As filed with the Securities and Exchange Commission on February 28, 1996
Securities Act Registration No. 33-88756
Investment Company Act Registration No. 811-8958
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 x
Pre-Effective Amendment No.
---
Post-Effective Amendment No. 2 x
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 x
Amendment No. 2 x
(Check appropriate box or boxes.)
THE JEFFERSON FUND GROUP TRUST
----------------------------------------------------
(Exact name of Registrant as Specified in Charter)
233 S. Wacker Drive, Suite 4500
Chicago, Illinois 60606
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(Address of Principal Executive Offices) (Zip Code)
(800) 216-9786
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(Registrant's Telephone Number, including Area Code)
Copy to:
Keith Pinsoneault Scott E. Early
Rodman & Renshaw, Inc. Foley & Lardner
233 S. Wacker Drive, Suite 4500 330 North Wabash Avenue, Suite 3300
Chicago, Illinois 60606 Chicago, Illinois 60611
- ------------------------------- --------------------------------------
(Name and Address of Agent for Service)
Registrant has registered an indefinite number or amount of shares of beneficial
interest, no par value, under the Securities Act of 1933 pursuant to Rule 24f-2
of the Investment Company Act of 1940. Registrant filed a Rule 24f-2 Notice for
the Registrant's fiscal year ended October 31, 1995 on December 20, 1995.
Registrant will file its required Rule 24f-2 Notice for Registrant's fiscal year
ending October 31, 1996 on or about December 20, 1996.
It is proposed that this filing become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b)
x on February 29, 1996, pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of Rule 485
The Exhibit Index is located at page of the sequential numbering system.
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Page 1 of Pages
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THE JEFFERSON FUND GROUP TRUST
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the Prospectus and the
Statement of Additional Information of the responses to the Items of Parts A and
B of Form N-1A.)
Caption or Subheading in Prospectus
Item No. on Form N-1A or Statement of Additional Information
--------------------- --------------------------------------
Part A - INFORMATION REQUIRED IN PROSPECTUS
- -------------------------------------------
1. Cover Page Cover Page
2. Synopsis Expense Information
3. Condensed Financial Financial Highlights
Information
4. General Description Introduction; Investment Objectives
of Registrant and Policies
5. Management of the Management of the Fund; Brokerage Transactions;
Fund Capital Structure
5A. Management's Discussion *<F1>
of Fund Performance
6. Capital Stock and Dividends, Distributions and Taxes;
Other Securities Capital Structure; Shareholder
Reports
7. Purchase of Securities Determination of Net Asset Value;
Being Offered Purchase of Shares; Alternative Purchase
Agreements; Exchange Privilege; Distributor and
Distribution and Servicing Plans; Dividend
Reinvestment; Retirement Plans
8. Redemption or How to Redeem; Exchange Privilege
Repurchase
9. Legal Proceedings *<F1>
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and *<F1>
History
13. Investment Objectives Investment Restrictions; Investment Considerations
and Policies
14. Management of the Trustees and Officers of the Fund
Registrant
15. Control Persons and Included in Prospectus under "Capital
Principal Holders Structure"
of Securities
16. Investment Advisory Investment Advisor, Administrator, Custodian,
and Other Services Transfer Agent and Accounting Services Agent;
Distributor and Distribution and Servicing Plans;
Independent Accountants
17. Brokerage Allocation Allocation of Portfolio Brokerage
18. Capital Stock and Included in Prospectus under
Other Securities "Capital Structure"
19. Purchase, Redemption Included in Prospectus under
and Pricing of "Determination of Net Asset Value;" "Dividend
Securities Being Reinvestment;" "Retirement Plans;" "Contingent
Deferred Sales Charge -- Class A or B Shares;"
"Distributor and Distribution and Servicing
Plans;" "How to Redeem;" and "Exchange Privilege"
20. Tax Status Taxes
21. Underwriters Distributor and Distribution and Servicing Plans
22. Calculation of Per- Calculation of Total Return
formance Data
23. Financial Statements Report of Independent Accountants;
Financial Statements
*<F1>Answer negative or inapplicable
P R O S P E C T U S FEBRUARY 29, 1996
THE JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND INCOME FUND
The Jefferson Fund Group Trust is an open-end, management investment company
currently consisting of one mutual fund -- JEFFERSON GROWTH AND INCOME FUND (the
"Fund"). The Fund's investment objectives are to produce long-term capital
appreciation and current income principally through investing in equity
securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. Investors are advised to
read this Prospectus and retain it for future reference. This Prospectus does
not set forth all of the information included in the Registration Statement and
Exhibits thereto which the Fund has filed with the Securities and Exchange
Commission. A Statement of Additional Information, dated February 29, 1996,
which is a part of such Registration Statement is incorporated by reference in
this Prospectus. Copies of the Statement of Additional Information will be
provided promptly without charge to each person to whom a Prospectus is
delivered upon written or telephone request. Written requests should be made by
writing to: The Jefferson Fund Group Trust, c/o Firstar Trust Company, Mutual
Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701 (for overnight and
express mail, to: The Jefferson Fund Group Trust, c/o Firstar Trust Company,
Mutual Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202), and
telephone requests should be made by calling (800) 216-9785.
THE JEFFERSON FUND GROUP TRUST
(800) 216-9785
The Jefferson Fund Group Trust
JEFFERSON GROWTH AND INCOME FUND
TABLE OF CONTENTS
Page No.
--------
EXPENSE INFORMATION...................................... 2
FINANCIAL HIGHLIGHTS..................................... 4
INTRODUCTION............................................. 5
RISK FACTORS............................................. 5
INVESTMENT OBJECTIVES AND POLICIES....................... 5
MANAGEMENT OF THE FUND................................... 10
DETERMINATION OF NET ASSET VALUE......................... 11
PURCHASE OF SHARES....................................... 12
GENERAL.................................................. 14
ALTERNATIVE PURCHASE ARRANGEMENTS........................ 15
HOW TO REDEEM............................................ 19
EXCHANGE PRIVILEGE....................................... 22
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS......... 23
RETIREMENT PLANS......................................... 24
DIVIDEND REINVESTMENT.................................... 24
DIVIDENDS, DISTRIBUTIONS AND TAXES....................... 25
BROKERAGE TRANSACTIONS................................... 25
CAPITAL STRUCTURE........................................ 26
SHAREHOLDER REPORTS...................................... 27
PERFORMANCE INFORMATION.................................. 27
APPENDIX A - DESCRIPTION OF SECURITIES RATINGS........... 30
EXPENSE INFORMATION
CLASS A CLASS B
SHAREHOLDER TRANSACTION EXPENSES SHARES SHARES
Maximum Sales Load Imposed on Purchases
(as a percentage of
offering price at time of purchase) 5.5% None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price at time
of purchase) None None
Maximum Contingent Deferred Sales Charge
(as a percentage
of net asset value at time of purchase) None 5.0%
Exchange Fee*<F2> None None
Redemption Fee**<F3> None None
ANNUAL FUND OPERATING EXPENSES AFTER EXPENSE REIMBURSEMENTS
CLASS A CLASS B
(as a percentage of average net assets) SHARES SHARES
Management Fees .60% .60%
12b-1 Fees***<F4> .25% 1.00%
Other Expenses (after expense reimbursements)****<F5> .30% .30%
Total Fund Operating Expenses
(after expense reimbursements)*****<F6> 1.15% 1.90%
*<F2>A fee of $5.00 is charged for each telephone exchange.
**<F3>A fee of $10.00 is charged for each wire redemption.
***<F4>12b-1 Fees which are less than or equal to .25% represent servicing
fees, and the remaining portion represents distribution fees. See
"Distributor and Distribution and Servicing Plans"
****<F5>Other expenses for the Fund are based on estimated amounts for the
fiscal year ended October 31, 1996 and reflect expense reimbursements from
Distributor. Without such reimbursements, other expenses of both Class A and
Class B shares are estimated to be 6.65%.
*****<F6>Without expense reimbursements, the total fund operating expenses of
Class A and Class B shares are estimated to be 7.50% and 8.25%, respectively.
Class A Class B
Shares Shares
--------------------------------
Example: 1 Year 3 Years 1 Year 3 Years
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and (2)
redemption at the end of each time $66. $90. $69. $110.
period:
Class B Shares
---------------------------
1 Year 3 Years
An investor would pay the
following expenses on the same
investment, assuming no $19. $60.
redemption:
THE PURPOSE OF THE PRECEDING TABLE IS TO ASSIST INVESTORS IN UNDERSTANDING THE
VARIOUS COSTS THAT AN INVESTOR IN THE FUND WILL BEAR, DIRECTLY OR INDIRECTLY.
THEY SHOULD NOT BE CONSIDERED TO BE A REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. THE ANNUAL FUND
OPERATING EXPENSES ARE BASED ON THE AMOUNTS SET FORTH ABOVE. THE EXAMPLE
ASSUMES A 5% ANNUAL RATE OF RETURN PURSUANT TO REQUIREMENTS OF THE SECURITIES
AND EXCHANGE COMMISSION. THIS HYPOTHETICAL RATE OF RETURN IS NOT INTENDED TO BE
REPRESENTATIVE OF PAST OR FUTURE PERFORMANCE OF THE FUND. DUE TO THE 12B-1
DISTRIBUTION FEE IMPOSED ON CLASS B SHARES, A CLASS B SHAREHOLDER OF THE FUND
MAY, DEPENDING ON THE LENGTH OF TIME THE SHARES ARE HELD, INCUR HIGHER SALES-
RELATED CHARGES THAN THE MAXIMUM PERMITTED BY THE RELEVANT RULES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. ON FRONT-END SALES CHARGES.
FINANCIAL HIGHLIGHTS
The financial information for a Share outstanding of the Jefferson Growth
and Income Fund during the period from September 1, 1995 (commencment of
operations) to October 31, 1995 included in the table below has been audited by
Coopers & Lybrand L.L.P., independent accountants, in conjunction with their
audit of the financial statements of the Fund. The table should be read in
conjunction with the financial statements and related notes included in the
Statement of Additional Information.
September 1, 1995 (1)<F7>
through
October 31, 1995
Class A Class B
------- -------
Per Share Data:
Net asset value,
beginning of period $10.00 $10.00
Income from investment
operations:
Net investment income 0.04 0.03
Net realized and
unrealized
gains on securities - -
----- -----
Total from investment
operations 0.04 0.03
----- -----
Net asset value, end of
period $10.04 $10.03
----- -----
----- -----
Total return (2)<F8>(3)<F9> 0.40% 0.30%
Supplemental data and
ratios:
Net assets, in
thousands, end of period $1,279 $133
Ratio of net expenses to
average
net assets (4)<F10> 1.15% 1.90%
Ratio of net investment
income
to average net assets(4)<F10> 3.09% 2.59%
Portfolio turnover rate(5)<F11> - -
(1)<F7>Commencement of operations.
(2)<F8>Not annualized.
(3)<F9>The total return calculation does not reflect the 5.5% front end sales
charge for Class A Shares or the 5% Contingent Deferred Sales Charge
on Class B Shares.
(4)<F10>Annualized.
(5)<F11>Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued. During this
period, there were no sales of securities.
INTRODUCTION
The Jefferson Fund Group Trust, of which the Fund is a diversified
series, was organized as a business trust under the laws of Delaware on January
20, 1995. It is an open-end, management investment company registered under the
Investment Company Act of 1940. As an open-end investment company, it obtains
its assets by continuously selling shares of beneficial interest, having no par
value ("Shares"), to the public. Proceeds from such sales are invested by the
Fund in securities of other companies. The resources of many investors are thus
combined and each individual investor has an interest in every one of the
securities owned thereby providing diversification in a variety of industries.
The Fund's investment adviser furnishes professional management to select and
watch over its investments. The Fund is intended for long-term investors, not
for those who may wish to redeem their shares after a short period of time. The
Fund is a member of the Jefferson family of funds.
RISK FACTORS
As discussed more fully below under "Investment Objectives and
Policies," there can be no assurance that the Fund will achieve its investment
objectives. Share prices and bond prices of even the best managed, most
profitable corporations are subject to market risk. This may result in
fluctuations in the Fund's Share price. When an investor sells shares of the
Fund, the price may be higher or lower than the price at which the shares were
purchased. In addition, special risks may be presented by the particular types
of securities in which the Fund may invest. For example, investment in lower-
rated securities is speculative and involves risks not associated with
investment in higher rated securities, including overall greater risk of non-
payment of interest and principal and potentially greater sensitivity to general
economic conditions and changes in interest rates. In addition, the price of
non-convertible debt securities may vary inversely to interest rates, i.e.,
appreciate when interest rates decline and depreciate when interest rate rise.
The Fund's investment in non-convertible debt securities may cause the price of
the shares to fluctuate in the same manner. More details on the risks involved
are set forth in the Investment Objectives and Policies section of this
Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Fund are to produce long-term capital
appreciation and current income principally through investing in equity
securities. Uniplan, Inc., the Fund's investment adviser (the "Adviser"),
anticipates that most of the time more than 50% of the Fund's portfolio will be
invested in equity securities. For this purpose, the Adviser deems common
stocks, preferred stocks and securities (including debt securities) that are
convertible into common stocks to be equity securities. As described more fully
below, the Adviser anticipates that under normal market conditions the remaining
portion of the Fund's portfolio will be invested in non-convertible debt
securities, including short-term money market instruments and U.S. Government
and agency securities. Under unusual conditions, for temporary defensive
purposes, the Fund may invest 100% of its assets in non-convertible debt
securities.
In selecting investments, the Adviser will consider various financial
characteristics of the issuer, including historical sales and net income,
debt/equity and price/earnings ratios and book value. The Adviser will usually
place an emphasis on issuers with favorable credit and earnings characteristics.
The Adviser may also review research reports of broker-dealers and trade
publications and, in appropriate situations, may meet with management. Greater
weight will be given to internal factors, such as product or service
development, than to external factors, such as interest rate changes, commodity
price fluctuations, general stock market trends and foreign currency exchange
values.
Investors should be aware that since the major portion of the Fund's
portfolio will normally be invested in equity securities, the Fund's net asset
value may be subject to greater fluctuation than a portfolio containing a
substantial amount of fixed-income securities. There can be no assurance that
the objectives of the Fund will be realized. Nor can there be any assurance
that the Fund's portfolio will not decline in value or that any income will be
earned.
When the Adviser believes that securities other than equity securities
offer opportunity for long-term capital appreciation and current income, the
Fund may invest its assets in non-convertible debt securities. Investments in
non-convertible debt securities offer an opportunity for growth of capital
during periods of declining interest rates, when the market value of such
securities in general increases. The Fund will limit its investments in non-
convertible debt securities to those which have been assigned one of the six
highest ratings of either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's") (or unrated but determined by the Adviser to
be of comparable quality). A Moody's rating of B (or an S&P rating of B) is the
sixth highest rating. This means that the non-convertible debt security
generally lacks the characteristics of a desirable investment. Assurance of
interest and principal payments over any long period of time may be small. In
the event a non-convertible debt security is downgraded below the sixth highest
rating after investment, the Fund may retain such security. A description of
the foregoing ratings is attached to this Prospectus as Appendix A. A security
is considered to be of "investment grade" quality if it is either (1) rated in
one of the top four rating categories by a nationally recognized statistical
rating organization ("NRSRO") (at least Baa by Moody's or BBB by S&P) or (2) not
rated by any NRSRO but determined by the Fund's Adviser to be of comparable
quality to obligations so rated. Securities rated in the fifth highest rating
category, sixth rating category or below are not considered to be of investment
grade and are referred to herein as "High Yield Securities," and are commonly
known as "junk bonds." These lesser rated debt securities may involve special
risks. Investments in securities rated below investment grade that are eligible
for purchase by the Fund are described as "speculative" by both Moody's and S&P.
Investment in lower rated corporate debt securities (i.e. High Yield
Securities) generally provides greater income and increased opportunity for
capital appreciation than investments in higher quality securities, but they
also typically entail greater price volatility and principal and income risk.
These High Yield Securities are regarded as predominantly speculative with
respect to the issuer's continuing ability to meet principal and interest
payments. The market for these securities is relatively new, and many of the
outstanding high yield securities have not endured a major business recession.
A long-term track record on default rates, such as that for investment grade
corporate bonds, does not exist for this market. Analysis of the
creditworthiness of issuers of debt securities that are high yield may be more
complex than for issuers of higher quality debt securities. No more than 15% of
the Fund's net assets will be invested in debt securities rated below investment
grade (or unrated but determined by the Adviser to be of comparable quality).
As with other fixed-income securities, High Yield Securities are
subject to credit risk and market risk. Market risk relates to changes in a
security's value as a result of changes in interest rates. Credit risk relates
to the ability of the issuer to make payments of principal and interest. High
Yield Securities rated "BB" or "Ba" or lower by Moody's or S&P or of comparable
quality are considered to be speculative with respect to the issuer's capacity
to pay interest and repay principal.
High Yield Securities are generally subject to greater credit risk
than higher-rated securities because the issuers are more vulnerable to economic
downturns, higher interest rates or adverse issuer-specific developments. In
addition, the prices of High Yield Securities are generally subject to greater
market risk and therefore react more sharply to changes in interest rates. The
value and liquidity of High Yield Securities may be diminished by adverse
publicity and investor perceptions. Also, legislative proposals limiting the
tax benefits to the issuers or holders of taxable High Yield Securities or
requiring federally-insured savings and loan institutions to reduce their
holdings of taxable High Yield Securities have had and may continue to have an
adverse effect on the market value of these securities.
Because the market for certain High Yield Securities is relatively
new, that market may be particularly sensitive to an economic downturn or a
general increase in interest rates. Recent regulatory developments and declines
in the value of certain High Yield Securities have limited and may continue to
limit the ability of important participants in the High Yield Securities market
to maintain orderly markets in certain High Yield Securities.
Particular types of High Yield Securities may present special
concerns. Some High Yield Securities in which the Fund may invest may be
subject to redemption or call provisions that may limit increases in market
value that might otherwise result from lower interest rates while increasing the
risk that the Fund may be required to reinvest redemption or call proceeds
during a period of relatively low interest rates.
The Fund may purchase "illiquid securities," defined as securities
which may not be disposed of in the ordinary course of business within seven
days, and certain securities whose disposition is restricted by the securities
laws. The Fund may also purchase securities of unseasoned companies defined as
companies having a record of less than three years of continuous operation,
including the operation of any predecessor business of a company which came into
existence as a result of a merger, consolidation, reorganization or purchase of
substantially all of the assets of such predecessor business. The Fund may
purchase "illiquid securities" and securities of unseasoned companies so long as
no more than 10% of the Fund's net assets would be invested in such securities
after giving effect to the purchase. Within this 10% limitation, the Fund will
not invest more than 5% of its net assets in securities of issuers that are
restricted from being sold to the public without registration under the
Securities Act of 1933, including restricted securities subject to resale
pursuant to Rule 144A under the Securities Act of 1933. Illiquid securities at
present are considered to include repurchase agreements maturing in more than
seven days and certain over-the-counter options, to the extent described under
"Options Transactions - OTC Options" in the Statement of Additional Information.
Transactions in illiquid securities may involve relatively higher transaction
costs.
The Fund may invest in convertible securities. Convertible securities
are generally preferred stocks or fixed income securities that are convertible
into common stock at either a stated price or a stated rate. The price of the
convertible security will normally vary in some proportion to changes in the
price of the underlying common stock because of this conversion feature. A
convertible security may normally also provide a fixed income stream. For this
reason, the convertible security may not decline in price as rapidly as the
underlying common stock.
The Adviser will select convertible securities to be purchased by the
Fund based primarily upon its evaluation of the fundamental investment
characteristics and growth prospects of the issuer of the security. As a fixed-
income security, a convertible security tends to increase in market value when
interest rates decline and to decrease in value when interest rates rise. While
convertible securities generally offer lower interest or dividend yields than
non-convertible fixed-income securities of similar quality, their value tends to
increase as the market value of the underlying stock increases and to decrease
when the value of the underlying stock decreases.
For temporary defensive purposes, the Fund may invest all of its
assets in cash, high quality money market instruments and United States
Government or agency securities. These investments may be retained by the Fund
in amounts that assist the fund in engaging temporary defensive measures to
avoid the effects of declining securities prices.
The money market instruments in which the Fund may invest include
United States Treasury Bills and other short term U.S. Government Securities,
commercial paper rated A-3 or better by Standard & Poor's Corporation,
commercial paper master notes and repurchase agreements. Commercial paper
master notes are unsecured promissory notes issued by corporations to finance
short-term credit needs. They permit a series of short-term borrowings under a
single note. Borrowings under commercial paper master notes are payable in
whole or in part at any time, may be prepaid in whole or in part at any time,
and bear interest at rates which are fixed to known lending rates and
automatically adjusted when such known lending rates change. There is no
secondary market for commercial paper master notes. The Adviser will monitor
the creditworthiness of the issuer of the commercial paper master notes.
Repurchase agreements are agreements under which the seller of a
security agrees at the time of sale to repurchase the security at an agreed time
and price. The Fund will not enter into repurchase agreements with entities
other than banks or registered broker-dealers or invest over 25% of its net
assets in repurchase agreements, except that no such limit applies when the Fund
is investing for temporary defensive purposes. If a seller of a repurchase
agreement defaults and does not repurchase the security subject to the
agreement, the Fund will look to the collateral security underlying the seller's
repurchase agreement, including the securities subject to the repurchase
agreement, for satisfaction of the seller's obligation to the Fund. In such
event, the Fund might incur disposition costs in liquidating the collateral and
might suffer a loss if the value of the collateral declines. In addition, if
bankruptcy proceedings are instituted against a seller of a repurchase
agreement, realization upon the collateral may be delayed or limited.
The Fund may lend its portfolio securities to broker-dealers under
contracts calling for collateral in cash, U.S. Government securities or other
high quality debt securities equal to at least the market value of the
securities loaned. The Fund's performance will continue to reflect changes in
the value of the securities loaned and will also receive either interest,
through investment of cash collateral by the Fund in permissible investments, or
a fee, if the collateral is U.S. Government securities. Securities lending
involves the risk of loss of rights in the collateral or delay in recovery of
the collateral should the borrower fail financially. The Fund will normally pay
lending fees to the broker-dealer arranging the loan.
The Fund may from time to time make short sales "against the box."
While a short sale is made by selling a security the Fund does not own, a short
sale is "against the box" to the extent that the Fund contemporaneously owns or
has the right to obtain securities identical to those sold short at no added
cost. Short sales expose the Fund to the risk that it will be required to
purchase securities to cover its short position at a time when the securities
have appreciated in value, thus resulting in a loss to the Fund. Short sales
may be treated as short-term gains and/or losses for tax purposes to investors.
The Fund may purchase securities which it is eligible to purchase on a
when-issued basis, may purchase and sell such securities for delayed delivery
and may make contracts to purchase such securities for a fixed price at a future
date beyond normal settlement time ("forward commitments"). When-issued
transactions, delayed delivery purchases and forward commitments involve a risk
of loss if the value of the securities declines prior to the settlement date,
which risk is in addition to the risk of decline in the value of the Fund's
other assets. No income accrues to the purchaser of such securities prior to
delivery.
The Fund does not intend to place emphasis on short-term trading
profits. The Fund's annual portfolio turnover rate generally will not exceed
75%. The annual portfolio turnover rate indicates changes in the Fund's
portfolio and is calculated by dividing the lesser of purchases or sales of
portfolio securities (excluding securities having maturities at acquisition of
one year or less) for the fiscal year, by the monthly average of the value of
the portfolio securities (excluding securities having maturities at acquisition
of one year or less) owned by the Fund during the fiscal year. The annual
portfolio turnover rate may vary widely from year to year depending upon market
conditions and prospects. High turnover (100% or more) in any year may result
in the payment by the Fund from capital of above average amounts of brokerage
commissions and could generate higher than normal short-term capital gains.
The Fund will limit investments in American Depository Receipts of
foreign issuers to 25% of its assets. Such investments may involve risks which
are in addition to the usual risks inherent in investments in domestic issuers.
In many countries, there is less publicly available information about issuers
than is available in the reports and ratings published about companies in the
United States. Additionally, foreign companies are not subject to uniform
accounting, auditing and financial reporting standards. Dividends and interest
on foreign securities may be subject to foreign withholding taxes, which would
reduce the Fund's income without providing a tax credit for the Fund's
stockholders. Although the Fund intends to invest in American Depository
Receipts of foreign issuers domiciled in nations which the Fund's investment
adviser considers as having stable and friendly governments, there is the
possibility of expropriation, confiscatory taxation, currency blockage or
political or social instability which could affect investments relating to
issuers domiciled in those nations.
The Fund may invest in interest rate futures contracts and securities
index futures contracts and options thereon ("futures options") that are traded
on a United States or foreign exchange or board of trade for hedging purposes.
There are several risks associated with the use of futures and futures options
for hedging purposes. There can be no guarantee that there will be a
correlation between price movements in the hedging vehicle and in the portfolio
securities being hedged. An incorrect correlation could result in a loss on
both the hedged securities in the Fund and the hedging vehicle so that the
portfolio return might have been greater had hedging not been attempted. There
can be no assurance that a liquid market will exist at a time when the Fund
seeks to close out a futures contract or a futures option position. Most
futures exchanges and boards of trade limit the amount of fluctuation permitted
in futures contract prices during a single day; once the daily limit has been
reached on a particular contract, no trades may be made that day at a price
beyond that limit. In addition, certain of these instruments are relatively new
and without a significant trading history. As a result, there is no assurance
that an active secondary market will develop or continue to exist. Lack of a
liquid market for any reason may prevent the Fund from liquidating an
unfavorable position and the Fund would remain obligated to meet margin
requirements until the position is closed.
The Fund will only enter into futures contracts or futures options
which are standardized and traded on a U.S. or foreign exchange or board of
trade, or similar entity, or quoted on an automated quotation system. The Fund
will use financial futures contracts and related options only for "bona fide
hedging" purposes, as such term is defined in applicable regulations of the
CFTC, or, with respect to positions in financial futures and related options
that do not qualify as "bona fide hedging" positions, will enter such non-
hedging positions only to the extent that aggregate initial margin deposits plus
premiums paid by it for open futures option positions, less the amount by which
any such positions are "in-the-money," would not exceed 5% of the Fund's total
assets.
The Fund may purchase put options on securities to protect holdings in
an underlying or related security against a substantial decline in market value.
The Fund may purchase call options on securities to protect against substantial
increases in prices of securities the Fund intends to purchase pending its
ability to invest in such securities in an orderly manner. The Fund may sell
put or call options it has previously purchased, which could result in a net
gain or loss depending on whether the amount realized on the sale is more or
less than the premium and other transaction costs paid on the put or call
options which is sold. The Fund may write a call or put option only if the
option is "covered" by the Fund holding a position in the underlying securities
or by other means which permit immediate satisfaction of the Fund's obligation
as write of the option. Prior to exercise or expiration, an option may be
closed out by an offsetting purchase or sale of an option of the same series.
The purchase and writing of options involves certain risks. During
the option period, the covered call writer has, in return for the premium on the
option, given up the opportunity to profit from a price increase in the
underlying securities above the exercise price, but, as long as its obligation
as a writer continues, has retained the risk of loss should the price of the
underlying security decline. The writer of an option has no control over the
time when it may be required to fulfill its obligation as a writer of the
option. Once an option writer has received an exercise notice, it cannot effect
a closing purchase transaction in order to terminate its obligation under the
option and must deliver the underlying securities at the exercise price. If a
put or call option purchased by the Fund is not sold when it has remaining
value, and if the market price of the underlying security, in the case of a put,
remains equal to or greater than the exercise price or, in the case of a call,
remains less than or equal to the exercise price, the Fund will lose its entire
investment in the option. Also, where a put or call option on a particular
security is purchased to hedge against price movements in a related security,
the price of the put or call option may move more or less than the price of the
related security. There can be no assurance that a liquid market will exist
when the Fund seeks to close out an option position. Furthermore, if trading
restrictions or suspensions are imposed on the options market, the Fund may be
unable to close out a position.
Under certain circumstances the Fund may (a) invest in warrants,
(b) write covered call and put options or purchase put and call options, (c)
temporarily borrow money from banks for emergency or extraordinary borrowings,
(d) pledge its assets to secure borrowings, (e) purchase securities of other
investment companies, and (f) purchase and sell futures contracts and options
thereon. A more complete discussion of the circumstances in which the Fund may
engage in these activities is included in the Fund's Statement of Additional
Information. Except for the investment policies listed in subparagraph (b),
(c), (d) and (f) of this paragraph, the investment objectives and the other
policies described under this caption are not fundamental policies and may be
changed without shareholder approval. Such changes may result in the Fund
having investment objectives different from the objectives which the shareholder
considered appropriate at the time of investment in the Fund. Shareholders will
receive at least thirty days' prior written notice of any changes in the
investment objectives of the Fund.
MANAGEMENT OF THE FUND
As a Delaware business trust, the business and affairs of the Fund are
managed under the direction of its Trustees. Under an investment advisory
agreement (the "Agreement") with the Fund, Uniplan, Inc., 839 N. Jefferson
Street, Milwaukee, Wisconsin 53202 (the "Adviser"), furnishes continuous
investment advisory services and management to the Fund. In addition to the
Fund, the Adviser is the investment adviser to individual and institutional
clients with substantial investment portfolios. As of December 31, 1995, the
Adviser and its affiliates managed approximately $272.9 million in assets. The
Adviser has no previous experience managing the investment portfolio of a
registered investment company. The Adviser was organized in 1985 and is
currently controlled by Richard P. Imperiale, who is a director and the
President of the Adviser.
The Adviser supervises and manages the investment portfolio of the
Fund and, subject to such policies as the Trustees of the Fund may determine,
directs the purchase or sale of investment securities in the day-to-day
management of the Fund. Under the Agreement, the Adviser, at its own expense
and without reimbursement from the Fund, will furnish office space and all
necessary office facilities, equipment and executive personnel for making the
investment decisions necessary for managing the Fund and maintaining its
organization, and will pay the salaries and fees of all officers and Trustees of
the Fund (except the fees paid to disinterested directors or Trustees who are
affiliated with the Distributor). For the foregoing, the Adviser receives an
annual fee of .60% on the first $500,000,000 of the Fund's average net assets,
.50% of the next $500,000,000 of the Fund's average net assets and .40% of the
Fund's average net assets in excess of $1,000,000,000. Such fee will be paid
monthly. The Adviser may utilize a portion of the advisory fee to make
solicitation payments in accordance with the Investment Advisers Act of 1940.
Richard P. Imperiale, President of the Adviser since 1985, is
primarily responsible for the day-to-day management of the Fund's portfolio. He
has held this responsibility since the Fund commenced operations. Mr. Imperiale
also has served as a trustee of the Fund since it was organized.
The Fund also has entered into an administration agreement (the
"Administration Agreement") with Firstar Trust Company (the "Administrator"),
615 East Michigan Street, Milwaukee, Wisconsin 53202. Under the Administration
Agreement, the Administrator maintains the books, accounts and other documents
required by the Act, responds to shareholder inquiries, prepares the Fund's
financial statements and tax returns, prepares certain reports and filings with
the Securities and Exchange Commission and with state Blue Sky authorities,
furnishes statistical and research data, clerical, accounting and bookkeeping
services and stationery and office supplies, keeps and maintains the Fund's
financial and accounting records and generally assists in all aspects of the
Fund's operations. The Administrator, at its own expense and without
reimbursement from the Fund, furnishes office space and all necessary office
facilities, equipment and executive personnel for performing the services
required to be performed by it under the Administration Agreement. For the
foregoing, the Administrator receives from the Fund a fee, paid monthly at an
annual rate of .05% of the first $100,000,000 of the Fund's average net assets,
.04% of the next $400,000,000 of the Fund's average net assets, and .03% of the
Fund's net assets in excess of $500,000,000, plus certain out-of-pocket
expenses. Notwithstanding the foregoing, the Administrator's minimum annual fee
is $40,000.
Firstar Trust Company also provides custodial, transfer agency and
accounting services for the Fund. Information regarding the fees payable by the
Fund to Firstar Trust Company for these services is provided in the Statement of
Additional Information.
The Fund will pay all of its expenses not assumed by the Adviser or
Rodman & Renshaw, Inc. ("Distributor"), including, but not limited to, the costs
of preparing and printing its registration statements required under the
Securities Act of 1933 and the Investment Company Act of 1940 and any amendments
thereto, the expenses of registering its shares with the Securities and Exchange
Commission and in the various states, the printing and distribution cost of
prospectuses mailed to existing shareholders, the cost of trustee and officer
liability insurance, reports to shareholders, reports to government authorities
and proxy statements, interest charges, brokerage commissions, and expenses
incurred in connection with portfolio transactions. The Fund will also pay the
fees of Trustees who are not officers of the Fund, salaries of administrative
and clerical personnel, association membership dues, auditing and accounting
services, fees and expenses of any custodian or trustees having custody of Fund
assets, expenses of calculating the net asset value and repurchasing and
redeeming shares, and charges and expenses of dividend disbursing agents,
registrars, and Share transfer agents, including the cost of keeping all
necessary shareholder records and accounts and handling any problems relating
thereto. In addition to any reimbursement requirement required under the most
restrictive applicable expense limitation of state securities commissions
described above, the Distributor has agreed to reimburse the Fund for expenses
in excess of 1.15% of its average net assets for Class A Shares and 1.90% of its
average net assets for Class B Shares.
DETERMINATION OF NET ASSET VALUE
The per Share net asset value of the Fund is determined by dividing
the total value of its net assets (meaning its assets less its liabilities) by
the total number of its Shares outstanding at that time. The net asset value is
determined as of the close of regular trading (currently 4:00 p.m. Eastern time)
on the New York Stock Exchange on each day the New York Stock Exchange is open
for trading. This determination is applicable to all transactions in Shares of
the Fund prior to that time and after the previous time as of which net asset
value was determined. Accordingly, purchase orders accepted or Shares tendered
for redemption prior to the close of regular trading on a day the New York Stock
Exchange is open for trading will be valued as of the close of trading, and
purchase orders accepted or Shares tendered for redemption after that time will
be valued as of the close of the next trading day. Orders received by the
Distributor from dealers or brokers after the net asset value is determined that
day will be valued as of the close of the next trading day even if the orders
were received by the dealer or broker from its customer prior to such
determination. Purchase orders received on other than a regular business day
will be executed on the next succeeding regular business day. The Distributor,
in its sole discretion, may accept or reject any order for purchase of Fund
shares. The sale of shares will be suspended during any period in which
New York Stock Exchange is closed for other than weekends or holidays, or if
permitted by the rules of the SEC when trading on the New York Stock Exchange is
restricted or during an emergency which makes it impracticable for the Fund to
dispose of its securities or to determine fairly the value of its net assets, or
during any other period permitted by the SEC for the protection of investors.
Securities traded on any national stock exchange or quoted on the
NASDAQ National Market System will be valued on the basis of the last sale price
on the date of valuation or, in the absence of any sale on that date, the most
recent bid price. Other portfolio securities will be valued at the most recent
bid price, if market quotations are readily available. Certain of the Fund's
holdings of debt securities are valued by a pricing service. Securities for
which there are no readily available market quotations and other assets will be
valued at their fair value as determined in good faith by the Trustees or
pursuant to procedures adopted by the Trustees. Odd lot differentials and
brokerage commissions will be excluded in calculating values.
PURCHASE OF SHARES
Shares of the Fund are continuously offered through the Fund's
principal underwriter, the Distributor, and through other firms which have
dealer agreements with the Distributor ("participating brokers") or which have
agreed to act as introducing brokers for the Distributor ("introducing
brokers").
There are two ways to purchase Shares: either (1) through your broker
or dealer which has a dealer agreement or (2) by mailing an Account Application
with payment, as described below under the heading "Direct Investment," to the
Transfer Agent (if no dealer is named in the application, the Distributor may
act as dealer).
The Fund offers and sells two classes of Shares (Class A and Class B)
which may be purchased at a price equal to their net asset value per share next
determined after receipt of an order, plus a sales charge which, at the election
of the purchaser, may be imposed either (i) at the time of the purchase in the
case of Class A Shares (the "initial sales charge alternative") or (ii) on a
contingent deferred basis in the case of Class B Shares (the "deferred sales
charge alternative"). Purchase payments for Class B Shares are fully invested
at the net asset value next determined after acceptance of the trade. Purchase
payments for Class A Shares, less the applicable sales charge, are invested at
the net asset value next determined after acceptance of the trade.
Except for purchases through the Auto Invest plan and tax-qualified
programs referred to below, the minimum initial investment in the Fund is $2,500
and the minimum additional investment is $100. As discussed below, the minimum
initial IRA investment is $250 and the minimum subsequent IRA investment is
$100. For information about dealer commissions, see "Initial Sales Charge
Alternative -- Class A Shares" and "Deferred Sales Charge Alternative -- Class B
Shares." Persons selling Fund shares may receive different compensation for
selling Class A and Class B Shares. Normally Fund Shares purchased through
participating brokers are held in the investor's account with that broker. No
share certificates will be issued.
DIRECT INVESTMENT: Investors who wish to invest in the Fund directly,
rather than through a participating broker, may do so by completing the Account
Application included with this Prospectus. All shareholders who open direct
accounts with the Fund will receive from the Fund individual confirmations of
each purchase, redemption, dividend or reinvestment of Fund Shares, including
the total number of Fund Shares owned as of the confirmation date except that
purchases which result from the reinvestment of dividends and/or distributions
will be confirmed once each calendar quarter. See "Distributions" below.
Information regarding direct investment or any other features or plans offered
by the Fund may be obtained by calling 800-216-9785 or by calling your broker.
PURCHASE BY MAIL: Investors who wish to invest directly may send a
completed application form to:
The Jefferson Fund Group Trust
c/o Firstar Trust Company
Mutual Fund Services, Third Floor
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Do not mail letters or applications by overnight courier to the post
office address. Correspondence and applications mailed by overnight courier
should be sent to:
The Jefferson Fund Group Trust
c/o Firstar Trust Company
Mutual Fund Services, 3rd Floor
615 East Michigan Street
Milwaukee, Wisconsin 53202
All applications must be accompanied by payment in the form of a check
drawn on a U.S. bank payable to The Jefferson Fund Group Trust or by direct wire
transfer. No cash will be accepted. Firstar Trust Company will charge a $20
fee against a shareholder's account for any payment check returned to the
custodian. The shareholder will also be responsible for any loss suffered by
the Fund as a result.
Purchases are accepted subject to collection of checks at full value
and conversion into federal funds. The purchase price is based on the net asset
value next determined after the purchase order and check are accepted, even
though the check may not yet have been converted into federal funds.
Funds should be wired to: Firstar Bank of Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA #0750-00022
Firstar Trust MFS A/C #112-952-137
Credit to: The Jefferson Fund Group Trust
(Your account number and title of account, if
known)
The establishment of a new account or any additional purchases for an
existing account by wire transfer should be preceded by a phone call to Firstar
Trust Company at (800) 216-9785 to provide information for the account. A
properly signed Share purchase application marked "follow-up" must be sent for
all new accounts opened by wire transfer. Applications are subject to
acceptance by the Fund, and are not binding until so accepted. The Fund
reserves the right to reject applications in whole or part.
SUBSEQUENT PURCHASES OF SHARES: Subsequent purchases can be made as
indicated above by mailing a check with a letter describing the investment or
with the additional investment portion of a confirmation statement. The minimum
subsequent purchase is $100. All payments should be made payable to The
Jefferson Fund Group Trust and should clearly indicate the shareholder's account
number. Checks should be mailed to, or funds wired to, the locations set forth
above under "Purchase by Mail."
AUTO INVEST: The Auto Invest plan provides for periodic investments
into the shareholder's account with the Fund by means of automatic transfers of
a designated amount from the shareholder's bank account. Investments may be
made monthly, on the business day of a shareholder's choosing, and may be in any
amount subject to a minimum of $100 per month. Further information regarding
the Auto Invest plan is available from the Distributor or participating brokers.
You may enroll by completing the appropriate section of the Application that
accompanies this Prospectus.
FUND LINK: (Does not apply to shares held in broker "street name"
accounts.) Fund Link ("Fund Link") connects your Fund account with a bank
account. Fund Link may be used for subsequent purchases and for redemption and
other transactions described under "How to Redeem." Purchase transactions are
effected by electronic funds transfers from the shareholder's account at a U.S.
bank or other financial institution that is an Automated Clearing House ("ACH")
member. Investors may use Fund Link to make subsequent purchases of shares in
amounts from $100 to $10,000. To initiate such purchases, call 800-216-9785.
The Fund may accept telephone instructions from any person identifying himself
as the owner of an account. The Fund may employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and may be
liable for any losses due to unauthorized or fraudulent instructions if it fails
to employ such procedures. The Fund will require a form of personal
identification prior to acting on a caller's telephone instructions, will
provide written confirmations of such transactions and will record telephone
instructions . Fund Link is normally established within 15 days of receipt of
an Application by the Transfer Agent. Shares will be purchased on the regular
business day the Transfer Agent receives the funds through the ACH system,
provided the funds are received before the close of regular trading on the New
York Stock Exchange. If the funds are received after the close of regular
trading, the Shares will be purchased on the next regular business day. Most
transfers are completed within three business days after you call to place the
order.
Fund Link privileges may be requested on the Account Application. To
establish Fund Link on an existing account, complete the Supplemental
Application with signatures guaranteed from all shareholders of record for the
account. See "Signature Guarantee" under "General" below. Such privileges
apply to each shareholder of record for the account unless and until the
Transfer Agent receives written instructions from a shareholder of record
cancelling such privileges. Changes of bank account information must be made by
completing a new Supplemental Application signed by all owners of record of the
account, with all signatures guaranteed. The Transfer Agent and the Fund may
rely on any telephone instructions believed to be genuine and will not be
responsible for any damage, loss or expenses arising out of such instructions.
The Fund reserves the right to amend, suspend or discontinue Fund Link
privileges at any time without prior notice.
GENERAL
Changes in registration or account privileges may be made in writing
to Firstar Trust Company, the Fund's transfer agent (the "Transfer Agent").
Signature guarantees may be required. See "Signature Guarantee" below.
All correspondence must include the account number and must be sent
to:
The Jefferson Fund Group Trust
c/o Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Overnight or express mail should be directed to:
The Jefferson Fund Group Trust
c/o Firstar Trust Company
615 East Michigan Street
Milwaukee, Wisconsin 53202
SIGNATURE GUARANTEE: When a signature guarantee is called for, the
shareholder should have "Signature Guaranteed" stamped under his signature and
guaranteed by any of the following entities: U.S. banks, foreign banks having a
U.S. correspondent bank, credit unions, savings associations, U.S. registered
dealers and brokers, municipal securities dealers and brokers, government
securities dealers and brokers, national securities exchanges, registered
securities associations and clearing agencies (each an "Eligible Guarantor
Institution"). The Distributor reserves the right to reject any signature
guarantee purchase to its written signature guarantee standards or procedures,
which may be revised in the future to permit it to reject signature guarantees
from Eligible Guarantor Institutions that do not, based on credit guidelines,
satisfy such written standards or procedures. The Fund may change the signature
guarantee requirements from time to time upon notice to shareholders, which may
be given by means of a new or supplemented Prospectus.
TDD SERVICE: Firstar Trust Company, the transfer agent, offers
Telecommunication Device for the Deaf (TDD) services for hearing impaired
shareholders. The dedicated number for this service is 1-800-684-3416.
ALTERNATIVE PURCHASE ARRANGEMENTS
The alternative purchase agreements offered by the Fund enable the
investor to choose the method of purchasing Fund shares that is most beneficial
given the amount of the intended purchase, the length of time the investor
expects to hold the Shares and other circumstances. Investors should consider
whether, during the anticipated life of an intended investment in the Fund, the
accumulated continuing distribution and servicing fees plus contingent deferred
sales charges on Class B Shares would exceed the initial sales charges plus
accumulated servicing fees on Class A Shares purchased at the same time, as well
as the possibility that the anticipated higher yield of Class A Shares due to
lower ongoing charges will offset the initial sales charge paid on such Shares.
As an illustration, investors purchasing shares of sufficient value to
qualify for sales charges of 1% or less might prefer the initial sales charge
alternative (Class A) because similar reductions are not available on the
contingent deferred sales charge for purchases under the deferred sales charge
alternative (Class B). Moreover, all Shares acquired under the initial sales
charge alternative are subject to a servicing fee but are not subject to a
distribution fee and, accordingly, such shares are expected to pay
correspondingly higher dividends on a per Share basis. Investors whose purchase
will not qualify for reduced initial sales charges may nonetheless wish to
consider the initial sales charge alternative if they expect to hold their
shares for an extended period of time, because, depending on the number of years
the investor holds the investment, the accumulated continuing distribution and
servicing fees on Class B Shares would eventually exceed the initial sales
charge plus the continuing servicing fee on Class A Shares during the life of
such an investment. However, because initial sales charges are deducted at the
time of purchase, not all of the purchase payment for Class A Shares is invested
initially in Shares.
Some investors might determine that it would be more advantageous to
utilize the deferred sales charge alternative to have all purchase payments
invested initially, although remaining subject to continuing distribution and
servicing fees and being subject to contingent deferred sales charges.
For a description of the Distribution and Servicing Plans and
distribution and servicing fees payable thereunder with respect to Class A and
Class B Shares, see "Distributor and Distribution and Servicing Plans" below.
INITIAL SALES CHARGE ALTERNATIVE --
CLASS A SHARES
Class A Shares are sold at a public offering price equal to their net
asset value per share plus a sales charge, as set forth below.
Discount or
Commission
Sales Charge to Dealers
Sales Charge As % of the As % of
As % of Net Public Public
Amount Offering Offering
Amount of Purchase Invested Price Price
- ------------------ -------- ----- -----
$0-$9,999 5.82% 5.50% 4.75%
$10,000-$24,999 4.71% 4.50% 3.75%
$25,000-$49,999 3.63% 3.50% 3.00%
$50,000-$99,999 2.56% 2.50% 2.00%
$100,000-$499,999 1.52% 1.50% 1.00%
$500,000-$999,999 1.01% 1.00% 0.75%
$1,000,000 + 0%1<F12> 0%1<F12> 0.25%1<F12>
1<F12>The Distributor will pay a 0.25% commission to dealers who sell amounts
of $1,000,000 or more of the Fund's Class A Shares, which commission may be paid
in installments over the course of the year following the purchase, and the
Distributor may pay additional commissions, not exceeding 0.25% per year, to
dealers, if the shares remain outstanding. The Distributor will not pay any
commission upon the sale of Class A Shares to any of the purchasers described
below under "Sales at Net Asset Value."
The Fund receives the entire net asset value of its Class A shares
sold to investors. The Distributor receives the sales charge shown above less
any applicable discount or commission "reallowed" to participating brokers in
the amounts indicated in the table above. The Distributor may, however, elect
to reallow the entire sales charge to participating brokers for all sales with
respect to which orders are placed with the Distributor for the Fund during a
particular period. A participating broker who receives a reallowance of 90% or
more of the sales charge may be deemed to be an "underwriter" under the
Securities Act of 1933. During such periods as may from time to time be
designated by the Distributor, the Distributor may pay selected participating
dealers an additional 0.25% of the public offering price to each participating
dealer which obtains purchase orders in amounts exceeding thresholds established
by Distributor.
Shares issued pursuant to the automatic reinvestment of income
dividends or capital gains distributions are issued at net asset value and are
not subject to any sales charges.
Under the circumstances described below, investors may be entitled to
pay reduced sales charges for Class A Shares.
COMBINED PURCHASE PRIVILEGE. Investors may qualify for a reduced
sales charge by combining purchases of the Class A Shares of the Fund into a
"single purchase," if the resulting purchase totals at least $50,000. The term
"single purchase" refers to: (i) a single purchase by an individual, or
concurrent purchases, which in the aggregate are at least equal to the
prescribed amounts, by an individual, his spouse and their children under the
age of 21 years purchasing Class A Shares of the Fund for his, her or their own
account; (ii) a single purchase by a trustee or other fiduciary purchasing
shares for a single trust, estate or fiduciary account although more than one
beneficiary is involved; or (iii) a single purchase for the employee benefit
plans of a single employer. For further information, consult the Statement of
Additional Information or call 1-800-216-9785 or your broker.
CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A purchase of
additional Class A shares of the Fund may qualify for a Cumulative Quantity
Discount at the rate applicable to the discount bracket obtained by adding:
(i) the investor's current purchase;
(ii) the value (at the close of business on the day of the current
purchase) of all Class A Shares of the Fund held by the investor; and
(iii) the value of all shares described in paragraph (ii) owned by
another shareholder eligible to be combined with the investor's purchase into a
"single purchase" as defined above under "Combined Purchase Privilege."
For example, if you owned Class A Shares of the Fund worth $25,000 and
wished to purchase Class A Shares of the Fund worth an additional $30,000, the
sales charge for the $30,000 purchase would be at the 2.50% rate applicable to a
single $55,000 purchase of shares of the Fund, rather than the 5.50% rate.
An investor or participating broker must notify the Distributor
whenever a quantity discount or reduced sales charge is applicable to a purchase
and must provide the Distributor with sufficient information at the time of
purchase to verify that each purchase qualifies for the privilege or discount.
Upon such notification, the investor will receive the lowest applicable sales
charge. The quantity discounts described above may be modified or terminated at
any time.
LETTER OF INTENT. An investor may also obtain a reduced sales charge
by means of a written Letter of Intent, which expresses an intention to invest
not less than $50,000 within a period of 13 months in Class A Shares of the
Fund. Each purchase of shares under a Letter of Intent will be made at the
public offering price or prices applicable at the time of such purchase to a
single transaction of the dollar amount indicated in the Letter. At the
investor's option, a Letter of Intent may include purchases of Class A Shares of
the Fund made not more than 90 days prior to the date the Letter of Intent is
signed; however, the 13-month period during which the Letter is in effect will
begin on the date of the earliest purchase to be included and the sales charge
on any purchases prior to the Letter will not be adjusted.
Investors qualifying for the Combined Purchase Privilege described
above may purchase shares of the Fund under a single Letter of Intent. For
example, if at the time you sign a Letter of Intent to invest at least $100,000
in Class A Shares of the Fund, you and your spouse each purchase Class A Shares
of the Fund worth $30,000 (for a total of $60,000), it will only be necessary to
invest a total of $40,000 during the following 13 months in Class A Shares of
the Fund to qualify for the 1.50% sales charge on the total amount being
invested (the sales charge applicable to an investment of $100,000 in the Fund).
A Letter of Intent is not a binding obligation to purchase the full
amount indicated. The minimum initial investment under a Letter of Intent is 5%
of such amount. Shares purchased with the first 5% of such amount will be held
in escrow (while remaining registered in your name) to secure payment of the
higher sales charge applicable to the shares actually purchased in the event the
full intended amount is not purchased. If the full amount indicated is not
purchased, such escrowed shares will be involuntarily redeemed to pay the
additional sales charge applicable to the amount actually purchased, if
necessary. Dividends on escrowed shares, whether paid in cash or reinvested in
additional Fund shares, are not subject to escrow. When the full amount
indicated has been purchased, the escrow will be released.
If you wish to enter into a Letter of Intent in conjunction with your
initial investment in Class A Shares of the Fund, you should complete the
appropriate portion of the Account Application included with this Prospectus.
If you are a current Class A shareholder desiring to do so you can obtain a form
of Letter of Intent by calling 800-216-9785 or any broker participating in this
program.
SALES AT NET ASSET VALUE. The Fund may sell its Class A Shares at net
asset value without a sales charge: (1) to any Trustee or officer of the Fund;
(2) to any director or officer, or to any full-time employee or sales
representative (who has acted as such for at least 90 days), of the Adviser or
any subadviser hired by the Adviser, or of the Distributor; (3) to registered
representatives and employees of broker/dealers with whom the Distributor has
sales agreements; (4) to any qualified retirement plan for persons described
above; (5) to any officer, director or employee of a corporate affiliate of the
Adviser or the Distributor; (6) to any spouse, child, parent, grandparent,
brother or sister of any person named in (1), (2), (3) or (5) above; (7) to
employee benefit plans for employees of the Adviser, the Distributor and/or
their corporate affiliates; (8) to any employee or agent who retires from the
Adviser, the Distributor and/or a corporate affiliate of the Adviser or the
Distributor; (9) to any account held in the name of a qualified employee benefit
plan, endowment fund or foundation if, on the date of the investment, the plan,
fund or foundation has assets of $5,000,000 or more or at least 100
participants; (10) to any state, county, city, department, authority or similar
agency prohibited by law from paying a sales charge; or (11) any unallocated
accounts held by any third party administrators, registered investment advisers,
trust companies and bank trust departments which exercise discretionary
authority and hold the accounts in fiduciary, agency, custodial or similar
capacity, if in the aggregate such accounts equal or exceed $1,000,000; provided
that sales to persons listed in (1) through (11) above are made upon the written
assurance of the purchaser that the purchase is made for investment purposes and
that the shares so acquired will not be resold except to the Fund. As described
above, the Distributor will not pay any initial commission to dealers upon the
sale of Class A Shares to the purchasers described in this paragraph.
PARTICIPATING BROKERS. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem Fund Shares. Some
may establish higher minimum investment requirements than set forth above.
Firms may arrange with their clients for other investment or administrative
services. Such firms may independently establish and charge additional amounts
to their clients for such services, which charges would reduce clients' return.
Firms also may hold Fund Shares in nominee or street name as agent for and on
behalf of their customers. In such instances, the Fund's transfer agent will
have no information with respect to or control over accounts of specific
shareholders. Such shareholders may obtain access to their accounts and
information about their accounts only from their broker. In addition, certain
privileges with respect to the purchase and redemption of Shares or the
reinvestment of dividends may not be available through such firms. Some firms
may participate in a program allowing them access to their clients' accounts for
servicing including, without limitation, transfers of registration and dividend
payee changes; and may perform functions such as generation of confirmation
statements and disbursement of cash dividends. This Prospectus should be read
in connection with such firms' material regarding their fees and services.
DEFERRED SALES CHARGE ALTERNATIVE --
CLASS B SHARES
Class B Shares are sold at their current net asset value without any
initial sales charge. A contingent deferred sales charge ("CDSC") is imposed on
Class B Shares if an investor redeems an amount which causes the current value
of the investor's account for the Fund to fall below the total dollar amount of
purchase payments subject to the CDSC, except that no CDSC is imposed if the
Shares redeemed have been acquired through the reinvestment of dividends or
capital gains distributions or if the amount redeemed is derived from increases
in the value of the account above the amount of purchase payments subject to the
CDSC. All of an investor's purchase payments are invested in shares of the
Fund.
Whether a CDSC is imposed and the amount of the CDSC will depend on
the number of years since the investor made a purchase payment from which a
purchase payment for which an amount is being redeemed and the date such
purchase payment was made. Purchases are subject to the CDSC according to the
following schedule:
Year Since Purchase Percentage Contingent
Payment Was Made Deferred Sales Charge
-------------------- ---------------------
First 5
Second 4
Third 4
Fourth 3
Fifth 3
Sixth 2
Seventh 1
Eighth and Following 0
In determining whether a CDSC is payable, it is assumed that the
purchase payment from which the redemption is made is the earliest purchase
payment (from which a redemption or exchange has not already been effected).
The following example will illustrate the operation of the CDSC:
Assume that an individual opens an account and makes a purchase
payment of $10,000 for Class B Shares of the Fund and that six months later the
value of the investor's account for the Fund has grown through investment
performance and reinvestment of distributions to $11,000. The investor then may
redeem up to $1,000 from the Fund ($11,000 minus $10,000) without incurring a
CDSC. If the investor should redeem $3,000, a CDSC would be imposed on $2,000
of the redemption (the amount by which the investor's account for the Fund was
reduced below the amount of the purchase payment). At the rate of 5%, the CDSC
would be $100.
In determining whether an amount is available for redemption without
incurring a CDSC, the purchase payments made for all Class B Shares in the
shareholder's account with the Fund are aggregated, and the current value of all
such Shares is aggregated. Any sales charges imposed on redemptions are paid to
the Distributor.
Except as described below, for sales of Class B Shares made and
services rendered to Class B shareholders, the Distributor intends to make
payments to participating brokers, at the time the shareholder purchases Class B
shares, of up to 1% (representing .75% distribution fees and .25% servicing
fees) of the purchase amount. For sales of Class B shares made to participants
making periodic purchases of not less than $100 through certain employers' non-
qualified savings plans which are clients of a broker or dealer with which the
Distributor has an agreement with respect to such plans, no payments are made at
the time of purchase.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE. The CDSC applicable to
Class B Shares is currently waived for (i) any partial or complete redemption in
connection with a distribution without penalty under Section 72(t) of the
Internal Revenue Code of 1986, as amended (the "Code") from a qualified
retirement plan, including a Keogh or IRA (a) upon attaining age 59 1/2, (b) as
part of a series of substantially equal periodic payments, or (c) in the case of
an employer retirement plan, upon separation from service and attaining age 55;
(ii) any partial or complete redemption in connection with a qualifying loan
from an employer retirement plan; (iii) any complete redemption in connection
with a distribution from a qualified employer retirement plan in connection with
termination of employment or termination of the employer's plan and the transfer
to another employer's plan or to an IRA; (iv) any partial or complete redemption
following death or disability (as defined in the Code) of a shareholder
(including one who owns the Shares as joint tenant with his or her spouse) from
an account in which the deceased or disabled is named, provided the redemption
is requested within one year of the death or initial determination of
disability; (v) any redemption resulting from a return of an excess contribution
to a qualified employer retirement plan or an IRA; (vi) redemptions by trustees,
officers and employees of The Jefferson Fund Group Trust and by directors,
officers and employees of the Distributor and the Adviser; (vii) redemptions
effected pursuant to the Fund's right to involuntarily redeem a shareholder's
account if the aggregate net asset value of shares held in such shareholder's
account is less than a minimum account size specified in this Prospectus;
(viii) involuntary redemptions caused by operation of law; (ix) redemption of
shares of the Fund that is combined with another fund, investment company, or
personal holding company by virtue of a merger, acquisition or other similar
reorganization transaction; (x) redemptions by a shareholder who is a
participant making periodic purchases of not less than $100 through non-
qualified savings plans that are clients of a broker-dealer with which the
Distributor has an agreement with respect to such purchases; (xi) redemptions
effected by trustees or other fiduciaries who have purchased shares for
employer-sponsored plans, the administrator for which has an agreement with the
Distributor with respect to such purchases or (xii) certain periodic redemptions
under a Systematic Withdrawal Plan from an account meeting certain minimum
balance requirements, in amounts meeting certain maximums established from time
to time by the Distributor. The Distributor may require documentation prior to
waiver of the charge, including distribution letters, certification by plan
administrators, applicable tax forms, death certificates, physicians
certificates, etc.
For more information about the CDSC, call 800-216-9785.
HOW TO REDEEM
Shares may be redeemed through a participating broker, by telephone,
by submitting a written redemption request directly to the Transfer Agent (for
non-broker accounts) or through Fund Link.
A CDSC may apply to a redemption of Class B Shares. See "Purchase of
Shares." Shares are redeemed at their net asset value next determined after a
proper redemption request has been received, less any applicable CDSC. There is
no charge by the Distributor (other than applicable CDSC) with respect to
redemption; however, a participating broker who processes a redemption for an
investor may charge customary commissions for its services. Dealers and other
financial services firms are obligated to transmit orders promptly. Requests
for redemption received by dealers or other firms prior to the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern time) on a
regular business day and received by the Transfer Agent prior to the close of
the Distributor's business day will be confirmed at the net asset value
effective as of the closing of the Exchange on that day, less any applicable
CDSC.
DIRECT REDEMPTION: A shareholder's original Account Application
permits the shareholder to redeem by written request and by telephone (unless
the shareholder specifically elects not to utilize telephone redemptions) and to
elect one or more of the additional redemption procedures described below. A
shareholder may change the instructions indicated on his original Account
Application, or may request additional redemption options, only by transmitting
a written direction to the Transfer Agent. Requests to institute or change any
of the additional redemption procedures will require a signature guarantee.
Redemption proceeds will normally be mailed to the redeeming
shareholder within seven days or, in the case of wire transfer redemptions, sent
to the designated bank account within one business day. Fund Link redemptions
may be received by the bank on the third business day. In cases where shares
have recently been purchased by personal check, redemption proceeds will be
mailed upon the clearance of the personal check which may take up to 15 days or
more. To avoid such delay, investors should purchase shares by certified or
bank check or by wire transfer.
WRITTEN REQUESTS. (Does not apply to shares held in broker "street
name" accounts.) To redeem Shares in writing a shareholder must send the
following items to: The Jefferson Fund Group Trust, c/o Firstar Trust Company,
P.O. Box 701, Milwaukee, Wisconsin 53201-0701: (1) a written request for
redemption signed by all registered owners exactly as the account is registered
on the Transfer Agent's records, including fiduciary titles, if any, and
specifying the account number and the dollar amount or number of Shares to be
redeemed; (2) for certain redemptions described below, a guarantee of all
signatures on the written request or, if required, as described under "Signature
Guarantee"; and (3) any additional documents which may be required by the
Transfer Agent for redemption by corporations, partnerships or other
organizations, executors, administrators, trustees, custodians or guardians, or
if the redemption is requested by anyone other than the shareholder(s) of
record. Redemption requests sent by overnight or express mail should be
directed to: The Jefferson Fund Group Trust, c/o Firstar Trust Company, Mutual
Fund Services, 3rd Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202.
Transfers of shares are subject to the same requirements. A signature
guarantee is not required for redemptions of $50,000 or less, requested by and
payable to all shareholders of record for the account, to be sent to the address
of record for that account. To avoid delay in redemption or transfer,
shareholders having any questions about these requirements should contact the
Transfer Agent in writing or by calling 1-800-216-9785 before submitting a
request. If a redemption request is inadvertently sent to the Fund, it will be
promptly forwarded to Firstar Trust Company, but the effective date of
redemption will be delayed until the request is received by Firstar Trust
Company. Requests for redemption by telegram and requests which are subject to
any special conditions or which specify an effective date other than as provided
herein cannot be honored. REDEMPTION OR TRANSFER REQUESTS WILL NOT BE HONORED
UNTIL ALL REQUIRED DOCUMENTS IN THE PROPER FORM HAVE BEEN RECEIVED BY THE
TRANSFER AGENT.
Shareholders who have an IRA must indicate on their redemption
requests whether or not to withhold federal income tax. Unless otherwise
indicated, these redemptions, as well as redemptions of other investment plans
not involving a direct rollover to an eligible plan, will be subject to federal
income tax withholding.
If the proceeds of the redemption (i) exceed $50,000, (ii) are to be
paid to a person other than the record owner, (iii) are to be sent to an address
other than the address of the account on the Transfer Agent's records, or (iv)
are to be paid to a corporation, partnership, trust or fiduciary, the
signature(s) on the redemption request must be guaranteed as described above,
except that the Distributor may waive the signature guarantee requirement for
redemptions up to $2,500 by a trustee of a qualified retirement plan, the
administrator for which has an agreement with the Distributor.
TELEPHONE REDEMPTIONS. (Does not apply to shares held in broker
"street name" accounts.) The Fund accepts telephone requests for redemption of
shares for amounts from $1,000 up to $50,000 within any 7 calendar day period,
except for investors who have specifically declined telephone redemption
privileges on the Account Application or elected in writing not to utilize
telephone redemptions. The proceeds of a telephone redemption will be sent to
the record shareholder at his record address. Changes in account information
must be made in a written authorization with a signature guarantee. See
"Signature Guarantee" under "General." Telephone redemptions will not be
accepted during the 30-day period following any change in an account's record
address.
By completing an Account Application, an investor agrees that the
Fund, the Distributor and the Transfer Agent shall not be liable for any loss
incurred by the investor by reason of the Fund accepting unauthorized telephone
redemption requests for his account if the Fund reasonably believes the
instructions to be genuine. Thus, shareholders risk possible losses in the
event of a telephone redemption not authorized by them. The Fund may accept
telephone redemption instructions from any person identifying himself as the
owner of an account or the owner's broker where the owner has not declined in
writing to utilize this service. The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and may be
liable for any losses due to unauthorized or fraudulent instructions if it fails
to employ such procedures. The Fund will require a form of personal
identification prior to acting on a caller's telephone instructions, will
provide written confirmations of such transactions and will record telephone
instructions.
A shareholder making a telephone redemption should call the Transfer
Agent at 800-216-9785 and state (i) the name of the shareholder as it appears on
the Transfer Agent's records, (ii) his account number with the Fund, (iii) the
amount to be withdrawn and (iv) the name of the person requesting the
redemption. Usually the proceeds are sent to the investor on the next Fund
business day after the redemption is effected, provided the redemption request
is received prior to the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m. Eastern time) that day. If the redemption request is
received after the closing of the New York Stock Exchange, the redemption is
effected on the following Fund business day at that day's net asset value and
the proceeds are usually sent to the investor on the second following Fund
business day. The Fund reserves the right to terminate or modify the telephone
redemption service at any time. During times of severe disruptions in the
securities markets, the volume of calls may make it difficult to redeem by
telephone, in which case a shareholder may wish to send a written request for
redemption as described under "Written Requests" above. Telephone
communications may be recorded by the Distributor or the Transfer Agent.
FUND LINK REDEMPTIONS. (Does not apply to shares held in broker
"street name" accounts.) If a shareholder has established Fund Link, the
shareholder may redeem shares by telephone and have the redemption proceeds sent
to a designated account at a financial institution. Fund Link is normally
established within 15 days of receipt of the Application by the Transfer Agent.
To use Fund Link for redemptions, call the Transfer Agent at 800-216-9785.
Subject to the limitations set forth above under "Telephone Redemptions," the
Distributor, the Fund and the Transfer Agent may rely on instructions by any
registered owner believed to be genuine and will not be responsible for any loss
or expense arising out of such instructions. Requests received by the Transfer
Agent prior to the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m. Eastern time) on a business day will be processed at the net
asset value on that day and the proceeds (less any CDSC) will normally be sent
to the designated bank account on the following business day and received by the
bank on the second or third business day. If the redemption request is received
after the close of regular trading on the New York Stock Exchange, the
redemption is effected on the following business day. Shares purchased by check
may not be redeemed through Fund Link until such shares have been owned (i.e.,
paid for) for at least 15 days. Changes in bank account information must be
made by completing a new Supplemental Application, signed by all owners of
record of the account, with all signatures guaranteed. See "Signature
Guarantee" under "General." See "Fund Link" under "Purchase of Shares" for
information on establishing the Fund Link privilege. The Fund may terminate the
Fund Link program at any time without notice to shareholders.
EXPEDITED WIRE TRANSFER REDEMPTIONS. (Does not apply to shares held
in broker "street name" accounts.) If a shareholder has given authorization for
expedited wire redemption, shares can be redeemed and the proceeds sent by
federal wire transfer to a single previously designated bank account. Requests
received by the Fund prior to the close of the New York Stock Exchange will
result in shares being redeemed that day at the next determined net asset value
(less any CDSC) and normally the proceeds being sent to the designated bank
account the following business day. The bank must be a member of the Federal
Reserve wire system. Delivery of the proceeds of a wire redemption request may
be delayed by the Fund for up to 7 days if the Transfer Agent deems it
appropriate under then current market conditions. Once authorization is on
file, the Fund will honor requests by any person identifying himself as the
owner of an account or the owner's broker by telephone at 800- 216-9785 or by
written instructions. The Fund cannot be responsible for the efficiency of the
Federal Reserve wire system or the shareholder's bank. The Transfer Agent
currently charges a $10.00 fee for each payment of redemption proceeds made by
wire, which will be deducted from the shareholder's account. The shareholder is
responsible for any charges imposed by the shareholder's bank. The minimum
amount that may be wired is $1,000. The Fund reserves the right to change this
minimum or to terminate the wire redemption privilege. Shares purchased by
check may not be redeemed by wire transfer until such shares have been owned
(i.e. paid for) for at least 15 days. To change the name of the single bank
account designated to receive wire redemption proceeds, it is necessary to send
a written request with signatures guaranteed to The Jefferson Fund Group Trust,
c/o Firstar Trust Company, Mutual Fund Services, P.O. Box 701, Milwaukee,
Wisconsin 53201 or via express mail or overnight courier to The Jefferson Fund
Group Trust, c/o Firstar Trust Company, Mutual Fund Services, 3rd Floor, 615
East Michigan Street, Milwaukee, Wisconsin 53202. See "Signature Guarantee"
under "General."
SYSTEMATIC WITHDRAWAL PLAN. An investor who owns or buys shares of
the Fund having a net asset value of $10,000 or more may open a Systematic
Withdrawal plan and have a designated sum of money (not less than $100) paid
monthly to the investor or another person. Such a plan may be established by
completing the appropriate section of the Supplemental Application. If a
Systematic Withdrawal Plan is set up after the account is established providing
for payment to a person other than the record shareholder or to an address other
than the address of record, a signature guarantee is required. See "Signature
Guarantee" under "General." Shares of either class of the Fund are deposited in
a plan account and all distributions are reinvested in additional shares of that
class of the Fund at net asset value. Shares in a plan account are then
redeemed at net asset value (less any applicable CDSC) to make each withdrawal
payment. The CDSC applicable to Class B shares is waived for certain
redemptions under a plan. See "Waiver of Contingent Deferred Sales Charges"
under "Deferred Sales Charge Alternative -- Class B Shares" above.
Redemptions for the purpose of withdrawals are ordinarily made on the
business day preceding the day of payment at that day's closing net asset value
and checks are mailed on the day after the day of payment selected by the
shareholder in the Supplemental Application. Payment will be made to any person
the investor designates; however, if the shares are registered in the name of a
trustee or other fiduciary, payment will be made only to the fiduciary, except
in the case of a profit-sharing or pension plan where payment will be made to
the designee. As withdrawal payments may include a return of principal, they
cannot be considered a guaranteed annuity or actual yield of income to the
investor. The redemption of shares in connection with Systematic Withdrawal
plan may result in a gain or loss for tax purposes. Continued withdrawals in
excess of income will reduce and possibly exhaust invested principal, especially
in the event of a market decline. The maintenance of a Systematic Withdrawal
plan concurrently with purchases of additional shares of the Fund would be
disadvantageous to the investor because of the CDSC that may become payable on
such withdrawals in the case of Class B shares and because of the initial sales
charge in the case of Class A shares. For this reason, the minimum investment
accepted for the Fund while a Systematic Withdrawal plan is in effect is $1,000,
and an investor may not maintain a plan for the accumulation of shares of the
Fund (other than through reinvestment of distributions) and a Systematic
Withdrawal plan at the same time. The cost of administering the Systematic
Withdrawal plans for the benefit of those shareholders participating in them is
borne by the Fund as an expense of all shareholders. The Fund or the
Distributor may terminate or change the terms of the Systematic Withdrawal plan
at any time.
Because the Systematic Withdrawal plan may involve invasion of
capital, investors should consider carefully with their own financial advisers
whether the plan and the specified amounts to be withdrawn are appropriate in
their circumstances. The Fund and the Distributor make no recommendations or
representations in this regard.
EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset
value any or all of an investment in the Fund for shares of any of the other
mutual funds in the Jefferson family of funds. Class A and Class B shares may
be exchanged only for Class A and Class B shares, respectively of another mutual
fund in the Jefferson family of funds on the basis of relative net asset value.
For purposes of the Exchange Privilege, exchanges into shares of a Jefferson
fund that does not have more than one class will be treated as the same Class as
the shares owned of the transferring fund. For example, if an investor owned
Class B shares of the Fund and exchanged those shares into a fund that does not
have Class B shares, the CDSC would not be paid at the time of the exchange.
Instead, the shares of the new Jefferson Fund would be deemed "Class B shares"
for the purpose of determining the applicable holding period for payment of
CDSC, and for purposes of assessing the CDSC payable upon the sale of the
exchanged shares, the holding period of the exchanged shares shall be added to
the holding period of the original Class B shares.
With respect to Class B shares subject to a CDSC, if less than all of
an investment is exchanged out of the Fund, any portion of the investment
attributable to capital appreciation and/or reinvested dividends or capital
gains distributions will be exchanged first, and thereafter any portions
exchanged will be from the earliest investment made in the Fund from which the
exchange was made. Shareholders should take into account the effect of any
exchange on the applicability of any CDSC that may be imposed upon any
subsequent redemption.
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS
Rodman & Renshaw is the principal underwriter of the Fund shares and
in that capacity makes distribution and servicing payments to participating
brokers in connection with the sale of Class B Shares, servicing payments for
Class A Shares (in the case of Class A Shares, participating brokers are
compensated based on the amount of the front-end sales charge, except in cases
where Class A Shares are sold without a front-end sales charge) and, pursuant to
a Distribution Agreement with the Fund with respect to each Fund's Class A and
Class B Shares, bears various other promotional and sales related expenses,
including the cost of printing and mailing prospectuses to persons other than
shareholders.
CLASS A SERVICING FEES: As compensation for services rendered and
expenses borne by the Distributor in connection with personal services rendered
to Class A shareholders of the Fund and the maintenance of Class A shareholder
accounts, the Fund pays the Distributor servicing fees of up to .25% annually
(calculated as a percentage of the Fund's average daily net assets attributable
to Class A Shares).
CLASS B DISTRIBUTION AND SERVICING FEES: As compensation for services
rendered and expenses borne by the Distributor in connection with the
distribution of Class B Shares of the Fund and in connection with personal
services rendered to Class B shareholders of the Fund and the maintenance of
Class B shareholder accounts, the Fund pays the Distributor annual distribution
and servicing fees of up to .75% and .25%, respectively, (calculated as a
percentage of the Fund's average daily net assets attributable to Class B
Shares).
The Class A servicing fees and Class B servicing and distribution
fees paid to the Distributor are made under Distribution and Servicing Plans
adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The distribution fee applicable to Class B Shares may be spent by the
Distributor on any activities or expenses primarily intended to result in the
sale of Class B Shares of the Fund, including compensation to, any expenses
(including overhead and telephone expenses) of, financial consultants or other
employees of the Distributor or of participating or introducing brokers who
engage in distribution of Class B Shares, printing of prospectuses and reports
for other than existing Class B shareholders, advertising and preparation,
printing and distribution of sales literature. The servicing fee, applicable to
both Class A and Class B Shares of the Fund, may be spent by the Distributor on
personal services rendered to shareholders of the Fund and the maintenance of
shareholder accounts, including compensation to, and expenses (including
telephone and overhead expenses) of, financial consultants or other employees of
the Distributor or of participating or introducing brokers who aid in the
processing of purchase or redemption requests or the processing of dividend
payments, who provide information periodically to shareholders showing their
positions in the Fund's shares, who forward communications from the Fund to
shareholders, who render ongoing advice concerning the suitability of particular
investment opportunities offered by the Fund in light of the shareholders'
needs, who respond to inquiries from shareholders relating to such services, or
who train personnel in the provision of such services. Distribution and
servicing fees may also be spent on interest relating to unreimbursed
distribution or servicing expenses from prior years.
The Distributor may from time to time pay additional cash bonuses or
other incentives to selected participating brokers in connection with the sale
or servicing of Class A and/or Class B Shares of the Fund. On some occasions,
such bonuses or incentives may be conditioned upon the sale of a specified
minimum dollar amount of the Shares of the Fund or a particular class of Shares,
during a specific period of time. The Distributor currently expects that such
additional bonuses or incentives will not exceed .25% of the amount of any sale.
The Distributor has entered into a consulting agreement with Matrix
Venture Funds, Inc., a company controlled by Lawrence Kujawski, a trustee of the
Fund, pursuant to which Matrix Venture Funds, Inc. provides certain marketing
and strategic planning advice to Distributor in return for a consulting fee.
RETIREMENT PLANS
The Fund offers the following retirement plans that may be funded with
purchases of Shares and may allow investors to shelter some of their income from
taxes:
INDIVIDUAL RETIREMENT ACCOUNT ("IRA"). Individuals who receive
compensation or earned income, even if they are active participants in a
qualified retirement plan (or certain similar retirement plans), may establish
their own tax-sheltered IRA. The Fund offers a prototype IRA plan which may be
adopted by individuals. There is currently no charge for establishing an
account, although there is an annual maintenance fee of $12.50. The minimum
initial IRA investment is $250 and the minimum subsequent IRA investment is
$100.
Earnings on amounts held in an IRA are not taxed until withdrawal.
However, the amount of deduction, if any, allowed for IRA contributions is
limited for individuals who are active participants in an employer maintained
retirement plan and whose incomes exceed specific limits.
SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP/IRA"). The Fund also offers a
prototype SEP/IRA for employers, including self-employed individuals, who wish
to purchase Shares with tax-deductible contributions not exceeding annually for
any one participant the lesser of $22,500 or 15% of earned income. Under this
plan, employer contributions are made directly to the IRA accounts of eligible
participants.
DEFINED CONTRIBUTION RETIREMENT PLAN (KEOGH OR CORPORATE PROFIT-
SHARING AND MONEY-PURCHASE PLANS). A prototype defined contribution retirement
plan is available for employers, including self-employed individuals, who wish
to purchase Shares with tax-deductible contributions not exceeding annually for
any one participant the lesser of $30,000 or 25% of earned income.
CASH OR DEFERRED 401(K) PLAN. A prototype cash or deferred 401(k)
plan is available for employers who wish to allow employees to elect to reduce
their compensation and have such amounts contributed to the plan, not to exceed
$9,240 annually (as adjusted for cost-of-living increases).
A description of applicable service fees and certain limitations on
contributions and withdrawals, as well as application forms, are available from
the Fund upon request. The IRA documents contain a disclosure statement which
the Internal Revenue Service requires to be furnished to individuals who are
considering adopting an IRA. Because a retirement program involves commitments
covering future years, it is important that the investment objective of the Fund
be consistent with the participant's retirement objectives. Premature
withdrawals from a retirement plan will result in adverse tax consequences. The
amounts eligible for investment in retirement plans may change at any time due
to changes in the Internal Revenue Code or any regulation promulgated
thereunder.
DIVIDEND REINVESTMENT
Shareholders may elect to have all income dividends and capital gains
distributions reinvested or paid in cash, or to have dividends reinvested and
capital gains distributions paid in cash or capital gains distributions
reinvested and income dividends paid in cash. Shareholders having dividends
and/or capital gains distributions paid in cash may choose to have such amounts
automatically deposited to their checking or savings accounts. See the Share
purchase application form included at the back of this Prospectus for further
information. If a shareholder does not specify an election, all income
dividends and capital gains distributions will automatically be reinvested in
full and fractional Shares calculated to the nearest 1,000th of a Share. Shares
are purchased at the net asset value in effect on the business day after the
dividend record date and are credited to the shareholder's account on the
dividend payment date. Shareholders will be advised of the number of Shares
purchased and the price following each reinvestment. An election to reinvest or
receive dividends and distributions in cash will apply to all Shares registered
in the same name, including those previously purchased. See "DIVIDENDS,
DISTRIBUTIONS AND TAXES" for tax consequences.
A shareholder may change an election at any time by notifying the Fund
in writing. If such a notice is received between a dividend declaration date
and payment date, it will become effective on the day following the payment
date. The Fund may modify or terminate its dividend reinvestment program at any
time on thirty days' written notice to participants.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to qualify annually for and elect tax treatment
applicable to a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). Pursuant to the requirements of
the Code, the Fund intends to distribute substantially all of its net investment
income and net realized capital gains, if any, less any available capital loss
carry-over, to its shareholders annually so as to avoid paying income tax on its
net investment income and net realized capital gains or being subject to a
federal excise tax on undistributed net investment income and net realized
capital gains. For federal income tax purposes, distributions by the Fund,
whether invested in additional Shares or received in cash, will be taxable to
the Fund's shareholders except those shareholders that are not subject to tax on
their income.
Shareholders will be notified annually as to the federal tax status of
dividends and distributions. For federal income tax purposes, a shareholder's
original cost for his Shares continues as his basis and on redemption his gain
or loss is the difference between such basis and the redemption price.
Distributions and redemptions may also be taxed under state and local tax laws
which may differ from the Code.
Dividends paid in cash by the Fund will respect to its Class A and
Class B Shares are calculated in the same manner and at the same time and will
be in the same amount relative to the aggregate net asset value of the Shares in
each class, except that dividends on Class B Shares are expected to be lower
than dividends on Class A shares as a result of the distribution fee applicable
to Class B Shares. Currently, the Fund declares and pays dividends quarterly
and distributes capital gains annually.
The foregoing is only a brief summary of some of the important federal
income tax considerations generally affecting the Fund and its shareholders, is
not intended as a substitute for careful tax planning and is based on tax laws
and regulations which are in effect on the date of this Prospectus. Such laws
and regulations may be changed by legislative or administrative action.
Accordingly, investors in the Fund should consult their tax advisers with
specific reference to their own tax situation.
BROKERAGE TRANSACTIONS
The Agreement authorizes the Adviser to select the brokers or dealers
that will execute the purchases and sales of the Fund's portfolio securities.
In placing purchase and sale orders for the Fund, it is the policy of the
Adviser to seek the best execution of orders at the most favorable price in
light of the overall quality of brokerage and research services provided.
The Agreement permits the Adviser to pay a broker which provides
brokerage and research services to the Adviser a commission for effecting
securities transactions in excess of the amount another broker would have
charged for executing the transaction, provided the Adviser believes this to be
in the best interests of the Fund. In effecting purchases and sales of the
Fund's portfolio securities, the Adviser may replace orders with, and pay
brokerage commissions to, the Distributor or investment dealers, if any, with
which the Distributor executes sales agreements when it reasonably believes the
commissions and the transaction quality are comparable to that available from
other qualified brokers. In selecting among firms to handle a particular
transaction, the Adviser may take into account whether the firm has sold, or is
selling, shares of the Fund.
CAPITAL STRUCTURE
The Fund's authorized capital consists of an unlimited number of
Shares. Shareholders are entitled: (i) to one vote per full Share; (ii) to
such distributions as may be declared by the Fund's Trustees out of funds
legally available; and (iii) upon liquidation, to participate ratably in the
assets available for distribution. There are no conversion or sinking fund
provisions applicable to the Shares, and the holders have no preemptive rights
and may not cumulate their votes in the election of Trustees. Consequently, the
holders of more than 50% of the Shares voting for the election of Trustees can
elect all the Trustees, and in such event, the holders of the remaining Shares
voting for the election of Trustees will not be able to elect any persons as
Trustees. The Fund does not anticipate holding an annual meeting in any year in
which the election of Trustees is not required to be acted on by shareholders
under the Investment Company Act of 1940. The Fund's Trust Instrument contains
provisions for the removal of Trustees by the shareholders.
The Shares are redeemable and are transferable. All Shares issued and
sold by the Fund will be fully paid and nonassessable. Fractional Shares
entitle the holder to the same rights as whole Shares. Firstar Trust Company,
615 East Michigan Street, Milwaukee, Wisconsin 53202 acts as the Fund's transfer
agent and dividend disbursing agent.
The Fund will not issue certificates evidencing Shares purchased.
Each shareholder's account will be credited with the number of Shares purchased,
relieving shareholders of responsibility for safekeeping of certificates and the
need to deliver them upon redemption. Written confirmations are issued for all
purchases of Shares.
Pursuant to the Trust Instrument, the Trustees may establish and
designate one or more separate and distinct series of Shares, each of which
shall be authorized to issue an unlimited number of Shares. In addition, the
Trustees may, without obtaining any prior authorization or vote of shareholders,
redesignate or reclassify any issued Shares of any series. In the event that
more than one series is established, each Share outstanding, regardless of
series, would still entitle its holder to one (1) vote. As a general matter,
Shares would be voted in the aggregate and not by series, except where class
voting would be required by the Investment Company Act of 1940 (e.g., change in
investment policy or approval of an investment advisory agreement). All
consideration received from the sale of Shares of any series, together with all
income, earnings, profits and proceeds thereof, would belong to that series and
would be charged with the liabilities in respect of that series and of that
series' share of the general liabilities of the Fund in the proportion that the
total net assets of the series bear to the total net assets of all series. The
net asset value of a Share of any series would be based on the assets belonging
to that series less the liabilities charged to that series, and dividends could
be paid on Shares of any series only out of lawfully available assets belonging
to that series. In the event of liquidation or dissolution of the Fund, the
shareholders of each series would be entitled, out of the assets of the Fund
available for distribution, to the assets belonging to that series.
The Fund's Trust Instrument contains an express disclaimer of
shareholder liability for its acts or obligations and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Fund or its Trustees. The Trust Instrument provides for
indemnification and reimbursement of expenses out of the Fund's property for any
shareholder held personally liable for its obligations. The Trust Instrument
also provides that the Fund shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon.
The Trust Instrument further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law, but nothing in the
Trust Instrument protects a Trustee against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.
SHAREHOLDER REPORTS
Shareholders will be provided at least semi-annually with a report
showing the Fund's portfolio and other information and annually after the close
of the Fund's fiscal year, which ends October 31st, with an annual report
containing audited financial statements. Shareholders who have questions about
the Fund should write to: The Jefferson Fund Group Trust, c/o Firstar Trust
Company, Mutual Funds Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
Overnight and express mail should be sent to: The Jefferson Fund Group Trust,
c/o Firstar Trust Company, Mutual Fund Services, 3rd Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202. Questions about individual accounts may be
directed toll free to Firstar Trust Company at (800) 216-9785.
PERFORMANCE INFORMATION
The Fund may provide from time to time in advertisements, reports to
shareholders and other communications with shareholders its average annual
compounded rate of return as well as its total return and cumulative total
return. An average annual compounded rate of return refers to the rate of
return which, if applied to an initial investment at the beginning of a stated
period and compounded over the period, would result in the redeemable value of
the investment at the end of the stated period assuming reinvestment of all
dividends and distributions and reflecting the effect of all recurring fees.
Total return and cumulative total return similarly reflect net investment income
generated by, and the effect of any realized and unrealized appreciation or
depreciation of, the underlying investments of the Fund for the stated period,
assuming the reinvestment of all dividends and distributions and reflecting the
effect of all recurring fees. Total return figures are not annualized or
compounded and represent the aggregate percentage of dollar value change over
the period specified. Cumulative total return reflects the Fund's total
return since inception. An investor's principal in the Fund and the Fund's
return are not guaranteed and will fluctuate according to market conditions.
The Fund may compare its performance to other mutual funds with
similar investment objectives and to the industry as a whole, as reported by
Value Line, Weisberger's Encyclopedia of Institutional Funds, Lipper Analytical
Services, Inc., Morningstar, Inc., Money Manager Review, Money, Forbes, Business
Week and Barron's magazines, The Wall Street Journal and Investor's Business
Daily. (Value Line, Lipper Analytical Services, Inc., Morningstar, Inc. and
Money Manager Review are independent fund ranking services that rank mutual
funds based upon total return performance.) The Fund may also compare its
performance to the Dow Jones Industrial Average, NASDAQ Composite Index, NASDAQ
Industrials Index, Value Line Composite Index, the Standard & Poor's 500 Stock
Index and the Consumer Price Index. Such comparisons may be made in
advertisements, shareholder reports or other communications to shareholders.
HISTORICAL PERFORMANCE DATA FOR THE ADVISER
Set forth below is historical performance data relating to the
Adviser, which is provided to illustrate past performance in managing portfolios
similar to The Jefferson Growth and Income Fund. The officer of the Adviser
responsible for managing the investments described below is the officer
responsible for managing the investment portfolio of the Fund. The data below
does not reflect all of the assets under management and may not accurately
reflect the performance of all private accounts managed by the Adviser, but do
reflect all of the Adviser's assets under management with investment objectives
similar to the Fund. The accounts to which the data below relates had the same
investment objectives as the Fund and were managed using substantially similar,
though not in all cases, identical, investment strategies and techniques as
those contemplated for use by the Fund. All performance data presented is
historical and investors should not consider this performance data as an
indication of the future performance of the Fund or the results an individual
investor might achieve by investing in the Fund. Investors should not rely on
the historical performance of the Adviser when making an investment decision
with respect to the Fund.
All returns quoted are time-weighted total rates of return and include
the reinvestment of dividends and interest. Performance results are presented
net of all transaction costs, commissions and management and custodial fees
charged by the Adviser (except for the period January 1, 1993 through December
31, 1995 where performance results are presented before management and custodial
fees). The annual management fees and other expenses of each of the Adviser's
accounts to which the data below relate averaged 1.05% whereas the total
operating expenses of the Class A Shares and Class B Shares of the Fund are
expected to be 1.15% and 1.90%, respectively.
All information presented is based on data supplied by the Adviser or
from statistical services, reports or other sources believed by the Adviser to
be reliable. Such information was examined by Smrecek & Co., S.C. in accordance
with standards established by the American Institute of Certified Public
Accountants and the Level II requirements for verification established by the
Association for Investment Management and Research.
1988 1989 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ---- ---- ----
Annual Rates of 17.3% 28.2% 17.5% 29.3% 12.6% 11.2% 1.6% 16.74%
Return for the
Period Ending
December 31(1)<F13>
Benchmark 12.1% 22.9% 2.7% 23.4% 7.7% 10.6% (0.3%) 26.03%
Return (2)<F14>
8 YEARS 5 YEARS 3 YEARS 1 YEAR
----- ----- ----- ----
Compounded Annual Rates for the 16.26% 13.55% 9.06% 16.74%
Period Ending
December 31(1)<F13>
Benchmark Return (2)<F14> 11.77% 10.77% 9.28% 26.03%
(1)<F13>The calculation of the rates of return was performed in accordance with
the Performance Presentation Standards endorsed by the Association for
Investment Management and Research ("AIMR"). Other performance calculation
methods may produce different results. The AIMR performance presentation
criteria require the presentation of at least a ten-year performance record
or performance for the period since inception, if shorter. The Adviser has
presented eight-year performance rather than ten-year performance because
the Adviser's composite of 1986 and 1987 that was comparable to the Fund
was not of a sufficient size or number to be statistically meaningful.
Total annual rate of return is the change in redemption value of units
purchased with an initial $1,000 investment, assuming the reinvestment of
dividends paid. Compounded annual rate of return represents the level
annual rate which, if earned for each year in a multiple year period, would
produce the cumulative rate of return over that period. For purposes of
computing the rates of return, the accounts were valued on a trade date
basis.
(2)<F14>The Benchmark Return consists of the return of the S&P 500 Index
(weightedat 50%) and the Lehman Government/Corporate Index (weighted at
50%). The S&P 500 Index is a widely recognized index of market activity
based on the aggregate performance of a selected, unmanaged portfolio of
publicly traded common stocks. The Lehman Government/Corporate Index
includes fixed-rate U.S. Treasury, U.S. Government Agency and U.S.
corporate debt and dollar denominated debt securities of certain foreign
entities. The performance data includes reinvested dividends.
Past performance may not be indicative of future rates of return on the
Fund, and the results for individual funds and for different periods may vary.
Investors should also be aware that other performance calculation methods may
produce different results, and that comparisons of investment results should
consider qualitative circumstances and should be made only for portfolios with
generally similar investment objectives.
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
---------------------------------
As set forth under the caption "INVESTMENT OBJECTIVES AND POLICIES ,"
the Fund may invest a portion of its total assets in publicly distributed debt
securities assigned one of the six highest ratings of either Standard & Poor's
Corporation ("Standard & Poor's") or Moody's Investors Services, Inc.
("Moody's"). A brief description of the ratings symbols and their meanings
follows.
STANDARD & POOR'S DEBT RATINGS. A Standard & Poor's corporate debt
-------------------------------
rating is a current assessment of the creditworthiness of an obligor with
respect to a specific obligation. This assessment may take into consideration
obligors such as guarantors, insurers or lessees.
The debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
The ratings are based on current information furnished by the issuer
or obtained by Standard & Poor's from other sources it considers reliable.
Standard & Poor's does not perform any audit in connection with any rating and
may, on occasion, rely on unaudited financial information. The ratings may be
changed, suspended or withdrawn as a result of changes in, or unavailability of,
such information, or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default - capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal
in accordance with the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights;
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in the higher rated
categories.
BBB -- Debt rated BBB are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
BB, B -- Debt rated BB and B are regarded, on balance, as
predominately speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
MOODY'S BOND RATINGS.
--------------------
Aaa - Bonds which are rated Aaa are judged to be the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large, or by an
exceptionally stable, margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds which are Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
----
Interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and thereby
not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Moody's bond rating symbols may contain numerical modifiers of a
generic rating classification. The modifier 1 indicates that the bond ranks at
the higher end of its category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
FIRSTAR TRUST COMPANY
615 East Michigan Street
Milwaukee, Wisconsin 53202
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER
Suite 3300
330 North Wabash Avenue
Chicago, Illinois 60611
DISTRIBUTOR
RODMAN & RENSHAW, INC.
233 S. Wacker Drive
Suite 4500
Chicago, Illinois 60606
INVESTMENT ADVISER
UNIPLAN, INC.
839 North Jefferson Street
Milwaukee, Wisconsin 53202
THE JEFFERSON FUND GROUP TRUST
(800) 216-9785
P R O S P E C T U S
THE JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND INCOME FUND
A MUTUAL FUND
SEEKING LONG-TERM
CAPITAL APPRECIATION AND
CURRENT INCOME
BOARD OF TRUSTEES
Keith Pinsoneault
Chicago, Illinois
Richard Imperiale
Milwaukee, Wisconsin
Lawrence Kujawski
Milwaukee, Wisconsin
John Komives
Milwaukee, Wisconsin
J. Michael Borden
Delavan, Wisconsin
Dennis Lasser
Binghamton, New York
James L. Stanko
Rancho Santa Fe, California
STATEMENT OF ADDITIONAL INFORMATION February 29, 1996
-----------------------------------
THE JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND INCOME FUND
This Statement of Additional Information is not a Prospectus
and should be read in conjunction with the Prospectus of The Jefferson Fund
Group Trust's Jefferson Growth and Income Fund dated February 29, 1996.
Requests for copies of the Prospectus should be made in writing to The
Jefferson Fund Group Trust, c/o Firstar Trust Company, Mutual Fund
Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701, or by calling
(800) 216-9785.
THE JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND INCOME FUND
Table of Contents
-----------------
Page No.
--------
INVESTMENT RESTRICTIONS -1-
INVESTMENT CONSIDERATIONS -4-
CONTINGENT DEFERRED SALES CHARGE (CLASS B SHARES)
AND INITIAL SALES CHARGE (CLASS A SHARES)
-17-
EXCHANGE PRIVILEGE -18-
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS -19-
TRUSTEES AND OFFICERS OF THE FUND-22-
INVESTMENT ADVISOR, ADMINISTRATOR, CUSTODIAN, TRANSFER AGENT
AND ACCOUNTING SERVICES AGENT -25-
DETERMINATION OF NET ASSET VALUE -27-
CALCULATION OF TOTAL RETURN -27-
ALLOCATION OF PORTFOLIO BROKERAGE -30-
TAXES -32-
SHAREHOLDER MEETINGS -33-
INDEPENDENT ACCOUNTANTS -34-
FINANCIAL STATEMENTS -35-
No person has been authorized to give any information or to make
any representations other than those contained in this Statement of
Additional Information and the Prospectus dated February 29, 1996, and, if
given or made, such information or representations may not be relied upon
as having been authorized by The Jefferson Fund Group Trust.
This Statement of Additional Information does not constitute an
offer to sell securities.
INVESTMENT RESTRICTIONS
As set forth in the prospectus dated February 29, 1996 of The
Jefferson Fund Group Trust relating to its mutual fund, the Jefferson
Growth and Income Fund (the "Fund") under the caption "INVESTMENT
OBJECTIVES AND POLICIES", the primary investment objectives of the Fund are
to produce long -term capital appreciation and current income principally
through investing in equity securities.
Fundamental Investment Restrictions
Consistent with its investment objectives, the Fund has adopted
the following investment restrictions which are matters of fundamental
policy and cannot be changed without approval of the holders of the lesser
of: (i) 67% of the Fund's shares present or represented at a shareholder's
meeting at which the holders of more than 50% of such shares are present or
represented; or (ii) more than 50% of the outstanding shares of the Fund.
1. The Fund will not purchase securities on margin or
participate in a joint-trading account.
2. The Fund will not borrow money or issue senior securities,
except for temporary bank borrowings for emergency or extraordinary
purposes (but not for the purpose of purchase of investments) and then only
in an amount not in excess of 5% of the value of its total assets and will
not pledge any of its assets except to secure borrowings. The Fund will
not purchase securities while it has any outstanding borrowings.
3. The Fund will not make short sales of securities or maintain
a short position for the account of the Fund unless at all times when a
short position is open the Fund owns an equal amount of such securities or
owns securities which, without payment of any further consideration, are
convertible into or exchangeable for securities of the same issue as, and
equal in amount to, the securities sold short.
4. The Fund will not make investments for the purpose of
exercising control or management of any company.
5. The Fund will limit its purchases of securities of any
issuer (other than the United States or an instrumentality of the United
States) in such a manner that it will satisfy at all times the requirements
of Section 5(b)(1) of the Investment Company Act of 1940 (i.e., that at
least 75% of the value of its total assets is represented by cash and cash
items (including receivables), U.S. Government Securities, securities of
other investment companies, and other securities for the purpose of the
foregoing limited in respect of any one issuer to an amount not greater
than 5% of the value of the total assets of the Fund and to not more than
10% of the outstanding voting securities of such issuer.)
6. Excluding U.S. Government securities (including securities
issued or guaranteed by agencies and instrumentalities thereof), the Fund
will not concentrate 25% or more of the value of its total assets,
determined at the time an investment is made, in securities issued by
companies engaged in the same industry.
7. The Fund will not acquire or retain any security issued by a
company if (a) an officer or director of such company is an officer or
trustee of the Fund or an officer, director or other affiliated person of
its investment advisor; or (b) officers or trustees of the Fund or officers
or directors of its investment adviser owning beneficially more than one-
half of one percent of its securities together own beneficially more than
five percent of its securities.
8. The Fund will not write (sell) or purchase options except
that the Fund may (a) write covered call options or covered put options on
securities that it is eligible to purchase (and on stock indices) and enter
into closing purchase transactions with respect to such options, and (b) in
combination therewith, or separately, purchase put and call options on
securities it is eligible to purchase; provided that the premiums paid by
the Fund on all outstanding options it has purchased do not exceed 5% of
its total assets. The Fund may enter into closing sale transactions with
respect to options it has purchased.
9. The Fund will not act as an underwriter or distributor of
securities other than shares of the Fund.
10. The Fund will not purchase any interest in any oil, gas or
any other mineral exploration or development lease or program.
11. The Fund will not purchase or sell real estate, real estate
mortgage loans or real estate limited partnerships.
12. The Fund will not purchase or sell commodities or
commodities contracts, except that the Fund may purchase and sell financial
futures contracts and related options.
13. The Fund will not make loans, except by purchase of debt
obligations or by entering into repurchase agreements or through the
lending of the Fund's portfolio securities with respect to not more than
25% of its total assets.
Non-Fundamental Investment Restrictions
It is contrary to the Fund's present policy, which may be changed
by the trustees without shareholder approval, to:
1. Purchase securities of other investment companies except (a)
as part of a plan of merger, consolidation or reorganization approved by
the shareholders of the Fund or (b) securities of registered investment
companies where no commission or profit results, other than the usual and
customary broker's commission and where as a result of such purchase the
Fund would hold less than 3% of any class of securities, including voting
securities, of any registered investment company and less than 5% of the
Fund's assets, taken at current value, would be invested in securities of
registered investment companies. All assets of the Fund invested in
securities of registered investment companies will be included in the daily
net assets of the Fund for purposes of calculating the monthly advisory
fees payable to the Advisor. In such event, shareholders of the Fund will
in effect pay two advisory fees on the assets invested in investment
companies.
2. Invest in warrants or rights excluding options (other than
warrants or rights acquired by the Fund as a part of a unit or attached to
securities at the time of purchase) if, as a result, such investments
(valued at the lower of cost or market) would exceed 5% of the value of the
Fund's net assets; provided that not more than 2% of the Fund's net assets
may be invested in warrants not listed on the New York or American Stock
Exchanges.
3. Invest in securities of an issuer, which, together with any
predecessors or controlling persons, has been in operation for less than
three consecutive years and in equity securities for which market
quotations are not readily available (excluding restricted securities) if,
as a result, the aggregate of such investments would exceed 5% of the value
of the Fund's net assets; provided, however, that this restriction shall
not apply to any obligation of the U.S. Government or its instrumentalities
or agencies. (Debt securities having equity features are not considered
"equity securities" for purposes of this restriction.)
4. Invest in (a) securities which at the time of such
investment are not readily marketable, (b) securities the disposition of
which is restricted under federal securities laws, (c) repurchase
agreements maturing in more than seven days, and (d) OTC options, if, as a
result, more than 10% of a Fund's net assets (taken at current value) would
then be invested in securities described in Section 3, 4(a), 4(b), 4(c),
and 4(d) above. For the purpose of this restriction securities subject to
a 7-day put option or convertible into readily saleable securities are not
included with subsections (a) or (b).
All percentage limitations on investments set forth herein and in
the Prospectus will apply at the time of the making of an investment and
shall not be considered violated unless an excess or deficiency occurs or
exists immediately after and as a result of such investment. If violated,
the Fund will immediately liquidate such investment so that no excess or
deficiency remains.
The phrase "shareholder approval," as used herein, means the
affirmative vote of the lesser of (1) more than 50% of the outstanding
shares of the Fund or (2) 67% or more of the shares of the Fund present at
a meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.
INVESTMENT CONSIDERATIONS
DEBT SECURITIES
---------------
As set forth in the Prospectus under the caption "Investment
Objectives and Policies," the Fund may invest in corporate debt securities
of domestic or foreign issuers that are assigned one of the six highest
ratings of either Standard & Poor's Corporation ("Standard & Poor's") or
Moody's Investors Service, Inc. ("Moody's"), or if unrated, are of
comparable quality in the opinion of the Fund's Advisor. A description of
the ratings categories used is set forth in "Description of Securities
Ratings" located in the Fund's Prospectus.
Securities rated Baa and BBB are the lowest which are considered
"investment grade" obligations. Moody's describes securities rated Baa as
"medium-grade" obligations; they are "neither highly protected nor poorly
secured . . . [i]nterest payments and principal security appear adequate
for the present but certain protective elements may be lacking or may be
characteristically unreliable over any general length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well." S&P describes securities rated BBB as "regarded
as having an adequate capacity to pay interest and repay principal . . .
whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity than in higher rated categories."
High yield securities may be more susceptible to real or
perceived adverse economic and competitive industry conditions than
investment grade securities. The prices of high yield securities have been
found to be less sensitive to interest rate changes than higher-rated
investments, but more sensitive to adverse economic downturns or individual
corporate developments. A projection of an economic downturn or of a
period of rising interest rates, for example, could cause a decline in high
yield security prices because the advent of a recession could lessen the
ability of a highly leveraged company to make principal and interest
payments on its debt securities. If an issuer of high yield securities
defaults, in addition to risking payment of all or a portion of interest
and principal, the Fund may incur additional expenses to seek recovery. In
the case of high yield securities structured as zero-coupon or pay-in-kind
securities, their market prices are affected to a greater extent by
interest rate changes, and therefore tend to be more volatile than
securities which pay interest periodically and in cash.
The secondary market on which high yield securities are traded
may be less liquid than the market for higher grade securities. Less
liquidity in the secondary trading market could adversely affect the price
at which the Fund could sell a high yield security, and could adversely
affect the daily net asset value of the shares. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may
decrease the values and liquidity of high yield securities especially in a
thinly-traded market. When secondary markets for high yield securities are
less liquid than the market for higher grade securities, it may be more
difficult to value the securities because such valuation may require more
research, and elements of judgment may play a greater role in the valuation
because there is less reliable, objective data available. The Advisor will
seek to minimize the risks of investing in all debt securities through
diversification, in-depth credit analysis and attention to current
developments in interest rates and market conditions.
Securities are purchased and sold principally in response to
current assessments of future changes in business conditions and the levels
of interest rates on debt securities of varying maturities, the
availability of new investment opportunities at higher relative yields, and
current evaluations of an issuer's continuing ability to meet its
obligations in the future. The average maturity or duration of the fixed-
income securities in the Fund's portfolio may be varied in response to
anticipated changes in interest rates and to other economic factors,
although under normal circumstances the Fund's debt securities will be
primarily those with more than one year remaining to maturity. Securities
may be bought and sold in anticipation of a decline or a rise in market
interest rates. In addition, a security may be sold and another of
comparable quality and maturity (usually, but not always, of a different
issuer) purchased at approximately the same time to take advantage of what
are believed to be short-term differentials in values or yields.
DEPOSITORY RECEIPTS
-------------------
The Fund may invest in foreign securities in the form of American
Depositary Receipts (ADR's) convertible into securities of foreign issuers.
These securities may not necessarily be denominated in the same currency
as the securities into which they may be converted. ADR's are receipts
typically issued by a United States bank or trust company evidencing
ownership of the underlying foreign securities. Generally, ADR's, in
registered form, are designed for use in the United States securities
market.
WARRANTS
--------
The Fund may invest up to 5% of its net assets in warrants or
rights (valued at the lower of cost or market) which entitle the holder to
buy equity securities at a specific price for a specified period of time,
provided that no more than 2% of its net assets are invested in warrants
not listed on the New York or American Stock Exchanges. The Fund may
invest in warrants or rights acquired by the Fund as part of a unit or
attached to securities at the time of purchase without limitation.
PORTFOLIO TURNOVER
------------------
A change in securities held by the Fund is known as "portfolio
turnover" and almost always involves the payment by the Fund of brokerage
commissions or dealer markup and other transaction costs on the sale of
securities as well as on the reinvestment of the proceeds in other
securities. As a result of the investment policies of the Fund, under
certain market conditions its portfolio turnover may be higher than those
of many other investment companies. It is, however, impossible to predict
portfolio turnover in future years. For purposes of reporting portfolio
turnover rates, all securities the maturities of which at the time of
purchase are one year or less are excluded. High portfolio turnover
involves correspondingly greater brokerage commissions and other
transaction costs, which will be borne directly by the Fund.
FORWARD COMMITMENTS
-------------------
The Fund may make contracts to purchase securities for a fixed
price at a future date beyond customary settlement time ("forward
commitments") if the Fund either (i) holds, and maintains until the
settlement date in a segregated account, cash or high grade debt
obligations in an amount sufficient to meet the purchase price or (ii)
enters into an offsetting contract for the forward sale of securities of
equal value that it owns. Forward commitments may be considered securities
in themselves. They involve a risk of loss if the value of the security to
be purchased declines prior to the settlement date, which risk is in
addition to the risk of decline in value of the Fund's other assets. The
Fund may dispose of a commitment prior to settlement and may realize short-
term profits or losses upon such disposition.
REPURCHASE AGREEMENTS
---------------------
The Fund may enter into repurchase agreements with domestic
commercial banks or registered broker/dealers with respect to not more than
25% of its total assets (taken at current value), except that no such limit
applies when the Fund is investing for temporary defensive purposes. A
repurchase agreement is a contract under which the Fund would acquire a
security for a relatively short period (usually not more than one week)
subject to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the Fund's
cost plus interest). The value of the underlying securities (or
collateral) will be at least equal at all times to the total amount of the
repurchase obligation, including the interest factor. The Fund bears a
risk of loss in the event that the other party to a repurchase agreement
defaults on its obligations and the Fund is delayed or prevented from
exercising its rights to dispose of the collateral securities. The
Advisor will monitor the creditworthiness of the counterparties.
SECURITIES LOANS
----------------
The Fund may make secured loans of its portfolio securities
amounting to no more than 25% of its total assets. The risks in lending
portfolio securities, as with other extensions of credit, consist of
possible delay in recovery of the securities or possible loss of rights in
the collateral should the borrower fail financially. However, such loans
will be made only to broker-dealers that are believed by the Advisor to be
of relatively high credit standing. Securities loans are made to broker-
dealers pursuant to agreements requiring that loans be continuously secured
by collateral in cash, U.S. Government securities or other high quality
debt securities at least equal at all times to the market value of the
securities lent. The borrower pays to the lending Fund an amount equal to
any dividends or interest received on the securities lent. The Fund may
invest the cash collateral received in interest-bearing, short-term
securities or receive a fee from the borrower. Although voting rights or
rights to consent with respect to the loaned securities pass to the
borrower, the Fund retains the right to call the loans at any time on
reasonable notice, and it will do so in order that the securities may be
voted by the Fund if the holders of such securities are asked to vote upon
or consent to matters materially affecting the investment. The Fund may
also call such loans in order to sell the securities involved.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
---------------------------------------------
The Fund may enter into agreements with banks or broker-dealers
for the purchase of securities at an agreed-upon price on a specified
future date. Such agreements might be entered into, for example, when the
Fund anticipates a decline in interest rates and is able to obtain a more
advantageous yield by committing currently to purchase securities to be
issued later. When the Fund purchases securities on a when-issued or
delayed delivery basis, it is required either: (i) to create a segregated
account with the Fund's custodian and to maintain in that account cash,
U.S. Government securities or other high grade debt obligations in an
amount equal on a daily basis to the amount of the Fund's when-issued or
delayed delivery commitments; or (ii) to enter into an offsetting forward
sale of securities it owns equal in value to those purchased. The Fund
will only make commitments to purchase securities on a when-issued or
delayed-delivery basis with the intention of actually acquiring the
securities. However, the Fund may sell these securities before the
settlement date if it is deemed advisable as a matter of investment
strategy. When the time comes to pay for when-issued or delayed-delivery
securities, the Fund will meet its obligations from then available cash
flow or the sale of securities, or, although it would not normally expect
to do so, from the sale of the when-issued or delayed-delivery securities
themselves (which may have a value greater or less than the Funds's payment
obligation).
OPTIONS TRANSACTIONS
--------------------
The Fund will not write options that are not "covered." A
written call option is "covered" if the Fund owns the underlying security
subject to the call or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration held in a segregated account by its custodian) upon
conversion or exchange of other securities held in its portfolio. A call
option is also covered if the Fund holds on a share-for-share basis a call
on the same security as the call written where the exercise price of the
call held is equal to or less than the exercise price of the call written
or greater than the exercise price of the call written if the difference is
maintained by the Fund in cash, Treasury bills or other high grade short-
term obligations in a segregated account with its custodian. A written put
option is "covered" if the Fund maintains cash, Treasury bills or other
high grade obligations with a value equal to the exercise price in a
segregated account with its custodian, or holds on a share-for-share basis
a put on the same security as the put written where the exercise price of
the put held is equal to or greater than the exercise price of the put
written. The premium paid by the purchaser of an option will reflect,
among other things, the relationship of the exercise price to the market
price and volatility of the underlying security, the remaining term of the
option, and supply and demand interest rates.
If the writer of an option wishes to terminate his obligations,
he may effect a "closing purchase transaction." This is accomplished by
buying an option of the same series as the option previously written. The
effect of the purchase is that the writer's position will be cancelled by
the clearing corporation. However, a writer may not effect a closing
purchase transaction after he has been notified of the exercise of an
option. Likewise, an investor who is the holder of an option may liquidate
his position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option
previously purchased. There is no guarantee that the Fund will be able to
effect a closing purchase or a closing sale transaction at any particular
time.
Effecting a closing transaction in the case of a written call
option will permit the Fund to write another call option on the underlying
security with either a different exercise price or expiration date or both,
or in the case of a written put option will permit the Fund to write
another put option to the extent that the exercise price thereof is secured
by depositing cash or high grade obligations. Also, effecting a closing
transaction will permit the cash or proceeds from the concurrent sale of
any securities subject to the option to be used for other Fund investments.
If the Fund desires to sell a particular security from its portfolio on
which it has written a call option, it will effect a closing transaction
prior to or concurrent with the sale of the security.
The Fund will realize a profit from a closing transaction if the
price of the transaction is less than the premium received from writing the
option or is more than the premium paid to purchase the option; the Fund
will realize a loss from a closing transaction if the price of the
transaction is more than the premium received from writing the option or is
less than the premium paid to purchase the option. Because increases in
the market price of a call option will generally reflect increases in the
market price of the underlying security, any loss resulting from the
repurchase of a call option is likely to be offset in whole or in part by
appreciation of the underlying security owned by the Fund.
The Fund may write options in connection with buy-and-write
transactions; that is, the Fund will purchase a security and then write a
call option against that security. The exercise price of the call the Fund
determines to write will depend upon the expected price movement of the
underlying security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the-money") or above ("out-of-the-money")
the current value of the underlying security at the time the option is
written. Buy-and-write transactions using in-the-money call options may be
used when it is expected that the price of the underlying security will
remain flat or decline moderately during the option period. Buy-and-write
transactions using at-the-money call options may be used when it is
expected that the price of the underlying security will remain fixed or
advance moderately during the option period. Buy-and-write transactions
using out-of-the-money call options may be used when it is expected that
the premiums received from writing the call option plus the appreciation in
the market price of the underlying security up to the exercise price will
be greater than the appreciation in the price of the underlying security
alone. If the call options are exercised in such transactions, the Fund's
maximum gain will be the premium received by it for writing the option,
adjusted upwards or downwards by the difference between the Fund's purchase
price of the security and the exercise price. If the options are not
exercised and the price of the underlying security declines, the amount of
such decline will be offset in part, or entirely, by the premium received.
The writing of covered put options is similar in terms of
risk/return characteristics to buy-and-write transactions. If the market
price of the underlying security rises or otherwise is above the exercise
price, the put option will expire worthless and the Fund's gain will be
limited to the premium received. If the market price of the underlying
security declines or otherwise is below the exercise price, the Fund may
elect to close the position or take delivery of the security at the
exercise price. In that event, the Fund's return will be the premium
received from the put option minus the cost of closing the position or, if
it chooses to take delivery of the security, the premium received from the
put option minus the amount by which the market price of the security is
below the exercise price. Out-of-the-money, at-the-money and in-the-money
put options may be used by the Fund in the same market environments that
call options are used in equivalent buy-and-write transactions.
The extent to which the Fund will be able to write and purchase
call and put options will also be restricted by the Fund's intention to
qualify the Fund as a regulated investment company under the federal income
tax law. See "Taxes."
OTC Options. The Fund will enter into over-the-counter ("OTC")
options transactions only with primary dealers in U.S. Government
securities and only pursuant to agreements that will assure that the Fund
will at all times have the right to repurchase the option written by it
from the dealer at a specified formula price. The Fund will treat the
amount by which such formula price exceeds the intrinsic value of the
option (i.e., the amount, if any, by which the market price of the
underlying security exceeds the exercise price of the option) as an
illiquid investment.
It is the present policy of the Fund not to enter into any OTC
option transaction if, as a result, more than 15% of the Fund's net assets
would be invested in (i) OTC options purchased by the Fund and other
illiquid investments.
LIMITATIONS ON THE USE OF OPTIONS STRATEGIES
--------------------------------------------
The Fund's ability to engage in the options strategies described
above will depend on the availability of liquid markets in such
instruments. Markets in certain options are relatively new and still
developing. It is impossible to predict the amount of trading interest
that may exist in various types of options. Therefore no assurance can be
given that the Fund will be able to utilize these instruments effectively
for the purposes set forth above. Furthermore, the Fund's ability to
engage in options transactions may be limited by tax considerations.
RISK FACTORS IN OPTIONS TRANSACTIONS
------------------------------------
The option writer has no control over when the underlying
securities must be sold, in the case of a call option, or purchased, in the
case of a put option, since the writer may be assigned an exercise notice
at any time prior to the termination of the obligation. If an option
expires unexercised, the writer realizes a gain in the amount of the
premium. Such a gain, of course, may, in the case of a covered call
option, be offset by a decline in the market value of the underlying
security during the option period. If a call option is exercised, the
writer realizes a gain or loss from the sale of the underlying security.
If a put option is exercised, the writer must fulfill the obligation to
purchase the underlying security at the exercise price, which will usually
exceed the then market value of the security.
An exchange-traded option may be closed out only on a national
securities exchange (an "Exchange") which generally provides a liquid
secondary market for an option of the same series. An over-the-counter
option may be closed out only with the other party to the option
transaction. If a liquid secondary market for an exchange-traded option
does not exist, it might not be possible to effect a closing transaction
with respect to a particular option with the result that the Fund would
have to exercise the option in order to realize any profit. If the Fund is
unable to effect a closing purchase transaction in a secondary market, it
will not be able to sell the underlying security until the option expires
or it delivers the underlying security upon exercise. Reasons for the
absence of a liquid secondary market on an Exchange include the following:
(i) there may be insufficient trading interest in certain options; (ii)
restrictions may be imposed by an Exchange on opening transactions or
closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforseen circumstances
may interrupt normal operations on an Exchange; (v) the facilities of an
Exchange or the Options Clearing Corporation may not at all times be
adequate to handle current trading volume; or (vi) one or more Exchanges
could, for economic or other reasons, decide or be compelled at some future
date to discontinue the trading of options (or a particular class or series
of options), in which event the secondary market on the Exchange (or in
that class or series of options) would cease to exist, although outstanding
options on the Exchange that had been issued by the Options Clearing
Corporation as a result of trades on that Exchange would continue to be
exercisable in accordance with their terms.
The Exchanges have established limitations governing the maximum
number of options which may be written by an investor or group of investors
acting in concert. It is possible that the Fund and other clients of the
Advisor may be considered to be such a group. These position limits may
restrict the Funds' ability to purchase or sell options on a particular
security.
FUTURES TRANSACTIONS
--------------------
The Fund may sell futures contracts, purchase put options on
futures contracts and write call options on futures contracts for the
purpose of hedging its portfolio. Information concerning futures contracts
and options on futures contracts is set forth below.
FUTURES CONTRACTS. A futures contract sale creates an obligation
by the seller to deliver the type of commodity or financial instrument
called for in the contract in a specified delivery month for a stated
price. A futures contract purchase creates an obligation by the purchaser
to take delivery of the underlying commodity or financial instrument in a
specified delivery month at a stated price. The specific instruments
delivered or taken, respectively, at settlement date are not determined
until at or near that date. The determination is made in accordance with
the rules of the exchange on which the futures contract sale or purchase
was made. An index futures contract is similar except that the parties
agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the securities index value at
the close of the last trading day of the contract and the price at which
the futures contract is originally struck. Futures contracts are traded
only on commodity exchanges -- known as "contract markets" -- approved for
such trading by the Commodity Futures Trading Commission ("CFTC"), and must
be executed through a futures commission merchant or brokerage firm which
is a member of a contract market.
Although futures contracts by their terms call for actual
delivery or acceptance of commodities or securities, in most cases the
contracts are closed out before the settlement date without the making or
taking of delivery. Closing out of a futures contract sale is effected by
purchasing a futures contract for the same aggregate amount of the specific
type of financial instrument or commodity and the same delivery date. If
the price of the initial sale of the futures contract exceeds the price of
the offsetting purchase, the seller is paid the difference and realizes a
gain. Conversely, if the price of the offsetting purchase exceeds the
price of the offsetting purchase, the seller is paid the difference and
realizes a gain. Conversely, if the price of the offsetting purchase
exceeds the price of the initial sale, the seller realizes a loss.
Similarly, the closing out of a futures contract purchase is effected by
the purchaser entering into a futures contract sale. If the offsetting
sale price exceeds the purchase price, the purchaser realizes a gain, and
if the purchase price exceeds the offsetting sale price, he realizes a
loss.
The purchase (that is, assuming a long position in) or sale (that
is, assuming a short position in) of a futures contract differs from the
purchase or sale of a security, in that no price or premium is paid or
received. Instead, an amount of cash or U.S. Treasury bills generally not
exceeding 5% of the contract amount must be deposited with the broker.
This amount is known as initial margin. Subsequent payments to and from
the broker, known as variation margin, are made on a daily basis as the
price of the underlying futures contract fluctuates making the long and
short positions in the futures contract more or less valuable, a process
known as "marking to market." At any time prior to the settlement date of
the futures contract, the position may be closed out by taking an opposite
position which will operate to terminate the position in the futures
contract. A final determination of variation margin is then made,
additional cash is required to be paid to or released by the broker, and
the purchaser realizes a loss or gain. In addition, a commission is paid
on each completed purchase and sale transaction.
The Fund may engage in transactions in futures contracts for the
purpose of hedging against changes in the values of securities it owns or
intends to acquire. The Fund may sell such futures contracts in
anticipation of a decline in the value of its investments. The risk of
such a decline can be reduced without employing futures as a hedge by
selling long-term securities and either reinvesting the proceeds in
securities with shorter maturities or by holding assets in cash. This
strategy, however, entails increased transaction costs in the form of
brokerage commissions and dealer spreads. The sale of futures contracts
provides an alternative means of hedging the Fund against a decline in the
value of its investments in fixed-income securities. As such values
decline, the value of the Fund's position in the futures contracts will
tend to increase, thus offsetting all or a portion of the depreciation in
the market value of the Fund's fixed-income securities which are being
hedged. While the Fund will incur commission expenses in establishing and
closing out futures positions, commissions on futures transactions may be
significantly lower than transaction costs incurred in the purchase and
sale of fixed-income securities. Employing futures as a hedge may also
permit the Fund to assume a defensive posture without reducing its yield on
its investments.
CALL OPTIONS ON FUTURES CONTRACTS. The purchase of a call option
on a futures contract is similar in some respects to the purchase of a call
option on an individual security. Depending on the pricing of the option
compared to either the futures contract upon which it is based, or upon the
price of the underlying debt securities, it may or may not be less risky
than ownership of the futures contract or underlying debt securities. As
with the purchase of a futures contract, the Fund may purchase a call
option on a futures contract to hedge against a market advance when the
Fund is not fully invested.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the securities or commodities
which are deliverable upon exercise of the futures contract. If the
futures price at expiration of the option is below the exercise price, the
Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's
portfolio holdings.
PUT OPTIONS ON FUTURES CONTRACTS. The purchase of put options on
a futures contract is similar in some respects to the purchase of
protective put options on portfolio securities. The Fund may purchase put
options on futures contracts to hedge the Fund's portfolio against the risk
of rising interest rates or declines in stock market prices. The Fund may
purchase put options on futures contracts in circumstances where it would
sell futures contracts.
The Fund may write a put option on a futures contract as a
partial hedge against increasing prices of the assets which are deliverable
upon exercise of the futures contract. If the futures price at expiration
of the option is higher than the exercise price, the Fund will retain the
full amount of the option premium which provides a partial hedge against
any increase in the price of assets that the Fund intends to purchase.
INDEX FUTURES. A securities index assigns relative values to the
securities comprising the index. An index futures contract is a bilateral
agreement pursuant to which two parties agree to take or make delivery of
an amount of cash equal to a specified dollar amount times the difference
between the index value at the close of the last trading day of the
contract and the price at which the futures contract is originally struck.
No physical delivery of the underlying securities in the index is made.
The Fund will engage in transactions in index futures contracts
only as a hedge against changes resulting from market conditions in the
values of securities held in the Fund's portfolio or which the Fund intends
to purchase. In connection with its purchase of index futures contracts,
the Fund will deposit an amount of cash and cash equivalents, equal to the
market value of the futures contracts, in a segregated account with its
Custodian and/or in the margin account with a broker.
LIMITATIONS ON THE USE OF OPTIONS AND FUTURES PORTFOLIO STRATEGIES
------------------------------------------------------------------
The Fund will not "over-hedge," that is the Fund will not make
open short positions in futures contracts if, in the aggregate, the value
of its open positions (marked to market) exceeds the current market value
of its securities portfolio plus or minus the unrealized gain or loss on
such open positions, adjusted for the historical volatility relationship
between the portfolio and futures contracts.
The Fund's ability to engage in the options and futures
strategies described above will depend on the availability of liquid
markets in such instruments. Markets in certain options and futures are
relatively new and still developing. It is impossible to predict the
amount of trading interest that may exist in various types of options or
futures. Therefore no assurance can be given that the Fund will be able to
utilize these instruments effectively for the purposes set forth above.
Furthermore, the Fund's ability to engage in options and futures
transactions may be limited by tax considerations and CFTC rules.
RISK FACTORS IN FUTURES TRANSACTIONS
------------------------------------
Investment by the Fund in futures contracts involves risk. Some
of that risk may be caused by an imperfect correlation between movements in
the price of the futures contract and the price of the security or other
investment being hedged. The hedge will not be fully effective where there
is such imperfect correlation. For example, if the price of the futures
contract moves more than the price of the hedged security, the Fund would
experience either a loss or gain on the future which is not completely
offset by movements in the price of the hedged securities. To compensate
for imperfect correlations, the Fund may purchase or sell futures contracts
in a greater dollar amount than the hedged securities if the volatility of
the hedged securities is historically greater than the volatility of the
futures contracts. Conversely, the Fund may purchase or sell fewer
contracts if the volatility of the price of the hedged securities is
historically less than that of the futures contracts. The risk of
imperfect correlation generally tends to diminish as the maturity date of
the futures contract approaches.
Futures contracts on U.S. Government securities historically have
reacted to an increase or decrease in interest rates in a manner similar to
that in which the underlying U.S. Government securities reacted.
Futures contracts may be used to hedge against a possible
increase in the price of securities which the Fund anticipates purchasing,
or options thereon. In such instances, it is possible that the market may
instead decline. If the Fund does not then invest in such securities
because of concern as to possible further market decline or for other
reasons, the Fund may realize a loss on the futures contract that is not
offset by a reduction in the price of the securities purchased.
The amount of risk the Fund assumes when it purchases an option
on a futures contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed above,
the purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the value
of the option purchased.
The liquidity of a secondary market in a futures contract may be
adversely affected by "daily price fluctuation limits" established by
commodity exchanges which limit the amount of fluctuation in a futures
contract price during a single trading day. Once the daily limit has been
reached in the contract, no trades may be entered into at a price beyond
the limit, thus preventing the liquidation of open futures positions.
Prices have in the past exceeded the daily limit on a number of consecutive
trading days.
The successful use of transactions in futures and related options
also depends on the ability of the Adviser to forecast correctly the
direction and extent of interest rate movements within a given time frame.
To the extent interest rates remain stable during the period in which a
futures contract or related option is held by the Fund or such rates move
in a direction opposite to that anticipated, the Fund may realize a loss on
the hedging transaction which is not fully or partially offset by an
increase in the value of portfolio securities. As a result, the Fund's
total return for such period may be less than if it had not engaged in the
hedging transaction.
CONTINGENT DEFERRED SALES CHARGE (CLASS B SHARES)
AND INITIAL SALES CHARGE (CLASS A SHARES)
As described in the Prospectus under the caption "How to Redeem,"
the contingent deferred sales shares is waived on redemptions of Class B
shares for certain classes of individuals or entities on account of:
(i) the fact that the Fund's sales-related expenses are lower for certain
of such classes than for classes for which the contingent deferred sales
load is not waived; (ii) waiver of the contingent deferred sales load with
respect to certain of such classes is consistent with certain Internal
Revenue Code policies concerning the favored tax treatment of
accumulations; and (iii) with respect to certain of such classes,
considerations of fairness, and competitive and administrative factors.
As described in the Prospectus under the caption "Alternative
Purchase Arrangements--Initial Sales Charge Alternative - Class A Shares,"
Class A shares of the Fund are sold pursuant to an initial sales charge,
which declines as the amount of purchase reaches certain defined levels.
EXCHANGE PRIVILEGE
As described in the Prospectus under the caption "Exchange
Privilege," a shareholder may exchange shares of the Fund for shares of any
other Jefferson fund within the same class on the basis of their respective
net asset values. With respect to Class B shares, the original purchase
date(s) of shares exchanged will carry over to the investment in the new
fund for purposes of calculating any contingent deferred sales charge. For
example, if a shareholder invests in the Class B shares of the Fund and 6
months later exchanges those shares for shares of another fund, no sales
charge would be imposed upon the exchange but the investment in the other
fund would be subject to the 5% contingent deferred sales charge until one
year after the date of the shareholder's investment in the first Fund, as
described in the Prospectus under "Alternative Purchase Arrangements."
With respect to Class B shares subject to a contingent deferred sales
charge, if less than all of an investment is exchanged out of the Fund, any
portion of the investment attributable to capital appreciation and/or
reinvested dividends or capital gains distributions will be exchanged
first, and thereafter any portions exchanged will be from the earliest
investment made in the Fund from which the exchange was made. The Fund
reserves the right to modify or discontinue the exchange privilege at any
time. Orders for exchanges received after the close of regular trading on
the Exchange on any business day will be executed at the respective net
asset values determined at the close of the next business day.
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS
As stated in the text of the Prospectus under the caption
"Distributor and Distribution and Servicing Plans," shares of the Fund are
continuously offered through firms ("participating brokers") which are
members of the National Association of Securities Dealers, Inc. and which
have dealer agreements with the Distributor, or which have agreed to act as
introducing brokers for the Distributor ("introducing brokers"). Under the
Distribution Agreement between the Fund and the Distributor (the
"Distribution Agreement"), the Distributor is not obligated to sell any
specific amount of shares of the Fund and will purchase shares for resale
only against orders for shares.
Pursuant to the Distribution and Servicing Plans described in the
Prospectus, in connection with the distribution of Class B shares of the
Fund, the Distributor receives certain distribution fees from the Fund, and
in connection with personal services rendered to Class A and Class B
shareholders of the Fund and the maintenance of shareholder accounts, the
Distributor receives certain servicing fees from the Fund. Subject to the
percentage limitations on these distribution and servicing fees set forth
in the Prospectus, the distribution and servicing fees may be paid in
respect of services rendered and expenses borne in the past with respect to
each such class as to which no distribution and servicing fees were paid on
account of such limitations. As described in the Prospectus, the
Distributor pays all or a portion of the distribution and servicing fees it
receives from the Fund to participating and introducing brokers.
Each Distribution and Servicing Plan may be terminated with
respect to the class of shares of the Fund by vote of a majority of the
trustees who are not interested persons of the Fund (as defined in the 1940
Act) and who have no direct or indirect financial interest in the operation
of the Plan or the Distribution Agreement (the "Independent Trustees"), or
by vote of a majority of the outstanding voting securities of that class.
Any change in either Plan that would materially increase the cost to the
class of shares of the Fund requires approval by the affected class of
shareholders of the Fund. The trustees review quarterly a written report
of such costs and the purposes for which such costs have been incurred.
The Plan may be amended by vote of the trustees, including a majority of
the Independent trustees, cast in person at a meeting called for the
purpose. For so long as the Plan is in effect, selection and nomination of
those Trustees who are not interested persons of the Fund shall be
committed to the discretion of such disinterested persons.
The Distribution Agreement may be terminated with respect to the
Fund or class of shares thereof at any time on 60 days' written notice
without payment of any penalty either by the Distributor or by the Fund by
vote of a majority of the outstanding voting securities of the Fund or that
class, as the case may be, or by vote of a majority of the Independent
Trustees.
The Distribution Agreement and the Distribution and Servicing
Plans will continue in effect with respect to the Fund and each class of
shares thereof for successive one-year periods, provided that each such
continuance is specifically approved: (i) by the vote of a majority of the
Independent Trustees; and (ii) by the vote of a majority of the entire
Board of Trustees cast in person at a meeting called for that purpose.
If the Distribution Agreement or the Distribution and Servicing
Plans are terminated (or not renewed) with respect to the Fund, they may
continue in effect with respect to any class of the Fund as to which they
have not been terminated (or have been renewed).
The trustees believe that the Distribution Plans provide benefits
to the Fund. The trustees believe that the Plans result in greater sales
and/or fewer redemptions of Fund shares, although it is impossible to know
for certain the level of shares and redemptions of Fund shares in the
absence of the Plan or under an alternative distribution scheme. The
effect on sales and/or redemptions is believed to benefit the Fund by
reducing Fund expense ratios and/or by affording greater flexibility to
Fund managers.
The Distributor has undertaken to reimburse the Fund to the
extent that the aggregate annual operating expenses, including the
investment advisory fee but excluding interest, taxes, brokerage
commissions and extraordinary items, exceed that percentage of the average
net assets of the Fund for such year, as determined by valuations made as
of the close of each business day of the year, which is the most
restrictive percentage provided by the state laws of the various states in
which the Common Stock is qualified for sale. As of the date of this
Statement of Additional Information the percentage applicable to the Fund
is 21/2% on the first $30,000,000 of its average daily net assets, 2% on
the next $70,000,000 of its average daily net assets and 11/2% of its
average daily net assets in excess of $100,000,000. The Fund monitors its
expense ratio at least on a monthly basis. If the accrued amount of the
expenses of the Fund exceeds the expense limitation, the Fund creates an
account receivable from the Distributor for the amount of such excess.
In addition to any reimbursement requirement required under the
most restrictive applicable expense limitation of state securities
commissions described above, the Distributor has undertaken to reimburse
the Fund for expenses in excess of 1.15% and 1.90% of average net assets of
Class A Shares and Class B Shares, respectively. Such reimbursements to
the Fund may only be modified or discontinued by the Distributor by
amending the Distribution Agreement. From September 1, 1995 (commencement
of operations) to October 31, 1995, total expenses of the Fund would have
exceeded 1.15% and 1.90% of the average net assets of Class A Shares and
Class B Shares, respectively. As a result, for the period September 1,
1995 through October 31, 1995, the Distributor reimbursed the Fund $27,342.
TRUSTEES AND OFFICERS OF THE FUND
The name, address, principal occupations during the past five
years and other information with respect to each of the trustees and
officers of the Fund are as follows:
KEITH PINSONEAULT*<F16>
-----------------
233 S. Wacker Drive
Suite 4500
Chicago, Illinois 60603
(PRESIDENT, TREASURER
AND A TRUSTEE OF THE FUND)
Mr. Pinsoneault is an executive vice president and director of
capital markets of Rodman & Renshaw Capital Group, Inc., the parent company
of the Fund's Distributor. Mr. Pinsoneault is also the Chief Operating
Officer of Rodman & Renshaw, Inc., the Fund's Distributor. He has held
these positions since July 20, 1994. From 1991 until 1994, Mr. Pinsoneault
was the senior portfolio manager for Harris, Bretall, Sullivan & Smith,
Inc., an investment manager. From 1990 until 1991, he was a portfolio
manager and director of research at McCullough, Andrews & Cappiello, Inc.,
an investment manager.
RICHARD IMPERIALE*<F16>
-----------------
839 N. Jefferson Street
Milwaukee, Wisconsin 53202
(CHAIRMAN, SECRETARY AND
A TRUSTEE OF THE FUND)
Mr. Imperiale has been the President of Uniplan, Inc., the Fund's
investment advisor, since he founded Uniplan, Inc. in 1985.
LAWRENCE KUJAWSKI*<F16>
-----------------
13255 West Bluemound Road
Brookfield, Wisconsin 53005
(TRUSTEE)
Mr. Kujawski has been the President of Matrix Venture Funds,
Inc., a firm specializing in the valuation of closely held securities,
acquisitions, venture capital financing and consulting, since he founded
Matrix Venture Funds, Inc. in 1982.
JOHN L. KOMIVES
---------------
101 S. Second Street
Milwaukee, Wisconsin 53204
(TRUSTEE)
Dr. Komives is the President of Lakeshore Group Ltd., a position
he has held since he founded the firm in 1975. Dr. Komives is a member of
the board of directors of the following firms: F.W. Boelter Cos., Inc.,
Milwaukee, Wisconsin; Eagle Technology, Inc., Mequon, Wisconsin; Ebert and
Associates, Inc., Milwaukee, Wisconsin; Ft. Kincaid Industries, Inc.,
Milwaukee, Wisconsin; Metrix Customer Support Systems (MCSS), Waukesha,
Wisconsin; Metal Processing Co., Milwaukee, Wisconsin; Orthokinetics, Inc.,
Pewaukee, Wisconsin; Premier Plastics, Inc., Waukesha, Wisconsin; Renquist
Associates, Inc., Racine, Wisconsin; World Venture Management, Inc.,
Milwaukee, Wisconsin; Zigman, Joseph & Stephenson, Inc., Milwaukee,
Wisconsin. He also serves as a member of the following boards: Acme
Institute of Technology, West Allis, Wisconsin; Board of Governors, Mount
Mary College, Wauwatosa, Wisconsin; and Board of Governors of the Center
for Entrepreneurial Studies, Marquette University, Milwaukee, Wisconsin.
J. MICHAEL BORDEN
-----------------
2938 North Shore Drive
Delavan, Wisconsin 53115
(TRUSTEE)
Since 1988, Mr. Borden has been the president of Total Quality
Plastics, Inc., a manufacturer of injection molding, the president of Rock
Valley Trucking, and the president of Freedom Plastics, Inc. Mr. Borden
has been the president and chief executive officer of Hufcor, Inc., a
manufacturer of movable walls and accordion partitions, since 1978. From
1980 through 1994, he was also a member of the board of directors, a member
of the executive committee, the chairman of the finance and executive
committees and a vice president of Catholic Knights Insurance Society.
DENNIS J. LASSER
----------------
Binghampton, New York
(TRUSTEE)
Mr. Lasser is an Associate Professor of Finance, School of
Management, SUNY-Binghamton, New York, a position he has held since 1988.
JAMES L. STANKO
---------------
Rancho Santa Fe, California
(TRUSTEE)
Mr. Stanko has been Chairman of Winstar Associates, a company he
founded in 1992. From 1982 until 1992 he was a Managing Director of
Oppenheimer & Co. From 1976 until 1982, Mr. Stanko was Chairman of Carroll
McEntee and McGinley Money Markets, Inc.
*<F16>Messrs. Pinsoneault, Imperiale and Kujawski are trustees who
are "interested persons" of the Fund as that term is defined in
the Investment Company Act of 1940.
The Fund's standard method of compensating trustees is to pay
each trustee who is not an officer of the Fund a fee of $250 for each
meeting of the trustees attended. The Fund also may reimburse its trustees
for travel expenses incurred in order to attend meetings of the trustees.
For the period from September 1, 1995 (commencement of operations) through
October 31, 1995, officers and trustees received $656 in the aggregate
remuneration from the Fund and received $1,250 as reimbursements for travel
expenses.
As of January 31, 1996, the officers and trustees of the Fund as
a group owned 8.7% of the outstanding securities of the Fund. As of January
31, 1996, Marshall & Ilsley Trust Company Trustee FBO Hough MFG Corp.
Retirement Trust, 1000 North Water Street, Milwaukee, Wisconsin 53202,
owned 26.2% of the outstanding securities of the Fund. As of January 31,
1996, Clarke & Co., 235 West Schrock Road, Westerville, Ohio 43081 owned
20.4% of the outstanding securities of the Fund. As of January 31, 1996,
Richard Imperiale, 839 North Jefferson Street, Milwaukee, Wisconsin 53202,
owned 6.3% of the outstanding securities of the Fund.1<F17> By virtue of
its stock ownership, Marshall & Ilsley Trust Company Trustee FBO Hough MFG
Corp. Retirement Trust (the "Retirement Trust") is deemed to "control," as
that term is defined in the Investment Company Act of 1940, the Fund.
Although, the Retirement Trust controls the Fund, it does not control the
Jefferson Fund Group Trust. No other person
owns of record or beneficially 5% or more of the outstanding securities of
any class of the Fund.
INVESTMENT ADVISOR, ADMINISTRATOR, CUSTODIAN, TRANSFER AGENT
AND ACCOUNTING SERVICES AGENT
As set forth in the Prospectus under the caption "MANAGEMENT OF
THE FUND" the investment adviser to the Fund is Uniplan, Inc. (the
"Advisor"). Pursuant to an investment advisory agreement between the Fund
and the Advisor (the "Advisory Agreement") the Advisor furnishes continuous
investment advisory services and management to the Fund. The Advisor is
controlled by Richard P. Imperiale, who owns 90% of its outstanding capital
stock. Mr. Imperiale is also a trustee of the Fund.
The Advisory Agreement will remain in effect for two years until
August 4, 1997 and thereafter as long as its continuance is specifically
approved at least annually, by (i) the trustees of the Fund, or by the vote
of a majority (as defined in the Investment Company Act of 1940) of the
outstanding shares of the Fund, and (ii) by the vote of a majority of the
trustees of the Fund who are not parties to the Advisory Agreement or
interested persons of the Advisor, cast in person at a meeting called for
the purpose of voting on such approval. The Advisory Agreement provides
that it may be terminated at any time without the payment of any penalty,
by the trustees of the Fund or by vote of a majority of the Fund's
shareholders, on sixty days written notice to the Advisor, and by the
Advisor on the same notice to the Fund and that it shall be automatically
terminated if it is assigned.
The Advisory Agreement provides that the Advisor shall not be
liable to the Fund or its shareholders for anything other than willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties. The Advisory Agreement also provides that the
Advisor and its officers, directors and employees may engage in other
businesses, devote time and attention to any other business whether of a
similar or dissimilar nature, and render investment advisory services to
others. For the period from September 1, 1995 (commencement of operations)
through October 31, 1995, the fees paid under the Advisory Agreement were
$1000.
As set forth in the Prospectus under the caption "MANAGEMENT OF
THE FUND," the administrator to the Fund is Firstar Trust Company (the
"Administrator"), 615 East Michigan Street, Milwaukee, Wisconsin 53202.
The administration agreement entered into between the Fund and the
Administrator (the "Administration Agreement") will remain in effect until
terminated by either party. The Administration Agreement may be terminated
at any time, without the payment of any penalty, by the trustees of the
Fund upon the giving of ninety (90) days' written notice to the
Administrator, or by the Administrator upon the giving of ninety (90) days'
written notice to the Fund.
1<F17>Mr. Imperiale's holdings include shares held by Uniplan Inc., as well
as held by Mr. Imperiale in his capacity as trustee of the Uniplan Inc.
Profit Sharing Plan and by Mr. Imperiale in his capacity as custodian for
Emily Imperiale under the Uniform Transfer to Minors Act.
Under the Administration Agreement, the Admi nistrator is not
liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the performance of the Administration
Agreement, except a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of the Administrator in the performance of its
duties or from its reckless disregard of its duties and obligations under
the Administration Agreement. For the period from September 1, 1995
(commencement of operations) though October 31, 1995, the fees earned by
the Administrator were $5620.
Firstar Trust Company also serves as custodian of the Fund's
assets pursuant to a Custody Agreement. Under the Custody Agreement,
Firstar Trust Company has agreed to (i) maintain a separate account in the
name of the Fund, (ii) make receipts and disbursements of money on behalf
of the Fund, (iii) collect and receive all income and other payments and
distributions on account of the Fund's portfolio investments, (iv) respond
to correspondence from shareholders, security brokers and others relating
to its duties and (v) make periodic reports to the Fund concerning the
Fund's operations. Firstar Trust Company does not exercise any supervisory
function over the purchase and sale of securities. For its services as
custodian, Firstar Trust company is entitled to receive a fee, payable
quarterly, based on the annual rate of .02% of the net assets of the Fund
(subject to a minimum annual $3000 fee). In addition, Firstar Trust
Company, as custodian, is entitled to certain charges for securities
transactions and reimbursement for expenses. For the period from September
1, 1995 (commencement of operations) through October 31, 1995, the fees
earned by the custodian were $533.
Firstar Trust Company also serves as transfer agent and dividend
disbursing agent for the Fund under a Shareholder Servicing Agent
Agreement. As transfer and dividend disbursing agent, Firstar Trust
Company has agreed to (i) issue and redeem shares of the Fund, (ii) make
dividend and other distributions to shareholders of the Fund, (iii) respond
to correspondence by Fund shareholders and others relating to its duties,
(iv) maintain shareholder accounts, and (v) make periodic reports to the
Fund. For its transfer agency and dividend disbursing services, Firstar
Trust company is entitled to receive fees at the rate of $13.50 per
shareholder account (subject to a minimum annual fee of $30,000). Also,
Firstar Trust Company is entitled to certain other transaction charges and
reimbursement for expenses. For the period September 1, 1995 (commencement
of operations) through October 31, 1995, the fees earned under the
Shareholder Servicing Agreement were $4,218.
In addition the Fund has entered into a Fund Accounting Servicing
Agreement with Firstar Trust company pursuant to which Firstar Trust
Company has agreed to maintain the financial accounts and records of the
Fund and provide other accounting services to the Fund. For it accounting
services, Firstar Trust Company is entitled to receive fees, payable
monthly, based on the total annual rate of $22,000 for the first
$40,000,000 in average net assets of the Fund, .01% on the next
$200,000,000 of average net assets of the Fund and .005% on all net assets
exceeding $240,000,000 (subject to a minimum annual fee of $27,000).
Firstar Trust Company is also entitled to certain out of pocket expenses,
including pricing expenses. For the period September 1, 1995 (commencement
of operations) through October 31, 1995, the fees earned under the Fund
Accounting Servicing Agreement were $3738.
DETERMINATION OF NET ASSET VALUE
As set forth in the Prospectus under the caption "DETERMINATION
OF NET ASSET VALUE," the net asset value of the Fund will be determined as
of the close of regular trading (currently 4:00 p.m. Eastern time) on each
day the New York Stock Exchange is open for trading. The Trust expects the
New York Stock Exchange to be open for trading Monday through Friday except
New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Additionally, if any of the aforementioned holidays falls on a Saturday,
the Fund expects that the New York Stock Exchange will not be open for
trading on the preceding Friday and when any such holiday falls on a
Sunday, the Trust expects that the New York Stock Exchange will not be open
for trading on the succeeding Monday, unless unusual business conditions
exist, such as the ending of a monthly or the yearly accounting period.
The Fund's portfolio securities for which market quotations are readily
available are valued at the most recent bid price. Notwithstanding the
above sentence, certain of the Fund's holdings of debt securities are
valued by a pricing service. The pricing service relies on one or more of
the following factors: valuations obtained from recognized dealers,
information on transactions for similar securities, general market
information, and matrix comparisons of various characteristics of debt
securities, such as quality, yield maturity.
CALCULATION OF TOTAL RETURN
Total Return with respect to the Fund's Class A and Class B
shares is a measure of the change in value of an investment in a class of
shares of the Fund over the period covered (in the case of Class A shares,
giving effect to the maximum initial sales charge), which assumes any
dividends or capital gains distributions are reinvested in that class of
the Fund's shares immediately rather than paid to the investor in cash.
The formula for Total Return used herein includes four steps: (1) adding
to the total number of shares purchased by a hypothetical $1,000 investment
in the class (deducting in the case of Class A shares of the maximum
applicable initial sales charge) all additional shares which would have
been purchased if all dividends and distributions paid or distributed
during the period had been immediately reinvested; (2) calculating the
value of the hypothetical initial investment of $1,000 as of the end of the
period by multiplying the total number of shares in the class owned at the
end of the period by the net asset value per share of the class on the last
trading day of the period; (3) assuming redemption at the end of the period
(deducting any applicable contingent deferred sales charge); and
(4) dividing this account value for the hypothetical investor by the
initial $1,000 investment and annualizing the result for the periods of
less than one year. Specifically, the Total Return formula is as follows:
n
P (1 + T) = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the one, five, or ten-year period at the
end of the one, five, or ten-year period (or fractional
portion thereof).
The manner in which Total Return of the Class A and Class B
shares will be calculated for public use is described above.
The total return for the period from September 1, 1995
(commencement of operations) through October 31, 1995 was 0.40% for the
Class A Shares and 0.30% for Class B Shares. On an annualized basis,
returns would be 2.40% and 1.80%, respectively.
Performance information is computed separately for the Fund's
Class A and Class B shares. The Fund may from time to time include the
total Return of its Class A and Class B shares in advertisements or in
information furnished to represent or prospective shareholders. The Fund
may from time to time include in advertisements the total return of each
class and the ranking of those performance figures relative to such figures
for groups of mutual funds categorized by Lipper Analytical Services as
having the same investment objectives.
Information provided to any newspaper or similar listing of the
Fund's net asset values and public offering prices will separately present
the Class A and Class B shares.
The Total Return of each class may also be used to compare the
performance of the Funds' Class A and Class B shares against certain widely
acknowledged standards or indices for stock and bond market performance
against the cost of living (inflation) index, and against hypothetical
results based on a fixed rate of return.
The Standard & Poor's composite Index of 500 stocks (the
"S&P 500") is a market value-weighted and unmanaged index showing the
changes in the aggregate market value of 500 stocks relative to the base
period 1941-43. The S&P 500 is composed almost entirely of common stocks
of companies listed on the New York Stock Exchange, although the common
stocks of a few companies listed on the American Stock Exchange or traded
over-the-counter are included. The 500 companies represented include 385
industrial, 15 transportation, 45 utilities and 55 financial services
concerns. The S&P 500 represents about 77% of the market value of all
issues traded on the New York Stock Exchange.
The NASDAQ-OTC Price Index (the "NASDAQ Index") is a market
value-weighted and unmanaged index showing the changes in the aggregate
market value of approximately 3,500 stocks relative to the base measure of
100.00 on February 5, 1971. The NASDAQ Index is composed entirely of
common stocks of companies traded over-the-counter and often through the
National Association of Securities Dealers Automated Quotations ("NASDAQ")
system. Only those over-the-counter stocks have only one market maker or
traded on exchanges are excluded.
The Russell 2000 Small Stock Index is an unmanaged index of the
2000 smallest securities in the Russell 3000 Index, representing
approximately 7% of the Russell 3000 Index. The Russell 3000 Index
represents approximately 98% of the U.S. equity market by capitalization.
From time to time, articles or reports about the Fund concerning
performance, rankings and other characteristics of the Fund may appear in
national publications and services including, but not limited to, the Wall
Street Journal, Forbes, Fortune, Money Magazine, Morningstar's Mutual Fund
Values, CDA Investment Technologies and The Donoghue Organization. In
particular, some or all of these publications may publish their own
rankings or performance reviews of mutual funds, including the Fund.
References to or reprints of such articles may be used in the Fund's
promotional literature. References to articles regarding personnel of the
Advisor who has portfolio management responsibility may also be used in the
Fund's promotional literature.
From time to time, the Fund may us e, in its advertisements or
information furnished to present or prospective shareholders, data
concerning the performance and ranking of certain countries' stock markets,
including performance and ranking data based on annualized returns over
one, three, five and ten-year periods.
From time to time, the Fund may set forth in its advertisements
and other materials information about the growth of a certain dollar
amount invested in the Fund over a specified period of time and may use
charts and graphs to display that growth.
ALLOCATION OF PORTFOLIO BROKERAGE
Decisions to buy and sell securities for the Fund are made by the
Advisor subject to review by the Fund's trustees. In placing purchase and
sale orders for portfolio securities for the Fund, it is the policy of the
Advisor to seek the best execution of orders at the most favorable price in
light of the overall quality of brokerage and research services provided,
as described in this and the following paragraph. In selecting brokers to
effect portfolio transactions, the determination of what is expected to
result in best execution at the most favorable price involves a number of
largely judgmental considerations. Among these are the Advisor's
evaluation of the broker's efficiency in executing and clearing
transactions, block trading capability (including the broker's willingness
to position securities) and the broker's financial strength and stability.
The most favorable price to the Fund means the best net price without
regard to the mix between purchase or sale price and commission, if any.
Over-the-counter securities are generally purchased and sold directly with
principal market makers who retain the difference in their cost in the
security and its selling price. In some instances, the Advisor feels that
better prices are available from non-principal market makers who are paid
commissions directly. The Advisor may allocate portfolio brokerage on the
basis of whether the broker has sold or is currently selling Shares of the
Fund and may also allocate portfolio brokerage to the Distributor, but, in
each case, only if the Advisor reasonably believes the commissions and
transaction quality are comparable to that available from other qualified
brokers. Under the Investment Company Act of 1940, the Distributor is
prohibited from dealing with the Fund as a principal in the purchase and
sale of securities. Since transactions in the over-the-counter securities
market generally involve transactions with dealers acting as principal for
their own account, the Distributor may not serve as the Fund's dealer in
connection with such transactions. All allocations of portfolio brokerage
to the Distributor, if any, will be conducted in compliance with procedures
adopted in accordance with Rule 17e-1 under the Investment Company Act of
1940. The Distributor, when acting as a broker for the Fund in any of its
portfolio transactions executed on a securities exchange of which the
Distributor is a member, will act in accordance with the requirements of
Section 11(a) of the Securities Exchange Act of 1934 and the rules of such
exchanges.
In allocating brokerage business for the Fund, the Advisor also
takes into consideration the research, analytical, statistical and other
information and services provided by the broker, such as general economic
reports and information, reports or analyses of particular companies or
industry groups, market timing and technical information, and the
availability of the brokerage firm's analysts for consultation. While the
Advisor believes these services have substantial value, they are considered
supplemental to the Advisor's own efforts in the performance of its duties
under the Advisory Agreement. Other clients of the Advisor may indirectly
benefit from the availability of these services to the Advisor, and the
Fund may indirectly benefit from services available to the Advisor as a
result of transactions for other clients. The Advisory Agreement provides
that the Advisor may cause the Fund to pay a broker which provides
brokerage and research services to the Advisor a commission for effecting a
securities transaction in excess of the amount another broker would have
charged for effecting the transaction, if the Advisor determines in good
faith that such amount of commission is reasonable in relation to the value
of brokerage and research services provided by the executing broker viewed
in terms of either the particular transaction or the Advisor's overall
responsibilities with respect to the Fund and the other accounts as to
which he exercises investment discretion.
Pursuant to conditions set forth in rules of the Securities and
Exchange Commission, the Fund may purchase securities from an underwriting
syndicate of which the principal underwriter of the Fund or its affiliates
are members (but not from the principal underwriter itself). Such
conditions relate to the price and amount of the securities purchased, the
commission or spread paid, and the quality of the issuer. The rules
further require that such purchases take place in accordance with
procedures adopted and reviewed periodically by the Trustees, particularly
those trustees who are not "interested persons" of the Fund. Investments
by other clients of the Distributor and the Adviser may limit the ability
of the Fund to purchase securities from such a syndicate.
For the period September 1, 1995 (commencement of operations)
through October 31, 1995, the Fund paid brokerage commissions of $1,532 on
total transactions of $545,152 (excluding short-term investments). No such
fees were paid to Distributor. Some of the brokers to whom commissions
were paid provided research services to the Advisor.
TAXES
As set forth in the Prospectus under the caption "DIVIDENDS,
DISTRIBUTIONS AND TAXES, the Fund intends to qualify annually for and elect
tax treatment applicable to a regulated investment company under Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"). Sixty
percent of any gain or loss realized by the Fund: (i) from net premiums
from expired listed options and from closing purchase transactions; and
(ii) with respect to listed options upon the exercise thereof, generally
will constitute long-term capital gains or losses and the balance will be
short-term gains or losses. Distributions of long-term capital gains, if
designated as such by the Fund, are taxable to shareholders as long-term
capital gain, regardless of how long a shareholder has held shares.
Dividends from the Fund's net investment income and distributions from the
Fund's net realized short-term capital gains are taxable to shareholders as
ordinary income, whether received in cash or in additional Fund shares.
The 70% dividends-received deduction for corporations will apply to such
dividends and distributions, subject to proportionate reductions if the
aggregate dividends received by the Fund from domestic corporations in any
year are less than 100% of the Fund's gross income.
A 4% non-deductible excise tax is imposed on regulated investment
companies that fail to currently distribute specified percentages of their
ordinary taxable income and capital gain net income. The Fund intends to
make sufficient distributions of ordinary taxable income and any capital
gain net income with respect to each calendar year to avoid liability for
this excise tax.
If for any taxable year the Fund does not qualify for the special
federal income tax treatment afforded regulated investment companies, all
of its taxable income will be subject to federal income tax at regular
corporate rates (without any deduction for distributions to its
shareholders).
Any dividend or capital gains distribution paid shortly after a
purchase of Fund shares will have the effect of reducing the per share net
asset value of such shares by the amount of the dividend or distribution.
Furthermore, if the net asset value of the Fund shares immediately after a
dividend or distribution is less than the cost of such shares to the
shareholder, the dividend or distribution will be taxable to the
shareholder even though it results in a return of capital to him.
The Fund may be required to withhold Federal income tax at a rate
of 31% ("backup withholding") from dividend payments and redemption
proceeds if a shareholder fails to furnish the Fund with his social
security or other tax identification number and certify under penalty of
perjury that such number is correct and that he is not subject to backup
withholding due to the under reporting of income. The certification form
is included as part of the share purchase application and should be
completed when the account is opened.
SHAREHOLDER MEETINGS
It is contemplated that the Fund will not hold an annual meeting
of shareholders in any year in which the election of trustees is not
required to be acted on by shareholders under the Investment Company Act of
1940. The Fund's Trust Instrument and Bylaws also contain procedures for
the removal of trustees by the Fund's shareholders. At any meeting of
shareholders, duly called and at which a quorum is present, the
shareholders may, by the affirmative vote of the holders of at least
two-thirds (2/3) of the outstanding shares, remove any trustee or trustees.
Upon the written request of the holders of shares entitled to not
less than ten percent (10%) of all the votes entitled to be cast at such
meeting, the Secretary of the Fund shall promptly call a special meeting of
shareholders for the purpose of voting upon the question of removal of any
trustee. Whenever ten or more shareholders of record who have been such
for at least six months preceding the date of application, and who hold in
the aggregate either shares having a net asset value of at least $25,000 or
at least one percent (1%) of the total outstanding shares, whichever is
less, shall apply to the Fund's Secretary in writing, stating that they
wish to communicate with other shareholders with a view to obtaining
signatures to a request for a meeting as described above and accompanied by
a form of communication and request which they wish to transmit, the
Secretary shall within five business days after such application either:
(1) afford to such applicants access to a list of the names and addresses
of all shareholders as recorded on the books of the Fund; or (2) inform
such applicants as to the approximate number of shareholders of record and
the approximate cost of mailing to them the proposed communication and form
of request.
If the Secretary elects to follow the course specified in clause
(2) of the last sentence of the preceding paragraph, the Secretary, upon
the written request of such applicants, accompanied by a tender of the
material to be mailed and of the reasonable expenses of mailing, shall,
with reasonable promptness, mail such material to all shareholders of
record at their addresses as recorded on the books unless within five
business days after such tender the Secretary shall mail to such applicants
and file with the Securities and Exchange Commission, together with a copy
of the material to be mailed, a written statement signed by at least a
majority of the trustees to the effect that in their opinion either such
material contains untrue statements of fact or omits to state facts
necessary to make the statements contained therein not misleading, or would
be in violation of applicable law, and specifying the basis of such
opinion.
After opportunity for hearing upon the objections specified in
the written statement so filed, the Securities and Exchange Commission may,
and if demanded by the trustees or by such applicants shall, enter an order
either sustaining one or more of such objections or refusing to sustain any
of them. If the Securities and Exchange Commission shall enter an order
refusing to sustain any of such objections, or if, after the entry of an
order sustaining one or more of such objections, the Securities and
Exchange Commission shall find, after notice and opportunity for hearing,
that all objections so sustained have been met, and shall enter an order so
declaring, the Secretary shall mail copies of such material to all
shareholders with reasonable promptness after the entry of such order and
the renewal of such tender.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., 411 E. Wisconsin Avenue, Milwaukee,
Wisconsin 53202, has been selected as the independent accountants for the
Fund. Coopers & Lybrand L.L.P. conducts an annual audit of the Fund,
assists in the preparation of the Fund's federal and state tax returns and
consults with the Fund as to matters of accounting and Federal and State
income taxation.
FINANCIAL STATEMENTS
The following financial statements are incorporated by reference
to the Jefferson Growth and Income Fund Annual Report dated October 31,
1995 (File No. 811-8958), as filed with the Securities and Exchange
Commission on December 28, 1995:
The Jefferson Fund Group Trust
Statement of Assets and Liabilities
Schedule of Investments
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements (financial highlights included in Part A and
all other Financial Statements included in Part B are all
incorporated by reference to the Jefferson Growth and Income Fund
Annual Report dated October 31, 1995 (File No. 811-8958) (as
filed with the Securities and Exchange Commission on December 28,
1995))
The Jefferson Fund Group Trust
Statement of Assets and Liabilities
Schedule of Investments
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
(b) Exhibits
1.1 Registrant's Certificate of Trust (Exhibit 1.1 to
Registrant's Registration Statement on Form N-1A, which was
filed on January 25, 1995 ("Form N-1A") is incorporated by
reference).
1.2 Registrant's Trust Instrument (Exhibit 1.2 to Form N-1A
is incorporated by reference).
2 Registrant's Bylaws (Exhibit 2 to Form N-1A is incorporated
by reference).
3 None
4 None
5 Investment Advisory Agreement (Exhibit 5 to Form N-1A is
incorporated by reference).
6.1 Distribution Agreement (Exhibit 6.1 to Form N-1A is
incorporated by reference).
6.2 Form of Sales Agreement (Exhibit 6.2 to Form N-1A is
incorporated by reference).
7 None
8 Custodian Agreement with Firstar Trust Company (Exhibit B to
Post-Effective Amendment No. 1 to Registrant's Form N-1A,
which was filed on August 14, 1995 ("Amendment No. 1") is
incorporated by reference)
9.1 Administration Agreement with Firstar Trust Company
(Exhibit 9.1 to Amendment No. 1 is incorporated by
reference)
9.2 Transfer Agent Agreement with Firstar Trust Company
(Exhibit 9.2 to Amendment No. 1 is incorporated by
reference)
9.3 Accounting Services Agreement With Firstar Trust Company
(Exhibit 9.3 to Amendment No. 1 is incorporated by
reference)
10 Opinion of Foley & Lardner, counsel for Registrant (Exhibit
10 to Amendment No. 1 is incorporated by reference)
11.1 Consent of Coopers & Lybrand L.L.P.
11.2 Consent and Opinion of Smrecek & Co., S.C.
12 None
13 Subscription Agreement (Exhibit 13 to Form N-1A is
incorporated by reference)
14.1 Revised Form of Individual Retirement Custodial Account
(Exhibit 14.1 to Amendment No. 1 is incorporated by
reference)
14.2 Revised Form of Defined Contribution
Retirement Plan (Exhibit 14.2 to Amendment No. 1 is
incorporated by reference)
15.1 Distribution and Servicing Plan of Class A Shares (Exhibit
15.1 to Form N-1A is incorporated by reference)
15.2 Distribution and Servicing Plan of Class B Shares (Exhibit
15.2 to Form N-1A is incorporated by reference)
15.3 Distribution Assistance Agreement (Class A) (Exhibit 15.3 to
Form N-1A is incorporated by reference)
15.4 Distribution Assistance Agreement (Class B) (Exhibit 15.4 to
Form N-1A is incorporated by reference)
16 Schedule for Computation of Performance Quotation
17 Powers of Attorney for Lawrence Kujawski, John Komives,
Michael Borden, Dennis Lasser and James L. Stanko,
Trustees of the Trust.
18 Plan pursuant to Rule 18f-3 For Operation of a Multi Class
System.
Item 25. Persons Controlled by or under Common Control with Registrant
-------------------------------------------------------------
As of January 31, 1996, Registrant neither controls any person
nor is under common control with any other person.
Item 26. Number of Holders of Securities
-------------------------------
Number of Record Holders
Title of Class as of January 31, 1996
-------------- ----------------------
Class A Shares of Beneficial Interest,
no par value 69
Class B Shares of Beneficial Interest,
no par value 12
Item 27. Indemnification
---------------
Pursuant to Chapter 38 of Title 12 of the Delaware Code, the
Registrant's Trust Instrument, dated January 20, 1995, contains the
following article, which is in full force and effect and has not been
modified or cancelled:
ARTICLE X
---------
LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------
Section 10.1. Limitation of Liability . A Trustee, when acting
------------ -----------------------
in such capacity, shall not be personally liable to any person other than
the Trust or a beneficial owner for any act, omission or obligation of the
Trust or any Trustee. A Trustee shall not be liable for any act or
omission or any conduct whatsoever in his capacity as Trustee, provided
that nothing contained herein or in the Delaware Act shall protect any
Trustee against any liability to the Trust or to Shareholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee hereunder.
Section 10.2. Indemnification.
------------ ---------------
(a) Subject to the exceptions and limitations contained in
Section 10.2(b) below:
(i) every Person who is, or has been, a Trustee or officer
of the Trust (hereinafter referred to as a "Covered Person")
shall be indemnified by the Trust to the fullest extent permitted
by law against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action,
suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in the
settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while
in office or thereafter, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and other
liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body
before which the proceeding was brought (A) to be liable to the
Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office or (B) not to have acted in
good faith in the reasonable belief that his action was in the
best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are
neither Interested Persons of the Trust nor are parties to
the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based
upon a review of readily available facts (as opposed to a
full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees or
by independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be a Covered Person and shall inure to the benefit
of the heirs, executors and administrators of such a person. Nothing
contained herein shall affect any rights to indemnification to which
Trust personnel, other than Covered Persons, and other persons may be
entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation
of a defense to any claim, action, suit or proceeding of the character
described in paragraph (a) of this Section 10.2 may be paid by the
Trust or Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the Trust or Series if it
is ultimately determined that he is not entitled to indemnification
under this Section 10.2; provided, however, that either (a) such
Covered Person shall have provided appropriate security for such
undertaking, (b) the Trust is insured against losses arising out of
any such advance payments or (c) either a majority of the Trustees who
are neither Interested Persons of the Trust nor parties to the matter,
or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed
to a trial-type inquiry or full investigation), that there is reason
to believe that such Covered Person will be found entitled to
indemnification under this Section 10.2.
Section 10.3. Shareholders. In case any Shareholder or former
------------ ------------
Shareholder of any Series shall be held to be personally liable solely by
reason of his being or having been a Shareholder of such Series and not
because of his acts or omissions or for some other reason, the Shareholder
or former Shareholder (or his heirs, executors, administrators or other
legal representatives, or, in the case of a corporation or other entity,
its corporate or other general successor) shall be entitled out of the
assets belonging to the applicable Series to be held harmless from and
indemnified against all loss and expense arising from such liability. The
Trust, on behalf of the affected Series, shall, upon request by the
Shareholder, assume the defense of any claim made against the Shareholder
for any act or obligation of the Series and satisfy any judgment thereon
from the assets of the Series.
Insofar as indemnification for and with respect to liabilities
arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by Registrant of expenses incurred or paid by a director,
officer or controlling person or Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification 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
----------------------------------------------------
Uniplan, Inc. ("Adviser") was organized as a Wisconsin
corporation in 1985 and is registered as an investment adviser under the
Investment Advisers Act of 1940. Adviser does not manage any other mutual
fund; however, Adviser does manage various individual, profit-sharing,
pension and institutional accounts.
Set forth below are the substantial business engagements during
the two last fiscal years of each director or officer of Adviser.
NAME BUSINESS AND OTHER CONNECTIONS
---- ------------------------------
Richard Imperiale President and Treasurer of Adviser
Member of Board of Directors of Adviser
Jeffrey DeCora Vice President and Secretary of Adviser
Member of Board of Directors of Adviser
Item 29. Principal Underwriters
----------------------
(a) Rodman and Renshaw (the "Distributor") acts as the
Registrant's principal underwriter.
(b) Information with respect to directors and officers of
Distributor is as follows:
Positions and Offices
Names and Principal with Principal Positions and
Addresses Underwriter Officers with
Registrant
- ---------------------------------------------------------------------
Charles W. Daggs, III President, Director Not Applicable
Keith Pinsoneault Executive Vice President President, Treasurer
and Trustee
James D. Van De Graaff Executive Vice President, Not Applicable
Secretary, Director
Joseph P. Shanahan Executive Vice President Not Applicable
Peter Boneparth Executive Vice President Not Applicable
Francis L. Kirby Executive Vice President Not Applicable
Edwin J. McGuinn, Jr. Executive Vice President Not Applicable
David Shulman Executive Vice President Not Applicable
Eileen McChesney Kelly Senior Vice President, Not Applicable
Assistant Secretary
Robert A. Bade Senior Vice President Not Applicable
Christopher Casey Senior Vice President Not Applicable
Charles Henry Senior Vice President Not Applicable
John P. McGowan Senior Vice President Not Applicable
Martin Pembroke Treasurer Not Applicable
Rodrigo Padilla Director Not Applicable
Thomas Paulus Controller Not Applicable
John T. Hague Executive Vice President, Not Applicable
Chief Financial Officer,
Director
Item 30. Location of Accounts and Records
--------------------------------
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the physical possession of Registrant,
Registrant's Custodian and Registrant's Administrator as follows: the documents
required to be maintained by paragraphs (5) and (11) of Rule 31a-1(b) will be
maintained by the Registrant; the documents required to be maintained by
paragraphs (3) and (7) of Rule 31a-1(b) will be maintained by Registrant's
Custodian; and all other records will be maintained by Registrant's
Administrator.
Item 31. Management Services
-------------------
All management-related service co ntracts entered into by Registrant
are discussed in Parts A and B of this Registration Statement.
Item 32. Undertakings
------------
Registrant undertakes to, if requested to do so by the holders of at
least 10% of Registrant's outstanding shares, call a meeting of shareholders for
the purpose of voting upon the question of removal of a trustee or trustees and
assist in communications with other shareholders as required by Section 16(c) of
the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amended Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amended Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, the City of Chicago and State of
Illinois on the 26th day of February, 1996.
THE JEFFERSON FUND GROUP TRUST
(Registrant)
By: /s/ Keith Pinsoneault
----------------------------------
Keith Pinsoneault
President, Treasurer and Trustee
Pursuant to the requirements of the Securities Act of 1933,this Amended
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Name Title Date
---- ----- ----
Keith Pinsoneault Principal Executive, February 26, 1996
- --------------------
Keith Pinsoneault Financial and Accounting
Officer, President, Treasurer,
and Trustee
Richard Imperiale Chairman, Secretary February 26, 1996
- ------------------- and Trustee
Richard Imperiale
Trustee February 26, 1996
- ------------------
Lawrence Kujawski*<F18>
Trustee February 26, 1996
- ------------------
John Komives*<F18>
Trustee February 26, 1996
- -------------------
J. Michael Borden*<F18>
Trustee February 26, 1996
- -----------------
Dennis Lasser*<F18>
Trustee February 26, 1996
- -------------------
James L. Stanko*<F18>
* <F18> By Keith Pinsoneault, Attorney-in-fact
EXHIBIT INDEX
-------------
Exhibit No. Exhibit Page No.
- ----------- ------- --------
(1.1) Registrant's Certificate of Trust*<F19>
(1.2) Registrant's Trust Instrument*<F19>
(2) Registrant's Bylaws*<F19>
(3) None
(4) None
(5) Investment Advisory Agreement*<F19>
(6.1) Distribution Agreement*<F19>
(6.2) Form of Sales Agreement*<F19>
(7) None
(8) Custodian Agreement with Firstar*<F19>
Trust Company
(9.1) Administration Agreement with
Firstar Trust Company*<F19>
(9.2) Transfer Agent Agreement with
Firstar Trust Company*<F19>
(9.3) Accounting Services Agreement
with Firstar Trust Company*<F19>
(10) Opinion of Foley & Lardner,
counsel for Registrant*<F19>
(11.1) Consent of Coopers & Lybrand
L.L.P.
(11.2) Consent and Opinion of
Smrecek & Co., S.C.
(12) None
(13) Subscription Agreement*<F19>
(14.1) Revised Form of Individual
Retirement Custodial
Account*<F19>/R>
(14.2) Revised Form of Defined
Contribution
Retirement Plan*<F19>
(15.1) Distribution and Servicing
Plan of Class A Shares*<F19>
(15.2) Distribution and Servicing
Plan of Class B Shares*<F19>
(15.3) Distribution Assistance
Agreement (Class A)*<F19>
(15.4) Distribution Assistance
Agreement (Class B)*<F19>
(16) Schedule for Computation
of Performance Quotation
(17) Power of Attorney for Lawrence
Kujawski, John Komives,
Michael Borden, Dennis Lasser
and James Stanko, Trustees of
the Trust.
(18) Plan pursuant to Rule 18f-3 For
Operation of Multi Class System
*<F19>Incorporated herein by reference.
Exhibit 11.1
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
The Jefferson Fund Group Trust
We consent to the incorporation by reference in Post-Effective Amendment No. 2
to the Registration Statement of the Jefferson Fund Group Trust on Form N-1A
of our report dated November 17, 1995 on our audit of the financial statements
and financial highlights of Jefferson Growth and Income Fund, a series of The
Jefferson Fund Grup Trust, which report is included in the Annual Report to
Shareholders for the period from September 1, 1995 to October 31, 1995 which
is also incorporated by reference in the Registration Statement. We also consent
to the reference to our Firm under the caption "Independent Accountants" in the
Statement of Additional Information.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
February 26, 1996
Exhibit 11.2
(SMRECEK & CO., S.C. LOGO)
CONSENT OF SMRECEK & CO., S.C.
we consent to the reference to our firm under the caption "Historical
Performance Data for the Advisor" and to the use of our report on the Schedule
of Investment Performance Results, for the calendar periods reported corporate
and noncorporate retirement plans and personal accounts managed by Uniplan,
Inc. for the year ended January, 1988 through December, 1995, in the
Registration Statement (Form N-1A No. 33-88756) and the related Prospectus of
Jefferson Growth and Income Fund.
/s/ Smrecek & Co., S.C.
SMRECEK & CO., S.C.
Milwaukee, Wisconsin
February 28, 1996
UNIPLAN, INC.
SCHEDULE OF INVESTMENT PERFORMANCE RESULTS
DECEMBER, 1988 THROUGH 1995
REPORT OF INDEPENDENT ACCOUNTANTS
Uniplan, Inc.
We have examined the accompanying Schedule of Investment Performance Results
for the calendar periods reported corporate and noncorporate retirement plans
and personal accounts managed by Uniplan, Inc. for the years ended December,
1988 through 1995. Our examination was made in accordance with standards
established by the American Institute of Certified Public Accountants and,
accordingly, included such procedures as we considered necessary in the
circumstances.
In our opinion, the schedule referred to above presents the composite rate of
return for the calendar periods reported corporate and noncorporate retirement
plans and personal accounts managed by Uniplan, Inc. for the years ended
December, 1988 through 1995, in conformity with the basis of presentation
described in the accompanying schedule.
SMRECEK & CO., S.C.
/s/ Smrecek & Co., S.C.
February 28, 1996
UNIPLAN, INC.
INVESTMENT PERFORMANCE RESULTS
BALANCED COMPOSITE
JANUARY, 1988 - DECEMBER, 1995
TOTAL
ASSETS END PERCENT
TOTAL BENCHMARK NUMBER OF OF PERIOD OF FIRM
YEAR RETURN RETURN PORTFOLIOS ($MILLIONS) ASSETS
- ------- ------- --------- ---------- ----------- -------
1988 17.3 12.1 7 28.0 100
1989 28.2 22.9 18 43.3 65
1990 17.5 2.7 17 49.2 53
1991 29.3 23.4 36 71.3 62
1992 12.6 7.7 40 85.9 61
1993 11.2 10.6 45 92.2 52
1994 1.6 -0.3 54 163.7 74
1995 16.7 26.0 107 272.9 74
Notes:
1. These results have been prepared and presented in compliance with the AIMR
Performance Presentation Standards for the period 1/88 through 12/95.
2. Results for the full historical period are time weighted. The composites
are valued quarterly, and portfolio returns are weighted by using beginning
-of-quarter market value plus weighted cash flows.
3. The benchmark: 50% S&P500; 50% Lehman Government/Corporate Index. Annualized
Compound Composite Return = 16.25%.
Annualized Compound Benchmark Return = 11.7%.
4. Standard deviation in annual composite returns equals 10.00% versus a
standard deviation in the yearly benchmark returns of 8.88%.
5. The dispersion of annual returns as measured by the asset-weighted
dispersion of returns for fully discretionary portfolios in the composite
is as follows: 1988, 11.7%; 1989, 15.01%; 1990, 13.01%; 1991, 8.84%;
1992, 4.50%; 1993, 3.61%; 1994, 10.65%; and 1995, 8.61%.
6. Performance results are presented before managment and custodial fees for
the period 1/93 through 12/95. Performance results are net of management
fees and custody charges for all prior periods. Average annual fees and
custody charges for the period 1/88 through 12/92 were 1.05% per annum.
The management fee schedule is 1% of the first $5.0 million per annum;
.75 of 1% of the next $5.0 million; .50 of 1% of any assets therafter.
7. No alteration of composite as presented has occurred because of changes in
personnel or other reasons.
Exhibit 16
JEFFERSON GROWTH AND INCOME FUND
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
WITHOUT SALES CHARGE: CLASS A SHARES
FOR THE PERIOD SEPTEMBER 1, 1995 (commencement of operations)
TO OCTOBER 31, 1995
Total Return = (Ending Redeemable Value / Initial Value)-1
Total Return = (1,004.00/1,000.00)-1
Total Return = 0.40%
WITHOUT CONTINGENT DEFERRED SALES CHARGE: CLASS B SHARES
FOR THE PERIOD SEPTEMBER 1, 1995 (commencement of operations)
TO OCTOBER 31, 1995
Total Return = (Ending Redeemable Value / Initial Value)-1
Total Return = (1,003.00/1,000.00)-1
Total Return = 0.30%
WITH MAXIMUM FRONT END SALES CHARGE
FOR THE PERIOD SEPTEMBER 1, 1995 (commencement of operations)
TO OCTOBER 31, 1995
Total Return = (Ending Redeemable Value / Initial Value)-1
Total Return = (948.96/1,000.00)-1
Total Return = -5.10%
WITH MAXIMUM CONTINGENT DEFERRED SALES CHARGE
FOR THE PERIOD SEPTEMBER 1, 1995 (commencement of operations)
TO OCTOBER 31, 1995
Total Return = (Ending Redeemable Value / Initial Value)-1
Total Return = (953.00/1,000.00)-1
Total Return = -4.70%
Exhibit 17
POWER OF ATTORNEY
-----------------
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Keith Pinsoneault and Richard Imperiale and each or either of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign the Amended Registration Statement on Form N-1A of
The Jefferson Fund Group Trust and any and all amendments (including post-
effective amendments) thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each in and about
the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitutes, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 31st day of December, 1995.
/s/ John Komives
-----------------------------------
John Komives
POWER OF ATTORNEY
-----------------
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Keith Pinsoneault and Richard Imperiale and each or either of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign the Amended Registration Statement on Form N-1A of
The Jefferson Fund Group Trust and any and all amendments (including post-
effective amendments) thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each in and about
the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitutes, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 31st day of December, 1995.
/s/ Lawrence Kujawski
-----------------------------------
Lawrence Kujawski
POWER OF ATTORNEY
-----------------
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Keith Pinsoneault and Richard Imperiale and each or either of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign the Amended Registration Statement on Form N-1A of
The Jefferson Fund Group Trust and any and all amendments (including post-
effective amendments) thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each in and about
the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitutes, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 31st day of December, 1995.
/s/Michael Borden
-----------------------------------
Michael Borden
POWER OF ATTORNEY
-----------------
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Keith Pinsoneault and Richard Imperiale and each or either of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign the Amended Registration Statement on Form N-1A of
The Jefferson Fund Group Trust and any and all amendments (including post-
effective amendments) thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each in and about
the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitutes, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 31st day of December, 1995.
/s/ Dennis Lasser
-----------------------------------
Dennis Lasser
POWER OF ATTORNEY
-----------------
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Keith Pinsoneault and Richard Imperiale and each or either of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign the Amended Registration Statement on Form N-1A of
The Jefferson Fund Group Trust and any and all amendments (including post-
effective amendments) thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each in and about
the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitutes, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 31st day of December, 1995.
/s/ James L. Stanko
-----------------------------------
James L. Stanko
Exhibit 18
THE JEFFERSON FUND GROUP TRUST (THE "TRUST")
PLAN PURSUANT TO RULE 18f-3 FOR OPERATION OF
A MULTI CLASS SYSTEM
I. INTRODUCTION
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On February 23, 1995, the Securities and Exchange Commission (the
"Commission") promulgated Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act') which permits the creation and operation of a multi-
class distribution structure without the need to obtain an exemptive order under
Section 18 of the 1940 Act. Rule 18f-3, which became effective on April 3,
1995, requires an investment company to adopt a written plan specifying all of
the differences among classes, including the various services offered to
shareholders, different distribution arrangements for each class, methods for
allocating expenses relating to those differences and any conversion features or
exchange privileges. This Plan pursuant to Rule 18f-3 for operation of a multi-
class system shall become effective on September 1, 1995.
II. ATTRIBUTES OF CLASSES
--------------------------
A. Generally
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The Trust shall initially offer two classes -- Class A and Class B shares.
In general, shares of each class shall be identical except for different
expense variables (which will result in different returns for each class). More
particularly, the Class A and Class B shares of the Jefferson Growth and Income
Fund (the "Fund") of the Trust shall represent interests in the same portfolio
of investments of the Fund, and shall be identical in all respects, except for
(a) the impact of (i) expenses assessed to a class pursuant to Distribution and
Service Plans (collectively, the "Plans"), and (ii) any other incremental
expenses subsequently identified that should be properly allocated to one class
so long as any subsequent changes in expense allocations are reviewed and
approved by a vote of the Board including a majority of the independent
trustees; (b) the fact that each Class shall vote separately with respect to the
Fund's Plans and any matter submitted to shareholders relating to Class
expenses; (c) the designation of each Class of shares of the Fund; and (d) the
sales load and contingent deferred sales charge ("CDSC").
B. Distribution Arrangements, Expenses, Sales Charges and CDSC.
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The Class A shares of the Fund shall be subject to a shareholder servicing
fee payable pursuant to the Plans which shall not initially exceed 0.25% (on an
annual basis) of the average daily net assets attributable to the Class A shares
further subject to a sales charge which shall not initially exceed 5.5% of the
offering price of the Class A shares.
The servicing fee may be spent by the Distributor on personal services
rendered to shareholders of the Fund and the maintenance of shareholder
accounts, including compensation to, and expenses (including telephone and
overhead expenses) of financial consultants or other employees of the
Distributor or of participating or introducing brokers who aid in the processing
of purchase or redemption requests or the processing of dividend payments, who
provide information periodically to shareholders showing their positions in the
Fund's shares, who forward communications from the Fund to shareholders, who
render ongoing advice concerning the suitability of particular investment
opportunities offered by the Fund in light of the shareholders' needs, who
respond to inquiries from shareholders relating to such services, or who train
personnel in the provision of such services. Distribution and servicing fees
may also be spent on interest relating to unreimbursed distribution or servicing
expenses from prior years.
The Class B shares of the Fund shall be subject to a shareholder servicing
and distribution fee payable pursuant to the Plans which shall not initially
exceed 0.25% and 0.75%, respectively, (on an annual basis) of the average daily
net assets attributable to Class B shares. Class B shares shall not subject to
a sales charge, but may be subject to a CDSC of not more than 5% depending on
the length of time an investor holds its shares.
The servicing fee may be spent by the Distributor in the same manner as set
forth above for Class A shares. The distribution fee applicable to Class B
shares may be spent by the Distributor on any activities or expenses primarily
intended to result in the sale of Class B shares of the Fund including
compensation to any expenses (including overhead and telephone expenses) of
financial consultants or other employees of the Distributor or of participating
or introducing brokers who engage in distribution of Class B shares, printing of
prospectuses and reports for other than existing Class B shareholders
advertising and preparation, printing and distribution of sales literature.
C. Other Attributes
----------------
Both Class A shares and Class B shares shall be eligible for exchange
privileges, periodic investment plans and systematic withdrawal plans for the
Fund, as in effect from time to time.
D. Methodology for Allocating Expenses Between Classes
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In allocating expenses a determination shall be made as to which expenses
are Class level and which expenses are Fund level.
Prior to determining the day's net asset value, the following expense items
must be calculated as indicated:
1. ADVISER'S FEE
The current day's accrual shall be calculated using the beginning of
the day's total net assets of the Fund, and shall be allocated to each class
based upon the relative "adjusted net assets" of each class.
2. DISTRIBUTION AND SERVICE FEES
The current day's accrual shall be separately calculated using the
beginning of the day's net assets attributable to Class A shares or Class B
shares, as the case may be, based on the rates as stated in the Plans.
3. OTHER CLASS SPECIFIC EXPENSES
Daily accruals shall be made for each class based on budgeted expenses
attributable to each such class.
4. OTHER EXPENSES
Daily accruals shall be determined from expense budgets and will be
allocated to each class based upon the relative "adjusted net assets" of each
class.
