
Currently the performance of the Kiewit Money Market Portfolio and the
Government Money Market Portfolio may be compared to the performance of IBC's
Money Fund Average. The IBC's Money Fund Average is a composition of all
reporting money market funds with similar objectives and restrictions. The
Kiewit Intermediate-Term Bond Portfolio is currently compared to the Lehman
Intermediate Corporate Index. The Lehman Intermediate Corporate Index is a total
return performance benchmark consisting of publicly issued corporate debt issues
rated at least investment grade with maturities from one to ten years. The
Lehman 5-Year Municipal Bond Index is a total return performance benchmark
consisting of tax-exempt municipal bonds rated at least investment grade with
maturities from four to six years. The Kiewit Equity Portfolio is currently
compared to the S&P 500. The S&P 500 is an unmanaged capitalization weighted
index of five hundred publicly traded stocks.
OTHER INFORMATION
The Fund does not intend to hold annual meetings; it may, however,
hold a meeting for such purposes as changing fundamental investment limitations,
approving a new investment management agreement or any other matters which are
required to be acted on by shareholders under the 1940 Act. Shareholders may
receive assistance in communicating with other shareholders in connection with
the election or removal of Trustees similar to the provisions contained in
Section 16(c) of the 1940 Act.
PNC Bank, NA, 1600 Market Street, Philadelphia, PA 19103 serves as the
Fund's custodian.
PricewaterhouseCoopers LLP, Thirty South 17th Street, Philadelphia,
Pennsylvania 19103, serves the Fund's independent accountants.
FINANCIAL STATEMENTS
The audited financial statements and the financial highlights for the
Fund for its fiscal year ended June 30, 1998, as set forth in the Fund's annual
report to shareholders, and the report thereon of PricewaterhouseCoopers LLP,
the Fund's independent
21
<PAGE>
accountants, also appearing in the Fund's annual report, are incorporated herein
by reference. The audited financial statements for the Series of Kiewit
Investment Trust for the fiscal year ended June 30, 1998 as set forth in the
Trust's annual report to shareholders and the report thereon of
PricewaterhouseCoopers LLP, the Trust's independent accountant, also appearing
therein are incorporated by reference. A shareholder may obtain a copy of these
reports upon request and without charge by contacting the Fund. With reference
to the fiscal year ended June 30, 1995, see the report of independent
accountants included in the Fund's registration statement and which is available
upon request, without charge, by writing or calling the Fund at 400 Bellevue
Parkway, Suite 108, Wilmington, DE 19809, (800) 254-3948.
<PAGE>
KIEWIT MUTUAL FUND
S CLASS SHARES
C/O PFPC INC., P.O. BOX 8812, WILMINGTON, DE 19899
TELEPHONE: (800) 254-3948
STATEMENT OF ADDITIONAL INFORMATION
OCTOBER __, 1998
This statement of additional information is not a prospectus but should
be read in conjunction with the prospectus of Kiewit Mutual Fund (the "Fund"),
relating to the Fund's S Class Shares, dated October ____, 1998 which can be
obtained from the Fund by writing to the Fund at the above address or by calling
the above telephone number.
TABLE OF CONTENTS
PAGE
HISTORY ...................................................................2
INVESTMENT LIMITATIONS AND POLICIES........................................2
MANAGEMENT OF THE FUND.....................................................5
DISTRIBUTION PLAN..........................................................9
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES ......................11
BROKERAGE TRANSACTIONS....................................................14
PURCHASE AND REDEMPTION OF SHARES.........................................14
TAX MATTERS ..............................................................17
CALCULATION OF PERFORMANCE DATA...........................................18
OTHER INFORMATION.........................................................22
FINANCIAL STATEMENTS......................................................22
<PAGE>
HISTORY
Kiewit Institutional Fund was organized as a Delaware business trust
on June 1, 1994. The name of the trust was changed to Kiewit Mutual Fund on
October 7, 1994.
INVESTMENT LIMITATIONS AND POLICIES
The following information supplements the information set forth in the
prospectus under the caption "Investment Objectives And Policies." The following
information applies to the Feeder Portfolios and to the corresponding Trust
Series.
FUNDAMENTAL LIMITATIONS - ALL PORTFOLIOS
Each of the Portfolios has adopted certain limitations which may not
be changed with respect to any Portfolio without the approval of a majority of
the outstanding voting securities of the Portfolio. A "majority" is defined as
the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be
affected by the proposed change) present at a meeting if the holders of more
than 50% of the outstanding voting securities of the Portfolio are present or
represented by proxy, or (2) more than 50% of the outstanding voting securities
of such Portfolio.
The Portfolios either directly or indirectly through their investment
in the Series of the Trust will not: (1) as to 75% of the total assets of a
Portfolio, invest in the securities of any issuer (except obligations of the
U.S. Government and its instrumentalities) if, as a result more than 5% of the
Portfolio's total assets, at market, would be invested in the securities of such
issuer, provided that this restriction applies to 100% of the total assets of
the Kiewit Money Market Portfolio; (2) borrow, except that a Portfolio may
borrow from banks for temporary or emergency purposes or to pay redemptions and
then, in no event, in excess of 33% of its net assets and a Portfolio may pledge
not more than 33% of such assets to secure such loans; (3) pledge, mortgage, or
hypothecate any of its assets to an extent greater than 10% of its total assets
at fair market value, except as described in (2) above; (4) invest more than 15%
of the value of the Portfolio's net assets in illiquid securities which include
certain restricted securities, repurchase agreements with maturities of greater
than seven days, and other illiquid investments; (5) invest its assets in
securities of any investment company in excess of the limits set forth in the
Investment Company Act of 1940 (the "1940 Act") and rules thereunder, except in
connection with a merger, acquisition of assets, consolidation or
reorganization; (6) acquire any securities of companies within one industry if,
as a result of such acquisition, more than 25% of the value of the Portfolio's
total assets would be invested in securities of companies within such industry;
(7) engage in the business of underwriting securities issued by others, except
that, in connection with the disposition of a security, a Portfolio may be
deemed to be an "underwriter" as that term is defined in the Securities Act of
1933 (the "1933 Act"); (8) purchase or sell commodities except that each
Portfolio may purchase or sell financial
2
<PAGE>
futures contracts and options thereon; (9) invest in real estate, including
limited partnership interests therein, although they may purchase and sell
securities which deal in real estate and securities which are secured by
interests in real estate; (10) purchase securities on margin or sell securities
short, except that a Portfolio may satisfy margin requirements with respect to
futures transactions; and (11) make loans, except that this restriction shall
not prohibit (a) the purchase of obligations customarily purchased by
institutional investors, (b) the lending of Portfolio securities or (c) entry
into repurchase agreements.
The investment limitations described above do not prohibit each Feeder
Portfolio from investing all or substantially all of its assets in the shares of
another registered, open-end investment company such as the Series of the Trust.
The investment policies and limitations of each Series are the same as those of
the corresponding Feeder Portfolio.
For the purposes of (4) above, each Portfolio (indirectly through its
investment in the corresponding Trust Series) may invest in commercial paper
that is exempt from the registration requirements of the 1933 Act subject to the
requirements regarding credit ratings stated in the prospectus under "Investment
Objectives And Policies." Further, pursuant to Rule 144A under the 1933 Act, the
Portfolios (indirectly through their investment in the corresponding Trust
Series) may purchase certain unregistered (i.e. restricted) securities upon a
determination that a liquid institutional market exists for the securities. If
it is decided that a liquid market does exist, the securities will not be
subject to the 15% limitation on holdings of illiquid securities stated in (4)
above. While maintaining oversight, the Board of Trustees has delegated the
day-to-day function of making liquidity determinations to Wilmington Trust
Company (the "Manager"). For Rule 144A securities to be considered liquid, there
must be at least one dealer making a market in such securities. After purchase,
the Board of Trustees and the Manager will continue to monitor the liquidity of
Rule 144A securities. There is no limit on the Portfolios' (indirectly though
their investment in the corresponding Series) investment in Rule 144A securities
that are determined to be liquid.
For the purposes of (6) above, (i) utility companies will be divided
according to their services; e.g., gas, gas transmission, electric and gas,
electric, water and telephone will each be considered a separate industry; and
(ii) the Kiewit Money Market Portfolio (indirectly through its investment in the
corresponding Series) may invest more than 25% of the value of its total assets
in obligations of U.S. banks, such as certificates of deposits, time deposits
and bankers' acceptances. The banks must have total assets exceeding one billion
dollars.
NON-FUNDAMENTAL LIMITATIONS - ALL PORTFOLIOS
The following policies are non-fundamental and may be changed by the
Board of Trustees, without shareholder approval:
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The Portfolios (indirectly through their investment in the
corresponding Series) will not: (1) invest for the purpose of exercising control
over management of any company or (2) acquire more than 10% of the voting
securities of any issuer.
NON-FUNDAMENTAL POLICIES - KIEWIT INTERMEDIATE-TERM BOND PORTFOLIO
The following policies are non-fundamental and may be changed by the
Board of Trustees, without shareholder approval:
The Kiewit Intermediate-Term Bond Portfolio (referred to herein as the
"Kiewit Bond Portfolio"), through its investment in its corresponding Series,
may invest in obligations that permit repayment of the principal amount of the
obligation prior to maturity. Variable and floating rate obligations are
relatively long-term instruments that often carry demand features permitting the
holder to demand payment of principal at any time or at specified intervals
prior to maturity. Standby commitments, which are similar to a put, give the
Kiewit Bond Portfolio the option to obligate a broker, dealer or bank to
repurchase a security held by the Kiewit Bond Portfolio at a specified price.
Tender option bonds are relatively long-term bonds that are coupled with the
agreement of a third party (such as a broker, dealer or bank) to grant the
holders of such securities the option to tender the securities to the
institution at periodic intervals. The Kiewit Bond Portfolio will purchase these
types of instruments primarily for the purpose of increasing the liquidity of
its portfolio.
New issues of bonds are often issued on a "when-issued" basis, which
means that actual payment for the delivery of the securities generally takes
place 15 to 45 days after the purchase date. During this period, the Kiewit Bond
Portfolio bears the risk that interest rates on debt securities at the time of
delivery may be higher or lower than those contracted for on the when-issued
securities. To alleviate this risk, the Kiewit Bond Portfolio does not intend to
invest more than 5% of its assets in when-issued securities.
The Kiewit Bond Portfolio also may invest up to 5% of its assets in
zero coupon bonds or "strips." Zero coupon bonds do not make regular interest
payments, rather they are sold at a discount from face value. Principal and
accretive discount (representing interest accrued but not paid) are paid at
maturity. Strips are debt securities that are stripped of their interest after
the securities are issued, but are otherwise comparable to zero coupon bonds.
The market values of zero coupon bonds and strips generally fluctuate in
response to changes in interest rates to a greater degree than interest paying
securities of comparable term and quality. The strips in which the Kiewit Bond
Portfolio may invest may or may not be a part of the U.S. Treasury Separately
Traded Registered Interest and Principal Securities program. The Kiewit Bond
Portfolio may also purchase inverse floaters, which are instruments whose
interest bears an inverse relationship to the interest rate on another security.
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Generally, the Kiewit Bond Portfolio's average maturity will tend to
be shorter when the Manager expects interest rates to rise and longer when it
expects interest rates to decline.
PORTFOLIO TURNOVER
The portfolio turnover rates for the fiscal year ended June 30, 1996,
for the Kiewit Intermediate-Term Bond Portfolio and Kiewit Equity Portfolio and
for the years ended June 30, 1997 and June 30, 1998 for the Kiewit
Intermediate-Term Bond Series and Kiewit Equity Series were as follows:
Name June 30, 1998 June 30, 1997 June 30, 1996
- ---- ------------- ------------- -------------
Intermediate-Term Bond 236.36% 51.57% 86.06%
Equity 93.08% 26.33% 16.95%
In the current fiscal year, the portfolio turnover rate of the Kiewit
Intermediate-Term Bond Portfolio is not expected to exceed 100%. The annual
portfolio turnover rate of the Kiewit Equity Series is not expected to exceed
75%. Generally, securities held by the Kiewit Equity Series will not be sold to
realize short-term profits, but when circumstances warrant, they may be sold
without regard to the length of time held. Generally, securities held by the
Kiewit Equity Series will be purchased with the expectation that they will be
held for longer than one year.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The names, addresses and ages of the trustees and officers of the Fund
and a brief statement or their present positions and principal occupations
during the past five years is set forth below. Trustees who are deemed to be
"interested persons" as defined in the 1940 Act are indicated by an asterisk
(*).
Lawrence B. Thomas
7813 Pierce Circle
Omaha, NE 68124
Mr. Thomas, age 62, is a Trustee of the Fund and Kiewit Investment Trust, and
Senior Vice-President. He retired in October 1996, after having served in
numerous financial positions at ConAgra, Inc. (an international food company)
including Treasurer, Secretary, Risk Officer, and Senior Vice President-Finance
(Principal Financial Officer). In
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his thirty-six years at ConAgra, he also served as director and officer of
numerous of its subsidiaries.
Robert H. Arnold
152 W. 57th Street, 44th Floor
New York, NY 10019
Mr. Arnold, age 54, is a Trustee of the Fund and Kiewit Investment Trust. In
1989, Mr. Arnold founded, and currently co-manages, R. H. Arnold & Co., Inc., an
investment banking company. Prior to forming R. H. Arnold & Co., Inc., Mr.
Arnold was Executive Vice President and a director to Cambrian Capital
Corporation, an investment banking firm he co-founded in 1987.
Nicholas A. Giordano
LaSalle University
Philadelphia, PA 19141
Mr. Giordano, age 55, is a Trustee of the Fund and Kiewit Investment Trust. He
was appointed interim President of LaSalle University on July 1, 1998 and was a
consultant for financial services organizations from late 1997 through 1998. He
served as president and chief executive officer of the Philadelphia Stock
Exchange from 1981 through August 1997, and also served as chairman of the board
of the exchange's two subsidiaries: Stock Clearing Corporation of Philadelphia
and Philadelphia Depository Trust Company. Before joining the Philadelphia Stock
Exchange, Mr. Giordano served as chief financial officer at two brokerage firms
(1968-1971). A certified public accountant, he began his career at Price
Waterhouse in 1965.
Robert J. Christian
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
Mr. Christian, age 49, is Trustee and President of the Fund and Kiewit
Investment Trust. He has been Chief Investment Officer of Wilmington Trust
Company since February 1996 and Director of Rodney Square Management Corporation
("RSMC") since 1996. He was Chairman and Director of PNC Equity Advisors
Company, and President and Chief Investment Officer of PNC Asset Management
Group Inc. from 1994 to 1996. He was Chief Investment Officer of PNC Bank from
1992 to 1996 and Director of Provident Capital Management from 1993 to 1996.
The fees and expenses of the Trustees who are not "interested persons"
of the Fund ("Independent Trustees"), as defined in the 1940 Act, are paid by
each Portfolio. For the fiscal year ended June 30, 1998, such fees amounted to
$27,500 for the Fund and
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$27,500 for the Trust. The following table shows the fees paid during the fiscal
year to the Independent Trustees for their service to the Fund for the fiscal
year ended June 30, 1998.
COMPENSATION TABLE
Aggregate Compensation Total Compensation from
from the Fund the Fund Complex
---------------------- -----------------------
INDEPENDENT TRUSTEE
Lawrence B. Thomas $13,750 $27,500
Robert H. Arnold $13,750 $27,500
On September __, 1998, the Trustees and officers of the Fund, as a
group, owned beneficially, or may be deemed to have owned beneficially, less
than __% of the outstanding shares of the Portfolios.
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<PAGE>
INVESTMENT MANAGER
For the services it provides as investment manager to each Portfolio's
corresponding Series of the Trust, the Manager is paid a monthly fee calculated
as a percentage of average net assets of the corresponding Series.
Pursuant to the investment management agreements, then in effect, the
fees payable to the Series' previous investment adviser, Kiewit Investment
Management Corp., for the fiscal years ended June 30, 1998, 1997 and 1996, would
have been the following:
1998 1997 1996
(000) (000) (000)
Money Market $983,634 $833,621* $843,989
Government Money Market** n/a n/a n/a
Short-Term Government*** $437,024 $434,306* $492,172
Intermediate-Term $579,830 $544,147* $563,114
Equity $695,586 $517,000* $354,646
Tax-Exempt*** $411,178 $445,922* $499,823
* Includes manager's fees payable by the Portfolio's corresponding Series of the
Trust, commencing March 3, 1997, pursuant to the Series' investment advisory
agreements.
** The Government Money Market Portfolio has not commenced operations.
*** The Short-Term Government Portfolio was liquidated on September 25, 1998 and
the Tax-Exempt Portfolio was liquidated on April 3, 1998.
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During the fiscal year ended June 30, 1998, 1997 and 1996, the Kiewit Investment
Management Corp. waived the following amounts to the Portfolios and, commencing
March 3, 1997, their corresponding Series:
Name 1998 1997 1996
Money Market Portfolio $519,887 $334,909 $298,011
Short-Term Government 272,381 211,769 219,505
Intermediate-Term Bond 115,748 92,541 86,597
Equity 126,953 109,204 126,289
Tax Exempt* 97,408 70,323 57,267
Government Money Market** n/a n/a n/a
* The Short-Term Government was liquidated on September 25, 1998 and the Tax
Exempt Portfolio was liquidated on April 3, 1998.
** The Government Money Market Portfolio has not commenced operations.
Wilmington Trust Company has agreed to waive all or a portion of its
advisory fee for each Portfolio's corresponding Series and to assume certain
expenses of the Portfolios and Series. This undertaking, which is not contained
in the investment management agreements, may be amended or rescinded in the
future.
Each investment management agreement is in effect for a period of two
years. Thereafter, each agreement may continue in effect for successive annual
periods, provided such continuance is specifically approved at least annually by
a vote of the Trust's Board of Trustees or, by a vote of the holders of a
majority of a Series' outstanding voting securities, and in either event by a
majority of the Trustees who are not parties to the agreement or interested
persons of any such party (other than as Trustees of the Trust), cast in person
at a meeting called for that purpose. An investment management agreement may be
terminated without penalty at any time by the Series or by the Manager on 60
days' written notice and will automatically terminate in the event of its
assignment as defined in the 1940 Act.
DISTRIBUTION PLAN
Provident Distributors, Inc. ("PDI") serves as the Distributor of each
Portfolio's Shares pursuant to a Distribution Agreement with the Fund. Under the
terms of the Distribution Agreement, PDI agrees to assist in securing purchasers
for shares of the Portfolios.
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<PAGE>
As noted in the Fund's Prospectus, the S Class Shares of each
Portfolio have adopted a Plan pursuant to Rule 12b-1 under the 1940 Act (the
"Plan") whereby the Fund may pay up to a maximum of 0.25% per annum of the
average daily net assets of the S Class Shares. The fees are paid on a monthly
basis, based on the average daily net assets of each Portfolio's S Class Shares.
Pursuant to the Plan, the Distributor is entitled to a reimbursement
each month up to the maximum of 0.25% for S Class Shares per annum of average
net assets, for the actual expenses incurred in the distribution and promotion
of the Fund's shares, including but not limited to, printing of prospectuses and
reports used for sales purposes, preparation and printing of sales literature
and related expenses, advertisements, and other distribution-related expenses as
well as any distribution or service fees paid to security dealers or others who
have executed a dealer agreement with the Underwriter. Any expense of
distribution in excess of 0.25% per annum will be borne by the Manager without
any reimbursement or payment by the Fund.
The Plan also provides that to the extent that the Fund, the Manager,
the Distributor, or other parties on behalf of the Fund, the Manager, or the
Underwriter make payments that are deemed to be payments for the financing of
any activity primarily intended to result in the sale of shares issued by the
Fund within the context of Rule 12b-1, such payments shall be deemed to be made
pursuant to the Plan, exceed the amount permitted to be paid pursuant to
applicable rules of the National Association of Security Dealers, Inc.
The Board of Trustees has determined that a consistent cash flow
resulting from the sale of new shares is necessary and appropriate to meet
redemptions and to take advantage of buying opportunities without having to make
unwarranted liquidations of portfolio securities. The Board therefore believes
that it will likely benefit the Fund to have monies available for the direct
distribution activities of the Distributor in promoting the sale of the Fund's
shares, and to avoid any uncertainties as to whether other payments constitute
distribution expenses on behalf of the Fund. The Board of Trustees, including
non-interested trustees, has concluded that in the exercise of their reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Fund and its shareholders.
The Plan has been approved by the Fund's Board of Trustees, including
all of the trustees who are non-interested persons as defined in the 1940 Act.
The Plan must be renewed annually by the Fund's Board of Trustees, including a
majority of the trustees who are non-interested persons of the Fund and who have
no direct or indirect financial interest in the operation of the Plan. The votes
must be cast in person at a meeting called for that purpose. It is also required
that the selection and nomination of such trustees be done by the non-interested
trustees. The Plan and any related agreements may be terminated at any time,
without any penalty: 1) by vote of a majority of the non-interested
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<PAGE>
trustees on not more than 60 days' written notice, 2) by the Distributor on not
more than 60 days' written notice, 3) by vote of a majority of the Fund's
outstanding shares, on 60 days' written notice, and 4) automatically by any act
that terminates the Distribution Agreement with the Distributor. The Distributor
or any dealer or other firm may also terminate their respective agreements at
any time upon written notice.
The Plan and any related agreement may not be amended to increase
materially the amounts to be spent for distribution expenses without approval by
a majority of the Fund's outstanding shares, and all material amendments to the
Plan or any related agreements shall be approved by a vote of the non-interested
trustees, cast in person at a meeting called for the purpose of voting on such
amendment.
The Underwriter is required to report in writing to the Board of
Trustees of the Fund, at least quarterly, on the amounts and purpose of any
payments made under the Plan, as well as to furnish the Board with such other
information as may reasonably be requested in order to enable the Board to make
an informed determination of whether the Plan should be continued.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of September 29, 1998, the following shareholders were known to own
of record more than 5% of the total outstanding shares of the Money Market
Portfolio:
Name and Address Percentage Ownership
---------------- --------------------
Wasatch Constructors 22.34%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Construction Company 26.22%
1000 Kiewit Plaza
Omaha, NE 68131
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Kiewit-Granite, Joint Venture 10.54%
1000 Kiewit Plaza
Omaha, NE 68131
As of September 29, 1998, the following shareholders were known to own
of record more than 5% of the total outstanding shares of the Intermediate-Term
Bond Portfolio:
Name and Address Percentage Ownership
---------------- --------------------
Northern Trust Company as Trustee 34.68%
for Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
Decker Coal Reclamation 39.63%
1000 Kiewit Plaza
Omaha, NE 68131
Wilmington Trust Company as Trustee 6.27%
for Black Butte Coal Company Pension Plan
1100 N. Market Street
Wilmington, DE 19890
Wilmington Trust Company as Trustee 7.31%
for Kiewit Construction Corp.
Retirement Savings Plan
1100 N. Market Street
Wilmington, DE 19890
Wilmington Trust Company as Trustee 5.19%
for Decker Coal Company Pension Plan
1100 N. Market Street
Wilmington, DE 19890
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As of September 29, 1998, the following shareholders were known to own
of record more than 5% of the total outstanding shares of the Equity Portfolio:
Name and Address Percentage Ownership
---------------- --------------------
Northern Trust Company as Trustee 29.86%
For Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
Decker Coal Reclamation 23.27%
1000 Kiewit Plaza
Omaha, NE 68131
Wilmington Trust Co. as Trustee 32.92%
For Kiewit Construction Group Inc.
Retirement Savings Plan
1100 N. Market Street
Wilmington, DE 19890
Wilmington Trust Co. as Trustee 5.23%
For Decker Coal Company Pension Plan
1100 N. Market Street
Wilmington, DE 19890
Peter Kiewit Sons', Inc., a Delaware corporation with principal
offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the direct or indirect parent
of shareholders of more than 25% of the voting securities of the Money Market
Portfolio and therefore may be deemed to control that Portfolio.
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<PAGE>
BROKERAGE TRANSACTIONS
Brokerage transactions will be placed with a view to receiving the
best price and execution. Each Portfolio's corresponding Series will seek to
acquire and dispose of securities in a manner which would cause as little
fluctuation in the market prices of stocks being purchased or sold as possible
in light of the size of the transactions being effected, and brokers will be
selected with this goal in view. The Manager monitors the performance of brokers
which effect transactions for each Series to determine the effect that the
Series' trading has on the market prices of the securities in which they invest.
Transactions also may be placed with brokers who provide the Manager with
investment research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research services. Each
Series' Investment Management Agreement permits the Manager knowingly to pay
commissions on such transactions which are greater than another broker might
charge if the Manager, in good faith, determines that the commissions paid are
reasonable in relation to the research or brokerage services provided by the
broker or dealer when viewed in terms of either a particular transaction or the
Manager's overall responsibilities to the Trust.
Prior to February 28, 1997, the individual Portfolios sought to
achieve their investment objectives by purchasing and managing their own
investment portfolios. As a consequence, the Portfolios incurred brokerage
commissions directly rather than indirectly through their investment in the
corresponding Series. During the fiscal year ended June 30, 1997, the Kiewit
Intermediate-Term Bond Series paid no brokerage commissions. The Kiewit Equity
Series paid $115,487 in brokerage commissions for the fiscal year ended June
30,n 1998, and $28,600 for the period March 3, 1997 to June 30, 1997. The Kiewit
Equity Portfolio paid $32,578 in brokerage commissions for the fiscal year ended
June 30, 1997, $82,485 for the fiscal year ended June 30, 1996 and $34,515 for
the period ended June 30, 1995.
PURCHASE AND REDEMPTION OF SHARES
The Fund reserves the right, in its sole discretion, to suspend the
offering of shares of any or all Portfolios or reject purchase orders when, in
the judgment of management, such suspension or rejection is in the best interest
of the Fund or a Portfolio. Securities accepted in exchange for shares of a
Portfolio will be acquired for investment purposes and will be considered for
sale under the same circumstances as other securities in the Portfolio.
The Fund may suspend redemption privileges or postpone the date of
payment: (1) during any period when the New York Stock Exchange (the "NYSE") is
closed, or trading on the NYSE is restricted as determined by the Securities and
Exchange Commission (the "SEC"), (2) during any period when an emergency exists
as defined by the rules of the SEC as a result of which it is not reasonably
practicable for the Fund to
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<PAGE>
dispose of securities owned by it, or fairly to determine the value of its
assets and (3) for such other periods as the SEC may permit.
The valuation of the securities held by the Kiewit Money Market Series
and the Kiewit Government Money Market Series (including any securities held in
a separate account maintained for when-issued securities) is based upon their
amortized costs which does not take into account unrealized capital gains or
loses. This involves valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower than the
price such Series would receive if they sold the instrument. During periods of
declining interest rates, the daily yields on shares of the Series computed as
described above may tend to be higher than a like computation made by a fund
with identical investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio instruments.
Thus, if the use of amortized cost by the Series resulted in a lower aggregate
portfolio value on a particular day, a prospective investor in the Series would
be able to obtain a somewhat higher yield than would result from investment in a
fund utilizing solely market values, and existing investors in the Series would
receive less investment income. The converse would apply in a period of rising
interest rates.
The Kiewit Money Market and Kiewit Government Money Market Series' use
of amortized cost, which facilitates the maintenance of their corresponding
Portfolios' per share net asset value of $1.00, is permitted by a rule adopted
by the SEC, pursuant to which the Series must adhere to certain conditions.
The Kiewit Money Market and Kiewit Government Money Market Series each
must maintain a dollar-weighted average portfolio maturity of 90 days or less,
only purchase instruments having remaining maturities of 397 calendar days or
less, and invest only in those U.S. dollar-denominated instruments that the
Manager has determined, pursuant to guidelines adopted by the Board of Trustees,
present minimal credit risks and which are, as required by the federal
securities laws (i) rated in one of the two highest rating categories as
determined by nationally recognized statistical rating agencies, (ii)
instruments deemed comparable in quality to such rated instruments, or (iii)
instruments, the issuers of which, with respect to an outstanding issue of
short-term debt that is comparable in priority and protection, have received a
rating within the two highest categories of nationally recognized statistical
rating agencies. Securities subject to floating or variable interest rates with
demand features in compliance with applicable rules of the SEC may have stated
maturities in excess of 397 days. The Trustees have established procedures
designed to stabilize, to the extent reasonably possible, the Series' price per
share as computed for the purpose of sales and redemptions at $1.00. Such
procedures will include review of the portfolio holdings by the Trustees, at
such intervals
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<PAGE>
as they may deem appropriate, to determine whether the Series' net asset value
calculated by using available market quotations deviates from $1.00 per share
based on amortized cost. The extent of any deviation will be examined by the
Trustees. If such deviation exceeds 1/2 of 1%, the Trustees will promptly
consider what action, if any, will be initiated. In the event the Trustees
determine that a deviation exists which may result in material dilution or other
unfair results to investors or existing shareholders, they will take such
corrective action as they regard as necessary and appropriate, which may include
the sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity, withholding dividends,
redemptions of shares in kind, or establishing a net asset value per share by
using available market quotations.
IN-KIND PURCHASES. If accepted by the Fund, shares of each Portfolio
may be purchased in exchange for securities which are eligible for acquisition
by the Portfolios or their corresponding Series, as described in this Statement
of Additional Information. Please contact Rodney Square about this purchase
method. Securities to be exchanged which are accepted by the Fund and Portfolio
shares to be issued therefore will be valued, as set forth under "Valuation Of
Shares," at the time of the next determination of net asset value after such
acceptance. All dividends, interest, subscription, or other rights pertaining to
such securities shall become the property of the Portfolio whose shares are
being acquired and must be delivered to the Fund by the investor upon receipt
from the issuer.
The Fund will not accept securities in exchange for shares of a
Portfolio unless: (1) current market quotations are readily available for such
securities; (2) the investor represents and agrees that all securities offered
to be exchanged are not subject to any restrictions upon their sale by the
Portfolio (or its corresponding Series) under the 1933 Act or under the laws of
the country in which the principal market for such securities exists, or
otherwise; (3) at the discretion of the Portfolio (or its corresponding Series),
the value of any such security (except U.S. Government securities) being
exchanged together with other securities of the same issuer owned by the
corresponding Series will not exceed 5% of the net assets of the corresponding
Series immediately after the transaction; and (4) the Portfolio (or its
corresponding Series) acquires the securities for investment and not for resale.
In addition, nearly all of the securities accepted in an exchange must be, at
the time of the exchange, eligible to be included in the Portfolio (or
corresponding Series) whose shares are issued. Investors interested in such
exchanges should contact the Manager.
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TAX MATTERS
The Internal Revenue Code of 1986, as amended (the "Code") imposes a
nondeductible 4% excise tax on a regulated investment company which does not
distribute to investors in each calendar year an amount equal to (i) 98% of its
calendar year ordinary income, (ii) 98% of its capital gain net income (the
excess of short and long-term capital gain over short and long-term capital
loss) for the one-year period ending each October 31, and (iii) 100% of any
undistributed ordinary income and capital gain net income from the prior year.
Each Portfolio intends to declare and pay dividends and capital gain
distributions in a manner to avoid imposition of the excise tax. Each Portfolio
also intends to comply with other Code requirements such as (1) appropriate
diversification of portfolio investments; (2) realization of 90% of annual gross
income from dividends, interest, gains from sales of securities, or other
"qualifying income".
For any Portfolio that has a principal investment policy of investing
in non-equity investments, it is anticipated that either none or only a small
portion of that Portfolio's dividends will qualify for the corporate dividends
received deduction. The portion of the dividends so qualified depends on the
aggregate qualifying dividend income received by a Portfolio from domestic
(U.S.) sources. To the extent that any Portfolio pays dividends which qualify
for this deduction, the availability of the deduction is subject to certain
holding period and debt financing restrictions imposed under the Code on the
corporation claiming the deduction.
The Fund in its sole discretion may accept securities in exchange for
shares of a Portfolio. A gain or loss for federal income tax purposes may be
realized by investors in a Portfolio who are subject to federal taxation upon
the exchange. The amount of such gain or loss realized with respect to a
security is measured by the difference between the fair market value of the
contributed security on the date of contribution and its adjusted tax basis. Any
loss realized on the exchange may be subject to certain provisions of the Code
which either disallow the recognition of any such loss or result in a deferral
of the time for recognizing such loss.
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CALCULATION OF PERFORMANCE DATA
The performance of a Portfolio's classes of shares (or its
corresponding Series) may be quoted in terms of its yield and its total return
in advertising and other promotional materials ("performance advertisements").
Performance data quoted represents past performance and is not intended to
indicate future performance. The investment return of an investment in the
Portfolios and the principal value of an investment in any Portfolio except the
Money Market Portfolio and the Government Money Market Portfolio will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost. Performance of the Portfolios will vary based on changes in
market conditions and the level of each Portfolio's expenses. These performance
figures are calculated in the following manner:
A. YIELD is the net annualized yield for a specified 7 calendar
days calculated at simple interest rates. From time to time,
the Money Market Portfolio and the Government Money Market
Portfolio may advertise their yields. Yield is calculated by
determining the net change, exclusive of capital changes, in
the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the value
of the account at the beginning of the base period to obtain
the base period return. The yield is annualized by multiplying
the base period return by 365/7. The yield figure is stated to
the nearest hundredth of one percent.
B. EFFECTIVE YIELD is the net annualized yield for a specified 7
calendar days assuming reinvestment of income or compounding.
From time to time the Money Market Portfolio and the
Government Money Market Portfolio may advertise their
effective yields. Effective yield is calculated by the same
method as yield except the yield figure is compounded by
adding 1, raising the sum to a power equal to 365 divided by
7, and subtracting 1 from the result, according to the
following formula:
Effective Yield = [(Base Period Return + 1) 365/7] - 1.
C. YIELD of the Intermediate-Term Bond Portfolio is calculated by
dividing each Portfolio's investment income for a 30-day
period, net of expenses, by the average number of shares
entitled to receive dividends during that period according to
the following formula:
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YIELD = 2[((A-B)/CD + 1)6-1]
Where:
a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends; and
d = the maximum offering price per share on the last day of
the period.
The result is expressed as an annualized percentage (assuming semiannual
compounding) of the maximum offering price per share at the end of the period.
Except as noted below, in determining interest earned during the period
(variable "a" in the above formula), the interest earned on each debt instrument
held by a Portfolio (or its corresponding Series) during the period is
calculated by: (i) computing the instrument's yield to maturity, based on the
value of the instrument (including actual accrued interest) as of the last
business day of the period or, if the instrument was purchased during the
period, the purchase price plus accrued interest; (ii) dividing the yield to
maturity by 360; and (iii) multiplying the resulting quotient by the value of
the instrument (including actual accrued interest). Once interest earned is
calculated in this fashion for each debt instrument held by the Portfolio (or
its corresponding Series), interest earned during the period is then determined
by totaling the interest earned on all debt instruments held by the Portfolio.
For purposes of these calculations, the maturity of a debt instrument
with one or more call provisions is assumed to be the next date on which the
instrument reasonably can be expected to be called or, if none, the maturity
date. In general, interest income is reduced with respect to debt instruments
trading at a premium over their par value by subtracting a portion of the
premium from income on a daily basis, and increased with respect to debt
instruments trading at a discount by adding a portion of the discount to daily
income.
Since yield accounting methods differ from the accounting methods used
to calculate net investment income for other purposes, a Portfolio's yield may
not equal the dividend income actually paid to investors or the net investment
income reported with respect to the Portfolio in the Fund's financial
statements.
Yield information may be useful in reviewing a Portfolio's performance
and in providing a basis for comparison with other investment alternatives.
Nevertheless, the Portfolios' yields fluctuate, unlike investments that pay a
fixed interest rate over a stated period of time. Investors should recognize
that in periods of declining interest rates, the Portfolios' yields will tend to
be somewhat higher than prevailing market rates, and in
19
<PAGE>
periods of rising interest rates, the Portfolios' yields will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net new
money to the Portfolios from the continuous sale of their shares will likely be
invested in instruments producing lower yields than the balance of the
Portfolios' holdings, thereby reducing the current yields of the Portfolios. In
periods of rising interest rates, the opposite can be expected to occur.
D. AVERAGE ANNUAL TOTAL RETURN is the average annual compound
rate of return for the periods of one year, five years, ten
years and the life of a Portfolio, where quotations reflect
changes in the price of a Portfolio's shares, if any, and
assume that all dividend and capital gains distributions, if
any, during the respective periods were reinvested in
Portfolio shares. Each Portfolio may advertise its average
annual total return from time to time. Average annual total
return is calculated by finding the average annual compound
rates of return of a hypothetical investment over such
periods, according to the following formula (average annual
total return is then expressed as a percentage):
P (1 + T)n = ERV
Where: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the value, at
the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
E. CUMULATIVE TOTAL RETURN is the cumulative rate of return on a
hypothetical initial investment of $1,000 for a specified
period. Cumulative total return quotations reflect the change
in the price of a Portfolio's shares, if any, and assume that
all dividends and capital gains distributions, if any, during
the period were reinvested in Portfolio shares. Cumulative
total return is calculated by finding the cumulative rates of
return of a hypothetical investment over such periods,
according to the following formula (cumulative total return is
then expressed as a percentage):
20
<PAGE>
C = (ERV/P) - 1
Where: C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value, at
the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
Performance advertisements for the Money Market Portfolio and the
Government Money Market Portfolio may include yield calculations for the 7-day
period ending on the most recent practicable date considering the media used for
the advertisement. Performance advertisements for the other four Portfolios may
include average annual total returns and 30-day yield calculations as of the end
of the most recent quarter practicable considering the media used for the
advertisement. Such advertisements may include a schedule of investments for the
corresponding date, employing presentation principles used in annual reports to
shareholders.
To help investors better evaluate how an investment in a Portfolio
might satisfy their investment objective, advertisements regarding a Portfolio
may discuss yield or total return as reported by various financial publications.
Advertisements may also compare yield or total return to other investments,
indices and averages. The following publications, benchmarks, indices, and
averages may be used: Lipper Mutual Fund Performance Analysis; Lipper Fixed
Income Analysis; Lipper Mutual Fund Indices; Salomon Brothers Indices; Lehman
Brothers Indices; Dow Jones Composite Average or its component indices; Standard
& Poor's 500 Composite Stock Price Index (the "S&P 500") or its component
indices; The New York Stock Exchange composite or component indices; CDA Mutual
Fund Report; Weisenberger - Mutual Fund Panorama and Investment Companies;
Mutual Fund Values and Mutual Fund Service Book, published by Morningstar, Inc.;
and financial publications such as BUSINESS WEEK, KIPLINGER'S PERSONAL FINANCE,
FINANCIAL WORLD, FORBES, FORTUNE, MONEY MAGAZINE, THE WALL STREET JOURNAL,
Barron's, et al., which rate mutual fund performance over various time periods.
Currently the performance of the Kiewit Money Market Portfolio and the
Government Money Market Portfolio may be compared to the performance of IBC's
Money Fund Average. The IBC's Money Fund Average is a composition of all
reporting money market funds with similar objectives and restrictions. The
Lehman 1-3 Year Government Index is a total return performance benchmark
consisting of U.S. Government agency and Treasury securities with maturities
from one to three years. The Kiewit Intermediate-Term Bond Portfolio is
currently compared to the Lehman
21
<PAGE>
Intermediate Corporate Index. The Lehman Intermediate Corporate Index is a total
return performance benchmark consisting of publicly issued corporate debt issues
rated at least investment grade with maturities from one to ten years. The
Lehman 5-Year Municipal Bond Index is a total return performance benchmark
consisting of tax-exempt municipal bonds rated at least investment grade with
maturities from four to six years. The Kiewit Equity Portfolio is currently
compared to the S&P 500. The S&P 500 is an unmanaged capitalization weighted
index of five hundred publicly traded stocks.
OTHER INFORMATION
The Fund does not intend to hold annual meetings; it may, however,
hold a meeting for such purposes as changing fundamental investment limitations,
approving a new investment management agreement or any other matters which are
required to be acted on by shareholders under the 1940 Act. Shareholders may
receive assistance in communicating with other shareholders in connection with
the election or removal of Trustees similar to the provisions contained in
Section 16(c) of the 1940 Act.
PNC Bank, NA, 1600 Market Street, Philadelphia, PA 19103 serves as the
Fund's custodian.
PricewaterhouseCoopers LLP, Thirty South 17th Street, Philadelphia,
Pennsylvania 19103, serves the Fund's independent accountants.
FINANCIAL STATEMENTS
The audited financial statements and the financial highlights for the
Fund for its fiscal year ended June 30, 1998, as set forth in the Fund's annual
report to shareholders, and the report thereon of PricewaterhouseCoopers LLP,
the Fund's independent accountants, also appearing in the Fund's annual report,
are incorporated herein by reference. The audited financial statements for the
Series of Kiewit Investment Trust for the fiscal year ended June 30, 1998 as set
forth in the Trust's annual report to shareholders and the report thereon of
PricewaterhouseCoopers LLP, the Trust's independent accountant, also appearing
therein are incorporated by reference. A shareholder may obtain a copy of these
reports upon request and without charge by contacting the Fund. With reference
to the fiscal year ended June 30, 1995, see the report of independent
accountants included in the Fund's registration statement and which is available
upon request, without charge, by writing or calling the Fund at 400 Bellevue
Parkway, Suite 108, Wilmington, DE 19809, (800) 254-3948.
22
<PAGE>
KIEWIT MUTUAL FUND
Items Required By Form N-1A
PART C - OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
Included in the Prospectus (Part A):
Financial Highlights for Kiewit Mutual Fund for the
Period Ended June 30, 1998.
Included in Part B:
(i) Report of Independent Public Accountants dated
July 31, 1998*
(ii) Audited Financial Statements of Kiewit Money
Market Portfolio for the Period Ended June 30,
1998*
(iii) Audited Financial Statements of Kiewit
Short-Term Government Portfolio for the Period
Ended June 30, 1998*
(iv) Audited Financial Statements of Kiewit
Intermediate-Term Bond Portfolio for the Period
Ended June 30, 1998*
(v) Audited Financial Statements of Kiewit
Tax-Exempt Portfolio for the Period Ended June
30, 1998*
(vi) Audited Financial Statements of Kiewit Equity
Portfolio for the Period Ended June 30, 1998*
The audited financial statements of Kiewit Investment
Trust for the fiscal period ended June 30, 1998,as set forth in its annual
report to shareholders, were filed with the SEC via EDGAR on September 2, 1998
and are incorporated by reference into the Fund's Part B.
* Incorporated by reference to the Fund's annual report
to shareholders for the fiscal year ended June 30, 1998, filed via EDGAR on
September 2, 1998.
1
<PAGE>
(b) Exhibits:
Exhibit No. Description of Exhibit
----------- ----------------------
(1) (i) Agreement and Declaration of Trust*
(ii) Certificate of Trust*
(iii) Certificate of Amendment to Certificate of
Trust**
(2) By-Laws*
(3) None
(4) Not applicable
(5) Form of Investment Management Agreement
between Kiewit Investment Trust, on behalf
of its Series and Wilmington Trust Company.
(6) Distribution Agreement with Provident Distributors,
Inc. dated February 25, 1998 filed herewith
(7) None
(8) Custody Agreement with Wilmington Trust Company*
(9) (i) Transfer Agency Agreement with Rodney Square
Management Corporation dated February 19,
1997**
(ii) Accounting Services Agreement with Rodney
Square Management Corporation dated February
19, 1997**
(iii) Administration Agreement with Rodney Square
Management Corporation dated February 19,
1997**
(iv) Administrative Services Agreements with
Kiewit Investment Management Corp. dated
February 19, 1997**
(v) Assignment Agreement dated January 5, 1998,
among the Registrant, Rodney Square
Management Corporation and PFPC Inc. with
respect to the Administration Agreement filed
herewith
(vi) Assignment Agreement dated January 5, 1998,
among the Registrant, Rodney Square
management Corporation and PFPC Inc. with
respect to the Accounting Services Agreement
filed herewith
(vii) Assignment Agreement dated January 5, 1998,
among the Registrant, Rodney Square
management Corporation and PFPC Inc. with
respect to the Transfer Agency Agreement
filed herewith
(10) Not applicable
2
<PAGE>
(11) (i) Consent of Independent Accountants filed
herewith.
(12) Not applicable
(13) Not applicable
(14) Not applicable
(15) Plan of Distribution Pursuant to Rule 12b-1 under the
Investment Company Act of 1940, effective March 3,
1997**
(16) Schedule of Performance Calculations***
(17) Financial Data Schedules filed herewith
(18) Plan Pursuant to Rule 18f-3 under the Investment
Company Act of 1940 dated February 19, 1997**
(19) Secretary's Certificate and Power of Attorney**
* Previously filed with the Securities and Exchange Commission on Form
N-1A on July 25, 1994 and incorporated herein by reference.
** Previously filed with the Securities and Exchange Commission with
Post-Effective Amendment No. 4 on Form N1-A on February 28, 1997 and
incorporated herein by reference.
*** Previously filed with the Securities and Exchange Commission with
Post-Effective Amendment No. 2 on Form N1-A on September 30, 1996 and
incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
Number of Record Holders
K Class Shares as of August 31, 1998
-------------- ------------------------
Shares of Beneficial Interest, Par Value $.01
---------------------------------------------
Kiewit Money Market Portfolio 145
-----
Kiewit Intermediate-Term Bond Portfolio 19
-----
3
<PAGE>
Kiewit Equity Portfolio 48
-----
ITEM 27. INDEMNIFICATION.
Reference is made to Article VII of the Registrant's Agreement and Declaration
of Trust (Exhibit 24(b)(1)(i)) and to Article X of the Registrant's By-Laws
(Exhibit 24(b)(2)), which are incorporated herein by reference. Pursuant to Rule
484 under the Securities Act of 1933, as amended, the Registrant furnishes the
following undertaking:
"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 foregoing provisions, 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 the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, 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 expressed in the Act and will
be governed by the final adjudication of such issue."
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Wilmington Trust Company ("WTC"), a Delaware corporation, serves as investment
adviser to the Registrant. It currently manages large institutional accounts and
collective investment funds.
The directors and principal executive officer of the Adviser have held the
following positions of a substantial nature in the past two years:
<TABLE>
<CAPTION>
<S> <C>
Business or Other Connections of Principal Executive
Name Officers and Directors of Registrant's Adviser
- --------------------------------------------------------------------------------
Robert H. Bolling, Jr. Owner, R.H. Bolling, Jr. P.E. (consulting engineering firm)
Carolyn S. Burger President and Chief Executive Officer of Bell Atlantic-Delaware, Incorporated
Ted T. Cecala Chairman and Chief Executive Officer, Wilmington Trust Corporation and
Wilmington Trust Company
Richard R. Collins Chairman, Collins, Incorporated (consulting firm for various insurance
industry associations and financial and non-financial companies); Retired
President, American Life Insurance Company
Charles S. Crompton, Esq. Attorney, Partner, Potter Anderson & Corroon (law firm)
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Business or Other Connections of Principal Executive
Name Officers and Directors of Registrant's Adviser
- --------------------------------------------------------------------------------
H. Stewart Dunn, Jr., Esq. Attorney, Partner, Ivins, Phillips & Barker (law firm)
Edward B. du Pont Private investor; Director, E. I. du Pont de Nemours and Company,
Incorporated; Retired Chairman, Atlantic Aviation Corporation
Robert C. Forney Retired Executive Vice President and Director, E. I. Du Pont de Nemours and
Company, Incorporated
Thomas L. Gossage Chairman and Chief Executive Officer, Hercules Incorporated
Robert V.A. Harra, Jr. President and Treasurer, Wilmington Trust Corporation and Wilmington Trust
Company
Andrew B. Kirkpatrick, Of Counsel to, Morris, Nichols, Arsht & Tunnell (law firm)
Rex L. Mears President of Ray L. Mears & Sons, Inc. (farming corporation)
Hugh E. Miller Retired Executive, Formerly Vice Chairman, ICI Americas, Inc.; was with
parent Imperial Chemicals Industries PLC for 20 years until 1990 including
management positions in the United States and Europe
Stacey J. Mobley Senior Vice President of Communications, E. I. Du Pont de Nemours and
Company, Incorporated
Leonard W. Quill Formerly Chairman and Chief Executive Officer, Wilmington Trust Corporation
and Wilmington Trust Company
David P. Roselle President, University of Delaware
Thomas P. Sweeney, Esq. Attorney, Partner, Richards, Layton & Finger (law firm)
Bernard J. Taylor, II Retired Chairman and Chief Executive Officer, Wilmington Trust Corporation
and Wilmington Trust Company
Mary Jornlin Theisen Former New Castle County Executive
Robert W. Tunnell, Jr. Managing Partner of Tunnell Companies, L.P., owner and developer of real
estate
</TABLE>
ITEM 29 Investment companies for which Provident Distributors, Inc.
also acts as principal underwriter:
(a) Pacific Horizon Funds, Inc.
Time Horizon Funds
World Horizon Funds, Inc.
5
<PAGE>
Pacific Innovations Trust
International Dollar Reserve Fund I, Ltd.
Municipal Fund for Temporary Investment
Municipal Fund for New York Investors, Inc.
Municipal Fund for California Investors, Inc.
Temporary Investment Fund, Inc.
Trust for Federal Securities
Columbia Common Stock Fund, Inc.
Columbia Growth Fund, Inc.
Columbia International Stock Fund, Inc.
Columbia Special Fund, Inc.
Columbia Small Cap Fund, Inc.
Columbia Real Estate Equity Fund, Inc.
Columbia Balanced Fund, Inc.
Columbia Daily Income Company
Columbia U.S. Government Securities Fund, Inc.
Columbia Fixed Income Securities Fund, Inc.
Columbia Municipal Bond Fund, Inc.
Columbia High Yield Fund, Inc.
(b) Reference is made to the caption "Distributor" in the
Prospectuses constituting Part A of this Registration
Statement. The information required by this Item 29 with
respect to each director of the underwriter is incorporated
by reference to the Form BD filed by the Underwriter with
the Commission pursuant to the Securities Exchange Act of
1934, as amended under the File Number indicated:
Provident Distributors Inc. SEC File No. 8-46564
ITEM 30. LOCATIONS OF ACCOUNTS AND RECORDS
All accounts and records are maintained by the Registrant, or on its behalf by
the Fund's administrator, transfer agent, dividend paying agent and accounting
services agent, PFPC, Inc., 400 Bellevue Parkway, Wilmington, DE 19809.
ITEM 31. MANAGEMENT SERVICES.
There are no management-related service contracts not discussed in Part A or
Part B.
6
<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 Post-Effective
Amendment No. 6 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Omaha, state of Nebraska
on the 30th day of September, 1998.
KIEWIT MUTUAL FUND
BY: /s/ LIVINGSTON G. DOUGLAS*
Livingston G. Douglas, President*
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ LIVINGSTON DOUGLAS* President, Chief Financial Officer and September 30, 1998
Livingston G. Douglas* Chief Investment Officer
/s/ LAWRENCE B. THOMAS* Trustee September 30, 1998
Lawrence B. Thomas*
/s/ ROBERT H. ARNOLD* Trustee September 30, 1998
Robert H. Arnold*
/s/ STEPHEN A. SHARPE Trustee September 30, 1998
Stephen A. Sharpe
/s/ KENNETH E. STINSON Trustee September 30, 1998
Kenneth E. Stinson
</TABLE>
*By: /s/ KENNETH GASKINS
Kenneth Gaskins
Attorney-in-Fact
7
<PAGE>
EXHIBIT INDEX
(5) Form of Investment Management Agreement between Kiewit Investment
Trust, on behalf of its Series and Wilmington Trust Company.
(6) Distribution Agreement with Provident Distributors, Inc. dated
February 25, 1998 filed herewith
(9) (v) Assignment Agreement dated January 5, 1998, among the Registrant,
Rodney Square Management Corporation and PFPC Inc. with respect to
the Administration Agreement filed herewith
(vi) Assignment Agreement dated January 5, 1998, among the Registrant,
Rodney Square Management Corporation and PFPC Inc. with respect to
the Accounting Services Agreement filed herewith
(vii) Assignment Agreement dated January 5, 1998, among the Registrant,
Rodney Square Management Corporation and PFPC Inc. with respect to
the Transfer Agency Agreement filed herewith
(11) (i) Consent of Independent Accountants filed herewith.
(17) Financial Data Schedules
EXHIBIT 24(B)(5)
FORM OF
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this ____ day of __________, 1998, by and between
KIEWIT INVESTMENT TRUST, a Delaware business trust (the "Fund"), and WILMINGTON
TRUST COMPANY, a Delaware corporation (the "Manager").
1. DUTIES OF ADVISOR
-----------------
The Fund hereby employs the Manager to manage the investment and
reinvestment of the assets of the _____________________________ Series of the
Fund (the "Series"), to continuously review, supervise and administer the
Series' investment program, to determine in its discretion, and without prior
consultation with the Fund, the securities to be purchased or sold and the
portion of the Series' assets to be uninvested, to provide the Fund with records
concerning the Manager's activities which the Fund is required to maintain, and
to render regular reports to the Fund's officers and the Board of Trustees of
the Fund, all in compliance with the Series' investment objective, policies and
limitations set forth in the Fund's registration statement and applicable laws
and regulations. Subject to compliance with the requirements of the Investment
Company Act of 1940 (the "1940 Act"), the Manager may retain, at the Manager's
own expense, one or more sub-advisers to the Series. The Manager accepts such
employment and agrees to provide, at its own expense, the office space,
furnishings and equipment and the personnel required by it to perform the
services described herein on the terms and for the compensation provided herein.
1. SERIES TRANSACTIONS
-------------------
The Manager is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Series in
accordance with the policies with respect to portfolio transactions set forth in
the Fund's registration statement, and is directed to use its best efforts to
obtain the best available price and most favorable execution, except as
prescribed herein.
It is understood that neither the Fund nor the Manager will adopt a
formula for the allocation of Series brokerage. It is further understood that
the Manager may, in its discretion, use brokers who provide a Series with
research, analysis, advice and similar services to execute portfolio
transactions on behalf of the Series, and the Manager may pay to those brokers
in return for brokerage and research services a higher commission than may be
charged by other brokers, subject to the Manager determining in good faith that
such commission is reasonable in terms either of the particular transaction or
of the overall responsibility of the Manager to the Series and its other clients
and that the total
<PAGE>
commissions paid by such Series will be reasonable inrelation to the benefits to
the Series over the long term.
It is understood that the Manager may, to the extent permitted by
applicable laws and regulations, aggregate securities to be sold or purchased
for any Series and for other clients in order to obtain the most favorable price
and efficient execution. In that event, allocation of the securities purchased
or sold, as well as expenses incurred in the transaction, will be made by the
Manager in the manner it considers to be the most equitable and consistent with
its fiduciary obligations to the Fund and to its other clients.
The Manager will promptly communicate to the officers and trustees of
the Fund such information relating to transactions for the Series as they may
reasonably request.
1. COMPENSATION OF THE MANAGER
---------------------------
For the services to be rendered by the Manager as provided in Section
1 of this Agreement, the Fund shall pay to the Manager, at the end of each
month, a fee equal to one-twelfth of ___ percent of the daily average net assets
of the Series during the month. The value of net assets shall be determined in
accordance with definitions contained in the Fund's registration statement and
the applicable provisions of the 1940 Act. In the event that this Agreement is
terminated at other than a month-end, the fee for such month shall be prorated.
1. OTHER SERVICES
--------------
At the request of the Fund, the Manager, in its discretion, may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Manager and billed to the Fund at the Manager's
cost and, where applicable, the cost thereof shall, be apportioned among the
several Series of the Fund proportionate to their respective utilization
thereof.
1. REPORTS
-------
The Fund and the Manager agree to furnish to each other information
with regard to their respective affairs as each may reasonably request.
1. STATUS OF THE MANAGER
---------------------
The services of the Manager to the Fund or in respect of the Series,
are not to be deemed exclusive, and the Manager shall be free to render similar
services to others as long as its services to the Fund or in respect of the
Series, are not impaired thereby. The Manager shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
<PAGE>
1. LIABILITY OF MANAGER
--------------------
Except as provided below, in the absence of wilful misfeasance, bad
faith, gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Manager, the Manager shall not be subject to
liability to the Fund or to any shareholder of the Fund or its Series for any
act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security or the making of any investment for or on behalf of the
Series.
No provision of this Agreement shall be construed to protect any
Trustee or officer of the Fund, or the Manager, from liability in violation of
Sections 17(h), 17(i), 36(a) or 36 (b) of the 1940 Act.
1. PERMISSIBLE INTERESTS
---------------------
Subject to and in accordance with the Agreement and Declaration of
Trust of the Fund and the charter of the Manager, trustees, officers, and
shareholders of the Fund are or may be interested in the Manager (or any
successor thereof) as directors, officers or shareholders, or otherwise;
directors, officers, agents and shareholders of the Manager are or may be
interested in the Fund as trustees, officers, shareholders or otherwise; and the
Manager (or any successor) is or may be interested in the Fund as a shareholder
or otherwise and the effect of any such interrelationships shall be governed by
said agreement and declaration of trust and charter and the provisions of the
1940 Act.
1. DURATION AND TERMINATION
------------------------
This Agreement shall become effective on the date first written above
and shall continue in effect for a period of two years from such date, and
thereafter only if such continuance is approved at least annually by a vote of
the Fund's Board of Trustees, including the vote of a majority of the trustees
who are not parties to this Agreement or interested persons of any such party,
cast in person, at a meeting called for the purpose of voting on such approval.
In addition, the question of continuance of this Agreement may be presented to
the shareholders of the series; in such event, such continuance shall be
effected only if approved by the affirmative vote of the holders of a majority
of the outstanding voting securities of the series.
This Agreement may at any time be terminated without payment of any
penalty either by vote of the Board of Trustees of the Fund or by vote of the
holders of a majority of the outstanding voting securities of the Series, on
sixty days, written notice to the Manager.
This Agreement shall automatically terminate in the event of
its assignment.
<PAGE>
This Agreement may be terminated by the Manager after ninety days'
written notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party at any office of such
party.
As used in this Section 9, the terms "assignment," "interested
persons," and a "vote of the holders of a majority of the outstanding voting
securities" shall have the respective meanings set forth in Section 2(a)(4),
Section 2(a)(19) and Section 2(a)(42) of the 1940 Act and Rule 18f-2 thereunder.
1. SEVERABILITY
------------
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
11. GOVERNING LAW
-------------
To the extent that state law has not been preempted by the provisions
of any law of the United States heretofore or hereafter enacted, as the same may
be amended from time to time, this Agreement shall be administered, construed
and enforced according to the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to
be executed an of the day and year first written above.
WILMINGTON TRUST COMPANY
By:
KIEWIT INVESTMENT TRUST
By:
Livingston G. Douglas
President
EXHIBIT 24 (B) 6
KIEWIT MUTUAL FUND
PROVIDENT DISTRIBUTORS, INC.
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made this 25th day of February, 1998,
between Kiewit Mutual Fund, a Delaware business trust (the "Fund"), having its
principal place of business in Omaha Nebraska, and Provident Distributors, Inc.,
a corporation organized under the laws of the State of Delaware (the
"Distributor"), having its principal place of business in Wilmington, Delaware.
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company;
WHEREAS, the Fund is authorized to issue an unlimited number of shares
of beneficial interest ("Shares"), par value $0.01 per share, and has registered
certain of those duly authorized and issued Shares under the Securities Act of
1933 (the "1933 Act");
WHEREAS, the Fund is further authorized to issue separate series of
Shares ("Series"), each Series corresponding with a separate and distinct Fund
"Portfolio", each Share representing an undivided interest in the assets,
subject to the liabilities, allocated to a Portfolio, and each Portfolio having
a separate investment objective and separate investment policies;
WHEREAS, at the present time, the Fund consists of six Portfolios, each
planning to issue, pursuant to separate Prospectuses, two classes of Shares, a
"K Class" (subject to no sales or distribution charges) and a "S Class" (subject
to a distribution charge pursuant to Rule 12b-1 under the 1940 Act, as
stipulated in the Fund's S Class Prospectus);
WHEREAS, the Distributor is engaged in the business of promoting the
distribution of securities of investment companies, is registered as a
broker-dealer under the Securities Exchange Act of 1934 (the "1934 Act"), and is
a member in good standing of the National Association of Securities Dealers,
Inc. (the "NASD");
WHEREAS, the Fund wishes to employ the services of Distributor, with
such assistance from its affiliates as the latter may provide, for the purpose
of selling and distributing Shares within the K Class and the S Class of the
Fund's various Portfolios listed within Schedule A to this Agreement, such
employment to take effect as of the date first written above; and
WHEREAS, the Distributor wishes to provide distribution services to
the Fund as set forth below;
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties agree as follows:
1. SALE OF SHARES. During the term of this Agreement the Fund grants to
the Distributor the right to sell on its behalf Shares of both the K Class and
the S Class of each of the Portfolios listed on Schedule A hereto, subject to
the registration requirements of the 1933 Act, and of the laws governing the
sale of securities in various states (the "Blue Sky Laws"), under the terms and
conditions set forth herein. In connection therewith, the Distributor (i) shall
have
A-1
<PAGE>
the right to sell, as agent on behalf of the Fund, Shares authorized for issue
and registered under the 1933 Act; and (ii) shall sell such Shares only in
compliance with the terms set forth in the Fund's then currently effective
registration statement, with the Plan of Distribution of the Fund as may be in
effect from time to time for any Portfolio, and with any limitations as may be
imposed from time to time by the Board of Trustees of the Fund. The Distributor
is not obligated to sell any specific number of shares.
2. SELLING DEALER AGREEMENTS. Subject to the supervisory authority of
the Fund's Board of Trustees, the Distributor may enter into selling dealer
agreements with selected dealers and others ("Selling Dealers") for the
provision of distribution services related to the sale of Fund Shares as well as
other shareholder services as may be agreed by the affected parties. In entering
into such selling agreements, the Distributor will act only on its own behalf,
as principal.
3. SALE OF SHARES BY THE FUND. The rights granted to the Distributor
shall be non-exclusive in that the Fund reserves the right to sell its Shares to
investors on applications received and accepted by the Fund. Further, the Fund
reserves the right to issue Shares in connection with (a) the merger or
consolidation of the assets of, or acquisition by the Fund through purchase or
otherwise, with any other investment company, trust or personal holding company;
(b) the payment or reinvestment of dividends or distributions; or (c) any offer
of exchange permitted by Section 11 of the 1940 Act.
4. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to all
Shares within the K Class and the S Class of all Portfolios of the Fund listed
upon Schedule A; all such Shares held in the Fund's treasury in the event that
(in the discretion of the Fund) treasury shares shall be sold; and all such
Shares repurchased by the Fund for resale.
5. PUBLIC OFFERING PRICE. Except as otherwise noted in the Fund's
current Prospectus (the "Prospectus") or Statement of Additional Information
(the "SAI") with respect to each Portfolio, all Shares sold to investors by the
Distributor or the Fund will be sold at the public offering price without a
sales load. The public offering price for all accepted subscriptions will be the
net asset value per Share, determined in the manner described in the Fund's
current Prospectus or SAI with respect to the applicable Portfolio. The Fund
shall in all cases receive the net asset value per Share on all such sales.
6. SUSPENSION OF SALES. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further orders
for Shares shall be processed by the Distributor except such unconditional
orders placed with the Distributor before it had knowledge of the suspension. In
addition, the Fund reserves the right to suspend sales and the Distributor's
authority to process orders for Shares on behalf of the Fund if, in the judgment
of the Fund, it is in the best interests of the Fund to do so. Suspension will
continue for such period as may be determined by the Fund. In addition, the Fund
and Distributor reserve the right to reject any purchase order.
7. SOLICITATION OF SALES. In consideration of these rights granted to
the Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for Shares of the Fund.
This shall not prevent the Distributor from entering into like arrangements
(including arrangements involving the payment of underwriting commissions) with
other issuers.
A-2
<PAGE>
8. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized by
the Fund to give any information or to make any representations other than those
contained in the appropriate registration statements, Prospectuses or SAI's
filed with the Securities and Exchange Commission under the 1933 Act and
applicable Blue Sky Laws (as those registration statements, Prospectuses and
SAI's may be amended from time to time), or contained in shareholder reports or
other material that may be prepared by or on behalf of the Fund for the
Distributor's use. This shall not be construed to prevent the Distributor from
preparing and distributing, in compliance with applicable laws and regulations,
sales literature or other material as it may deem appropriate. Distributor will
furnish or cause to be furnished copies of such sales literature or other
material to the President of the Fund or his or her designee and will provide
that designee with a reasonable opportunity to comment on it. Distributor agrees
to take appropriate action to cease using such sales literature or other
material to which the Fund reasonably objects as promptly as practicable after
receipt of the objection.
9. REGISTRATION OF SHARES. The Fund agrees that it will take all
action necessary to register shares of beneficial interest of the Fund under the
1933 Act (subject to necessary approval, if any, of its shareholders) so that
there will be available for sale the number of Shares the Distributor may
reasonably be expected to sell. The Fund shall furnish to the Distributor copies
of all information, financial statements and other papers which the Distributor
may reasonably request for use in connection with the distribution of Shares of
each Portfolio of the Fund.
10. REPURCHASE OF SHARES. The Distributor as agent and for the account
of the Fund may repurchase Shares offered for resale to it and redeem such
Shares at their net asset value.
11. EXPENSES, COMPENSATION AND REIMBURSEMENT.
(a) The Fund shall pay all fees and expenses:
(i) in connection with the preparation,
setting in type and filing of any registration
statement, Prospectus and SAI under the 1933 Act, and
any amendments thereto, for the registration of its
Shares;
(ii) in connection with the qualification of
Shares for sale in the various states in which the
Fund's Board of Trustees shall determine it advisable
to qualify such shares for sale (including
registering the Fund or Portfolios as a broker or
dealer, or any officer of the Fund as agent or
salesperson, in any state);
(iii) of preparing, setting in type,
printing and mailing any report or other
communication to shareholders of the Fund in their
capacity as such; and
(iv) of preparing, setting in type, printing
and mailing Prospectuses, SAI's, and any supplements
thereto, sent to existing shareholders.
(b) The Distributor shall pay costs of:
A-3
<PAGE>
(i) printing and distributing Prospectuses,
SAI's and reports prepared for its use in connection
with the offering of Shares for sale to the public;
(ii) any other literature used in connection
with such offering;
(iii) advertising in connection with such
offering including, but not limited to the following:
public relations services, sales presentations, media
charges, preparation, printing and mailing of
advertising and sales literature, data processing
necessary to support a distribution effort, printing
and mailing prospectuses and distribution and
shareholder servicing activities of brokers/dealers
and other financial institutions; and
(iv) filing fees required by regulatory
authorities for sales literature and advertising
materials and any additional out-of-pocket expenses
incurred in connection with these and any other costs
of distribution.
(c) In addition to the services described above, Distributor
will provide services including assistance in the production
of marketing and advertising materials for the sale of Shares
of the Fund and their review for compliance with applicable
regulatory requirements.
(d) In connection with the services to be provided by the
Distributor under this Agreement, the Distributor shall
receive:
(i) from the Fund, in connection with the
sale and distribution of the Fund's S Class Shares,
such payments as shall be authorized to be paid by
the Fund pursuant to any Plan of Distribution adopted
by the Fund in accordance with Rule 12b-1 under the
1940 Act; and
(ii) from the Fund's Investment Adviser,
reimbursement for fees and expenses incurred by the
Distributor in connection with the sale and
distribution of the Fund's K Class Shares to include,
without limitation, fees and expenses detailed in
Section 11(b) above.
12. INDEMNIFICATION.
(a) The Fund agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each
person, if any, who controls the Distributor within the
meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense (including the reasonable
cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel
fees incurred in connection therewith) arising by reason of
any person acquiring any shares of beneficial interest of the
Fund, based upon
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<PAGE>
the 1933 Act or any other statute or common law, alleging any
wrongful act of the Fund or any of its employees or
representatives, or based upon the grounds that the
registration statements, Prospectuses, SAI's, shareholder
reports or other information filed or made public by the Fund
(as from time to time amended) included an untrue statement of
a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not
misleading. However, the Fund does not agree to indemnify the
Distributor or hold it harmless to the extent that the
statement or omission was made in reliance upon, and in
conformity with, information furnished to the Fund in writing
by or on behalf of the Distributor. In no case (i) is the
indemnity of the Fund in favor of the Distributor or any
person indemnified to be deemed to protect the Distributor or
any person against any liability to the Fund or its security
holders to which the Distributor or any person against any
liability to the Fund or its security holders to which the
Distributor or such person would otherwise be subject by
reason of willful misfeasance, bad faith or ordinary
negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Fund to be liable under its
indemnity agreement contained in this Section 12(a) with
respect to any claim made against the Distributor or any
person indemnified unless the Distributor or person, as the
case may be, shall have notified the Fund in writing of the
claim within a reasonable time after the summons or other
first written notification giving information of the nature of
the claim shall have been served upon the Distributor or any
such person or after the Distributor or such person shall have
received notice of service on any designated agent. However,
except to the extent the Fund is harmed thereby, failure to
notify the Fund of any claim shall not relieve the Fund from
any liability which it may have to the Distributor or any
person against whom such action is brought other than on
account of its indemnity agreement contained in this Section
12(a). The Fund shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the
Fund elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the
Distributor, or person or persons, defendant or defendants in
the suit. In the event the Fund elects to assume the defense
of any suit and retain counsel, the Distributor, officers or
trustees or controlling person(s) or defendant(s) in the suit,
shall bear the fees and expenses of any additional counsel
retained by them. If the Fund does not elect to assume the
defense of any suit, it will reimburse the Distributor,
officers or trustees or controlling person(s) or defendant(s)
in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Fund agrees to notify the
Distributor promptly of the commencement of any litigation or
proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of the Shares.
(b) The Distributor also covenants and agrees that it will
indemnify and hold harmless the Fund and each of its trustees
and officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the 1933 Act, against any
loss, liability, damages, claim or expense (including the
reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable
counsel fees incurred in connection therewith) arising by
reason of any person acquiring any Shares, based upon the 1933
Act or any other statute
A-5
<PAGE>
or common law, alleging any wrongful act of the Distributor or
any of its employees or representatives, or alleging that the
registration statements, Prospectuses, SAI's, shareholder
reports or other information filed or made public by the Fund
(as from time to time amended) included an untrue statement of
a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not
misleading, insofar as the statement or omission was made in
reliance upon, and in conformity with, information furnished
in writing to the Fund by or on behalf of the Distributor. In
no case (i) is the indemnity of the Distributor in favor of
the Fund or any person indemnified to be deemed to protect the
Fund or any person against any liability to which the Fund or
such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement
contained in this Section 12(b) with respect to any claim made
against the Fund or any person indemnified unless the Fund or
person, as the case may be, shall have notified the
Distributor in writing of the claim within a reasonable time
after the summons or other first written notification giving
information of the nature of the claim shall have been served
upon the Fund or any such person or after the Fund or such
person shall have received notice of service on any designated
agent. However, failure to notify the Distributor of any claim
shall not relieve the Distributor from any liability which it
may have to the Fund or any person against whom the action is
brought other than on account of its indemnity agreement
contained in this Section 12(b). In the case of any notice to
the Distributor, it shall be entitled to participate, at its
own expense, in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any claims, but if
the Distributor elects to assume the defense, the defense
shall be conducted by counsel chosen by it and satisfactory to
the Fund, to its officers and trustees and to any controlling
person(s) or any defendant(s) in the suit. In the event the
Distributor elects to assume the defense of any suit and
retain counsel, the Fund or controlling person(s) or any
defendant(s) in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor
does not elect to assume the defense of any suit, it will
reimburse the Fund, its officers or Trustees, controlling
person(s) or defendant(s) in the suit, for the reasonable fees
and expenses of any counsel retained by them. The Distributor
agrees to notify the Fund promptly of the commencement of any
litigation or proceedings against it in connection with the
issue and sale of any of the Shares.
13. LIABILITY OF THE DISTRIBUTOR. The Distributor shall not be liable
for any damages or loss suffered by the Fund in connection with the matters to
which this Agreement relates, except for damage or loss resulting from the
willful misfeasance, bad faith or gross negligence on the Distributor's part in
the performance, or reckless disregard, of its duties under this Agreement. Any
person, even though also an officer, partner, employee or agent of the
Distributor, or any of its affiliates, who may be or become an officer of the
Fund, shall be deemed, when rendering services to or acting on any business of
the Fund in any such capacity (other than services or business in connection
with the Distributor's duties under this Agreement), to be rendering such
services to or acting solely for the Fund and not as an officer,
A-6
<PAGE>
partner, employee or agent or one under the control or direction of the
Distributor or any of its affiliates, even if paid by the Distributor or an
affiliate thereof.
14. ACTS OF GOD, ETC. The Distributor shall not be liable for any
delays or errors occurring by reason of circumstances not reasonably foreseeable
and beyond its control, including but not limited to acts of civil or military
authority, national emergencies, work stoppages, fire, flood, catastrophe, acts
of God, insurrection, war, riot or failure of communication or power supply. In
addition, in the event of equipment breakdowns which are (i) beyond the
reasonable control of the Distributor and (ii) not primarily attributable to the
failure of the Distributor to reasonably maintain or provide for the maintenance
of such equipment, the Distributor shall, at no additional expense to the Fund,
take reasonable steps in good faith to minimize service interruptions but shall
have no liability with respect thereto.
15. EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become
effective as of the date first written above, and unless terminated as provided,
shall continue in force for two (2) years from the date of its execution and
thereafter from year to year, provided continuance is approved at least annually
by either (i) the vote of a majority of the trustees of the Fund, or by the vote
of a majority of the outstanding voting securities of the Fund, and (ii) the
vote of a majority of those trustees of the Fund who are not interested persons
of the Fund and who are not parties to this Agreement or interested persons of
any party, cast in person at a meeting called for the purpose of voting on the
approval. This Agreement shall automatically terminate in the event of its
assignment. As used in this Section 15, the terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested person" shall have
the respective meanings specified in the 1940 Act and the rules enacted
thereunder as not in effect or as hereafter amended. In addition to termination
by failure to approve continuance or by assignment, this Agreement may at any
time be terminated without the payment of any penalty by note of a majority of
the trustees of the Fund who are not interested persons of the Fund, or by vote
of a majority of the outstanding voting securities of the Fund, on not more than
sixty (60) days' written notice to the Fund. This Agreement may be terminated by
the Distributor upon not less than sixty (60) days' prior written notice to the
Fund.
16. AMENDMENT. The Distributor and the Fund shall regularly consult
with each other regarding Distributor's performance of its obligations and its
compensation under the foregoing provisions. In connection therewith, the Fund
shall submit to Distributor at a reasonable time in advance of filing with the
SEC copies of any amended or supplemented registration statement of the Fund
(including exhibits) under the 1933 Act, and the 1940 Act, and, a reasonable
time in advance of their proposed use, copies of any amended or supplemented
forms relating to any plan, program or service offered by the Fund. Any change
in such materials that would require any change in Distributor's obligations
under the foregoing provisions shall be subject to the burdened party's
approval, which shall not be unreasonably withheld. In the event that a change
in such documents or in the procedures contained therein increases the cost or
potential liability to the Distributor in performing its obligations hereunder
by more than an insubstantial amount, Distributor shall be entitled to receive
reasonable compensation therefor.
This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent of the party of the Fund shall have been
approved (i) by the Trustees of the Fund, or by a vote of a majority of the
outstanding voting securities of the Fund, and (ii) by vote of a majority of the
Trustees of the Fund who are not interested persons of the Distributor or of the
Fund cast in person at a meeting called for the purpose of voting on such
amendment.
A-7
<PAGE>
17. NOTICE. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail, postage
prepared, to the other party to this Agreement at its principal place of
business.
18. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
19. GOVERNING LAW. To the extent that state law has not been preempted
by the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws (without regard,
however, to laws as to conflicts of law) of the State of Delaware.
20. SHAREHOLDER LIABILITY. Distributor acknowledges that it has
received notice of and accepts the limitations of liability set forth in the
Fund's Agreement and Declaration of Trust. Distributor agrees that the Fund's
obligations hereunder shall be limited to the Fund, and that Distributor shall
have recourse solely against the assets of the Portfolio with respect to which
the Fund's obligations hereunder related and shall have no recourse against the
assets of any other Portfolio or against any shareholder, Trustee, officer,
employee, or agent of the Fund.
21. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. 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. This Agreement may be executed in two
counterparts, each of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
KIEWIT MUTUAL FUND
By: /s/ LIVINGSTON G. DOUGLAS
Livingston G. Douglas, President
PROVIDENT DISTRIBUTORS, INC.
By: /s/ MONROE HAEGELE
Acknowledgment as to reimbursement of fees and
expenses incurred by Provident Distributors, Inc.
as Distributor of the Fund's K Class Shares:
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<PAGE>
KIEWIT INVESTMENT MANAGEMENT CORP.
as Investment Advisor
By: /s/ LIVINGSTON DOUGLAS
Date: February 25, 1998
A-9
<PAGE>
DISTRIBUTION AGREEMENT
SCHEDULE A
KIEWIT MUTUAL FUND
PORTFOLIO LISTING
Kiewit Money Market Portfolio
Kiewit Government Money Market Portfolio
Kiewit Short-Term Government Portfolio
Kiewit Intermediate-Term Bond Portfolio
Kiewit Tax-Exempt Portfolio
Kiewit Equity Portfolio
A-10
EXHIBIT 24 (B) (9) (V)
ASSIGNMENT AGREEMENT
This Agreement is entered into as of January 5, 1998 by and among
Kiewit Mutual Fund (the "Fund"), Rodney Square Management Corporation ("RSMC")
and PFPC Inc. ("PFPC").
WHEREAS, the Fund and RSMC entered into an Administration Agreement
(the "Fund Agreement") as of February 19, 1997 pursuant to which RSMC provides
certain services to the Fund as described therein;
WHEREAS, RSMC and PFPC have reached an agreement pursuant to which
RSMC will sell its mutual fund servicing business to PFPC;
WHEREAS, RSMC wishes to assign its right, title and interest in and
under the Fund Agreement and its duties and obligations under the Fund Agreement
to PFPC, and such assignment is acceptable to the Fund;
NOW THEREFORE, the parties hereto, in consideration of the premises
and agreements contained herein, and intending to be legally bound hereby, agree
as follows:
1. ASSIGNMENT. RSMC hereby assigns all of its right, title and
interest in and under the Fund Agreement, and its duties and obligations under
the Fund Agreement arising from the date hereof, to PFPC. PFPC hereby accepts
such assignment.
2. ACCEPTANCE BY FUND. The Fund hereby accepts and agrees to the
assignment described in Section 1 hereof.
3. FUND AGREEMENT. The Fund Agreement shall remain unchanged except as
is consistent with the provisions hereof.
4. GOVERNING LAW. This Agreement shall be governed by Delaware law,
without regard to principles of conflicts of law.
5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
6. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The facsimile signature
of any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
7. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as may be necessary to effectuate the purposes
hereof.
<PAGE>
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the day and year first above written.
KIEWIT MUTUAL FUND RODNEY SQUARE MANAGEMENT
CORPORATION
By: /s/ L. G. DOUGLAS By: /s/ ROBERT ANDERSON
Title: Chief Financial Officer Title: V.P. and Treasurer
PFPC INC.
By: /s/ J. RICHARD CARNALL
Title: Chairman
EXHIBIT 24 (B) (9) (VI)
ASSIGNMENT AGREEMENT
This Agreement is entered into as of January 5, 1998 by and among
Kiewit Mutual Fund (the "Fund"), Rodney Square Management Corporation ("RSMC")
and PFPC Inc. ("PFPC").
WHEREAS, the Fund and RSMC entered into an Accounting Services
Agreement (the "Fund Agreement") as of February 19, 1997 pursuant to which RSMC
provides certain services to the Fund as described therein;
WHEREAS, RSMC and PFPC have reached an agreement pursuant to which
RSMC will sell its mutual fund servicing business to PFPC;
WHEREAS, RSMC wishes to assign its right, title and interest in and
under the Fund Agreement and its duties and obligations under the Fund Agreement
to PFPC, and such assignment is acceptable to the Fund;
NOW THEREFORE, the parties hereto, in consideration of the premises
and agreements contained herein, and intending to be legally bound hereby, agree
as follows:
1. ASSIGNMENT. RSMC hereby assigns all of its right, title and
interest in and under the Fund Agreement, and its duties and obligations under
the Fund Agreement arising from the date hereof, to PFPC. PFPC hereby accepts
such assignment.
2. ACCEPTANCE BY FUND. The Fund hereby accepts and agrees to the
assignment described in Section 1 hereof.
3. FUND AGREEMENT. The Fund Agreement shall remain unchanged except as
is consistent with the provisions hereof.
4. GOVERNING LAW. This Agreement shall be governed by Delaware law,
without regard to principles of conflicts of law.
5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
6. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The facsimile signature
of any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
7. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as may be necessary to effectuate the purposes
hereof.
<PAGE>
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the day and year first above written.
KIEWIT MUTUAL FUND RODNEY SQUARE MANAGEMENT
CORPORATION
By: /s/ L. G. DOUGLAS By: /s/ ROBERT ANDERSON
Title: Chief Financial Officer Title: V.P. and Treasurer
PFPC INC.
By: /s/ J. RICHARD CARNALL
Title: Chairman
EXHIBIT 24 (B) (9) (VII)
ASSIGNMENT AGREEMENT
This Agreement is entered into as of January 5, 1998 by and among
Kiewit Mutual Fund (the "Fund"), Rodney Square Management Corporation ("RSMC")
and PFPC Inc. ("PFPC").
WHEREAS, the Fund and RSMC entered into a Transfer Agency Agreement
(the "Fund Agreement") as of February 19, 1997 pursuant to which RSMC provides
certain services to the Fund as described therein;
WHEREAS, RSMC and PFPC have reached an agreement pursuant to which
RSMC will sell its mutual fund servicing business to PFPC;
WHEREAS, RSMC wishes to assign its right, title and interest in and
under the Fund Agreement and its duties and obligations under the Fund Agreement
to PFPC, and such assignment is acceptable to the Fund;
NOW THEREFORE, the parties hereto, in consideration of the premises
and agreements contained herein, and intending to be legally bound hereby, agree
as follows:
1. ASSIGNMENT. RSMC hereby assigns all of its right, title and
interest in and under the Fund Agreement, and its duties and obligations under
the Fund Agreement arising from the date hereof, to PFPC. PFPC hereby accepts
such assignment.
2. ACCEPTANCE BY FUND. The Fund hereby accepts and agrees to the
assignment described in Section 1 hereof.
3. FUND AGREEMENT. The Fund Agreement shall remain unchanged except as
is consistent with the provisions hereof.
4. GOVERNING LAW. This Agreement shall be governed by Delaware law,
without regard to principles of conflicts of law.
5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
6. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The facsimile signature
of any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
7. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as may be necessary to effectuate the purposes
hereof.
<PAGE>
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the day and year first above written.
KIEWIT MUTUAL FUND RODNEY SQUARE MANAGEMENT
CORPORATION
By: /s/ L. G. DOUGLAS By: /s/ ROBERT ANDERSON
Title: Chief Financial Officer Title: V.P. and Treasurer
PFPC INC.
By: /s/ J. RICHARD CARNALL
Title: Chairman
EXHIBIT 24(B) (11) (i)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statement of
Additional Information constituting parts of this Post-Effective Amendment No. 6
to the registration statement on Form N-1A (the "Registration Statement") of our
report dated July 31, 1998, relating to the financial statements and financial
highlights appearing in the June 30, 1998 Annual Report to Shareholders of
Kiewit Mutual Fund, which are also incorporated by reference into the
Registration Statement. We also consent to the reference to us under the heading
"Financial Statements" in the Statement of Addtional Information.
PricewaterhouseCoopers LLP
Philadelphia, Pa
September 29, 1998
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
<ARTICLE> 6
<CIK> 0000927413
<NAME> KIEWIT MUTUAL FUND
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<NAME> MONEY MARKET PORTFOLIO
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
<ARTICLE> 6
<CIK> 0000927413
<NAME> KIEWIT MUTAL FUND
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
<ARTICLE> 6
<CIK> 0000927413
<NAME> KIEWIT MUTUAL FUND
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
<ARTICLE> 6
<CIK> 0000927413
<NAME> KIEWIT MUTUAL FUND
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
<ARTICLE> 6
<CIK> 0000927413
<NAME> KIEWIT MUTUAL FUND
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