As filed with the Securities and Exchange Commission on December 1, 1998
Registration Nos. 33-88756
811-8958
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 x
Pre-Effective Amendment No.
Post-Effective Amendment No.5 x
and/or
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 x
Amendment No. 5 x
(Check appropriate box or boxes.)
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THE JEFFERSON FUND GROUP TRUST
----------------------------------------
(Exact Name of Registrant as Specified in Charter)
839 N. Jefferson Street
Milwaukee, Wisconsin 53202
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(Address of Principal Executive Offices) (ZIP Code)
(800) 216-9786
----------------------------------------
(Registrant's Telephone Number,
including Area Code)
Lawrence Kujawski Copy to:
The Jefferson Fund Group Trust David T. Rusoff
839 N. Jefferson Street Foley & Lardner
Milwaukee, Wisconsin 53202 330 N. Wabash Avenue, Suite 3300
----------------------------- Chicago, Illinois 60611
(Name and Address of Agent for Service) -------------------------------
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective.
It is proposed that this filing become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (1)
on (date) (pursuant to paragraph (a) (1)
75 days after filing pursuant to paragraph (a) (2)
x on February 28, 1999 pursuant to paragraph (a) (2) of Rule 485
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
THE JEFFERSON FUND GROUP TRUST
PROSPECTUS FOR THE
JEFFERSON GROWTH AND INCOME FUND
JEFFERSON REGIONAL BANK FUND
AND
JEFFERSON REIT FUND
NOVEMBER , 1998
The Jefferson Fund Group Trust (the "Trust") is a Delaware business trust
that issues and sells different series of its securities. The Trust is an
open-end management investment company. Each series of the Trust obtains its
assets by continuously selling shares of beneficial interest to the public.
Each series of the Trust invests its assets as described in this Prospectus
to attain the objectives set forth in this Prospectus.
The Trust currently issues three series of its securities: the Jefferson
Growth and Income Fund, the Jefferson Regional Bank Fund, and the Jefferson
REIT Fund (each a "Fund" and together, the "Funds"). Each Fund is commonly
known as a "mutual fund." This Prospectus sets forth information for
potential buyers of Fund shares to consider in making their investment
decision. The Funds are intended for long-term investors, not for those who
may wish to redeem their shares after a short period of time.
THE FUND SHARES DESCRIBED IN THIS PROSPECTUS HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION AND THE SECURITIES AND
EXCHANGE COMMISSION HAS NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
PAGE
RISK/RETURN SUMMARY 1
PRINCIPAL RISK CONSIDERATIONS 2
FINANCIAL HIGHLIGHTS 4
FEE AND EXPENSE INFORMATION 5
INVESTMENT OBJECTIVES AND POLICIES 8
ADDITIONAL RISK INFORMATION 12
MANAGEMENT AND ORGANIZATION OF THE FUNDS 13
SHAREHOLDER INFORMATION 14
DISTRIBUTION ARRANGEMENTS 28
RETIREMENT PLANS 28
HISTORICAL PERFORMANCE DATA RELATING TO
THE REGIONAL BANK FUND AND THE REIT FUND 30
RISK/RETURN SUMMARY
IN GENERAL
Each of the Funds obtains its assets by continuously selling shares of
beneficial interest to the public. Proceeds from such sales are invested by the
Funds as set forth in this Prospectus. The resources of many investors are thus
combined and each individual investor in a Fund has an interest in the
investments made by that Fund.
Uniplan, Inc. ("Uniplan") is the investment adviser for the Jefferson Growth
and Income Fund and the Jefferson REIT Fund. Marshall Capital Management, Inc.
("Marshall Capital"), an affiliate of Howe Barnes Investments, Inc., a broker-
dealer ("Howe Barnes"), is the investment adviser for the Jefferson Regional
Bank Fund. Uniplan and Marshall Capital select investments to be made by the
Funds they advise. Adviser Dealer Services, Inc., (the "Distributor") is the
distributor and principal underwriter of shares of all three Funds.
JEFFERSON GROWTH AND INCOME FUND
The Jefferson Growth and Income Fund (the "Growth and Income Fund") aims to
produce long-term capital appreciation and current income primarily by investing
in equity securities.
Most of the time more than 50% of the Growth and Income Fund's portfolio will
be invested in equity securities. Under normal circumstances, the rest of the
Growth and Income Fund's portfolio will primarily be invested in non-convertible
debt securities, including short-term money market instruments and U.S.
Government and agency securities.
JEFFERSON REGIONAL BANK FUND
The Jefferson Regional Bank Fund (the "Regional Bank Fund") aims to produce
long-term capital appreciation by investing principally in equity securities of
regional banks and lending institutions, including commercial and industrial
banks, savings and loan institutions, and bank holding companies. Typically,
the financial institutions in which the Regional Bank Fund will invest provide
full-service banking, have primarily domestic assets and are usually based
outside of New York City and Chicago. The financial institutions may or may not
be members of the Federal Reserve, and their deposits may or may not be insured
by the Federal Deposit Insurance Corporation.
Under normal circumstances the Regional Bank Fund will invest at least 65% of
its assets in equity securities of regional banks and lending institutions; it
may invest the remaining 35% of its assets in the equity securities of other
financial services companies (including lending companies and banks in New York
or Chicago), in stocks of non-financial services companies and in non-
convertible debt securities of various other issuers.
JEFFERSON REIT FUND
The Jefferson REIT Fund (the "REIT Fund") aims primarily to produce current
income and secondarily to produce capital appreciation by investing in real
estate equity securities, including common shares (including shares and units of
beneficial interest of real estate investment trusts ("REITs")), preferred
shares, rights or warrants to purchase such common shares, and securities
convertible into common shares where the conversion feature represents a
significant element of the security's value.
The REIT Fund will normally invest at least 65% of its total assets in the
equity securities of real estate companies; it may also invest up to 35% of its
assets in debt securities issued or guaranteed by real estate companies. Under
these investment guidelines, a "real estate company" is one that derives at
least 50% of its revenues from the ownership, construction, financing,
management or sale of commercial, industrial or residential real estate or has
at least 50% of its assets in such real estate.
PRINCIPAL RISK CONSIDERATIONS
RISKS COMMON TO ALL JEFFERSON FUNDS
Loss of Money. The value of each Fund's portfolio and each Fund's price per
share will vary based upon general market conditions. A Fund may not achieve
its objectives, and an investor in a Fund may lose all or part of his or her
investment.
Market Risk. Share prices and bond prices of all corporations are subject to
market risk. This may result in fluctuations in the net asset value and price
of the Funds' shares.
"Year 2000" Risk. Like other mutual funds, financial and business
organizations and individuals around the world, the Funds could be adversely
affected if the computer systems used by the Funds' service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." Uniplan and
Marshall Capital are taking steps to address the Year 2000 Problem for their
computer systems and have obtained reasonable assurances that similar steps are
being taken by the Funds' other major service providers.
Security-Specific Risks. Different types of securities in which the Funds
may invest have risks specific to those securities. For example, investment in
lower-rated, high yield, 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 appreciate when
interest rates decline and depreciate when interest rate rise. The Funds'
investment in non-convertible debt securities may cause the price of the shares
to fluctuate in the same manner.
RISKS PARTICULAR TO THE JEFFERSON REGIONAL BANK FUND
Industry Concentration. Because the Regional Bank Fund concentrates in a
single industry, its performance is largely dependent on the industry's
performance, which may differ in direction and degree from that of the overall
stock market. Falling interest rates or deteriorating economic conditions can
adversely affect the performance of bank stocks, while rising interest rates
will cause a decline in the value of any debt securities the Regional Bank Fund
holds.
Changes in State and Federal Law. Changes in state and Federal law are
producing significant changes in the banking and financial services industries.
Deregulation has resulted in the diversification of certain financial products
and services offered by banks and financial services companies, creating
increased competition between them. In addition, state and Federal legislation
authorizing interstate acquisitions as well as interstate branching has
facilitated the increasing consolidation of the banking and thrift industries.
Although regional banks involved in intrastate and interstate mergers and
acquisitions may benefit from such regulatory changes, those which do not
participate in such consolidation may find that it is increasingly difficult to
compete effectively against larger banking combinations. Proposals to change
the laws and regulations governing banks and companies that control banks are
frequently introduced at the Federal and state levels and before various bank
regulatory agencies. The likelihood of any changes and the impact such changes
might have on the Regional Bank Fund are impossible to determine.
RISKS PARTICULAR TO THE JEFFERSON REIT FUND
Industry Concentration. Because the REIT Fund will be concentrated in the
real estate industry, the Fund is subject to the risks associated with direct
ownership of real estate. For example, real estate values may fluctuate as a
result of general and local economic conditions, overbuilding and increased
competition, increases in property taxes and operating expenses, changes in
zoning laws, casualty or condemnation losses, regulatory limitations on rents,
changes in neighborhood values, changes in the appeal of properties to tenants
and increases in interest rates. The value of securities of companies which
service the real estate business sector may also be affected by such risks.
REIT-Specific Risks. Because the REIT Fund may invest a substantial portion
of its assets in REITs, the Fund has risks associated with direct investments in
REITs. REITs may be affected by changes in the value of their underlying
properties and/or by defaults by borrowers or tenants. Furthermore, REITs are
dependent upon specialized management skills, have limited diversification and
are, therefore, subject to risks inherent in financing a limited number of
projects.
Non-Diversified Fund. The REIT Fund is a "non-diversified" fund, that is,
the law does not limit the proportion of the Fund's assets that may be invested
in the securities of a single issuer. Less diversification means the REIT Fund
may be more susceptible to adverse economic, political or regulatory
developments affecting a single issuer than if the Fund were more diversified.
Portfolio Trading. The REIT Fund may engage in portfolio trading when
Uniplan considers such trading appropriate but will not use short-term trading
as the primary means of achieving its investment objective. Under normal
circumstances, the Fund does not expect its portfolio turnover rate to exceed
100%. However, the REIT Fund does not place limits on the rate of portfolio
turnover, and investments may be sold without regard to length of time held.
Higher rates of portfolio turnover and greater use of short-term trading create
greater commission expenses and transaction costs.
RISK/RETURN BAR CHART AND TABLE FOR THE JEFFERSON GROWTH AND INCOME FUND
The following bar chart illustrates the variability of the Growth and Income
Fund's returns. It shows changes in the Fund's performance from year to year
and shows how the Fund's annual returns for each of the past three calendar
years periods compare with those of Russell 2000 Index, a broad measure of
market performance, over the same periods. The Growth and Income Fund's past
performance is not necessarily an indication of how the Growth & Income Fund
will perform in the future.
RISK/RETURN
Annual returns - Calendar year Class A
- ------------------------------ --------
1/1/96-12/31/96 14.19%
1/1/97-12/31/97 12.27%
Year-to-date return ended 9/30/98 (10.61%)
Average Annual Returns Russell
through 12/31/97 Class A Class B 2000 Index 1<F30>
- ----------------------- ------- ------- ------------
One Year 12.27% 11.48% 22.36%
Since inception (9/1/95) 12.60% 11.71% 18.37%
Highest calendar quarter
return for Class A 8.95% Qtr. ended June 30, 1997
Lowest calendar quarter
return for Class A -13.13% Qtr. ended September 30, 1998
1<F30>The Russell 2000 Index is an unmanaged index of the 2000 smallest
securities in the Russell 3000 Index. Russell 3000 Index represents
approximately 98% of the U.S. Equity Market by capitalization.
FINANCIAL HIGHLIGHTS
JEFFERSON GROWTH AND INCOME FUND
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PERIOD THAT THE FUND HAS BEEN OPERATING. CERTAIN
INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE FUND SHARE. THE TOTAL
RETURNS IN THE TABLE REPRESENT THE RATE THAT AN INVESTOR WOULD HAVE EARNED ON AN
INVESTMENT IN THE FUND (ASSUMING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS). THIS INFORMATION FOR THE YEAR ENDED OCTOBER 31, 1997 HAS BEEN
AUDITED BY KPMG PEAT MARWICK, L.L.P., WHOSE REPORT, ALONG WITH THE FUND'S
FINANCIAL STATEMENTS, IS INCLUDED IN THE ANNUAL REPORT, WHICH IS AVAILABLE UPON
REQUEST. THE INFORMATION FOR PRIOR PERIODS WERE AUDITED BY COOPERS & LYBRAND,
L.L.P.
<TABLE>
September 1, 1995 1<F1>
Year ended Year ended through
October 31, 1997 October 31, 1996 October 31, 1995
------------------ ------------------ ------------------
Class A Class B Class A Class B Class A Class B
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period $10.91 $10.87 $10.04 $10.03 $10.00 $10.00
Income from investment operations:
Net investment income 0.29 0.20 0.27 0.21 0.04 0.03
Net realized and unrealized gains on securities 1.40 1.39 0.87 0.83 -- --
------ ------ ------ ------ ------ ------
Total from investment operations 1.69 1.59 1.14 1.04 0.04 0.03
Less distributions:
Dividends from net investment income (0.29) (0.21) (0.27) (0.20) -- --
Distributions from net realized gains (0.05) (0.05) -- -- -- --
------ ------ ------ ------ ------ ------
Total distributions (0.34) (0.26) (0.27) (0.20) -- --
------ ------ ------ ------ ------ ------
Net asset value, end of period $12.26 $12.20 $10.91 $10.87 $10.04 $10.03
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN2<F2> 15.56% 14.68% 11.50% 10.49% 0.40%3<F3> 0.30%3<F3>
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $6,815 $1,330 $4,688 $412 $1,279 $133
Ratio of net expenses to average net assets:
Before expense reimbursement 2.96% 3.71% 5.95% 6.70% 17.35%4<F4> 18.10%4<F4>
After expense reimbursement 1.15% 1.90% 1.15% 1.90% 1.15%4<F4> 1.90%4<F4>
Ratio of net investment income
to average net assets:
Before expense reimbursement 1.01% 0.26% (1.77%) (2.52%) (14.95%)4<F4>(15.70%)4<F4>
After expense reimbursement 2.82% 2.07% 3.03% 2.28% 1.25%4<F4> 0.50%4<F4>
Portfolio turnover rate 5<F5>, 6<F6> 98.37% 98.37% 131.98% 131.98% -- --
</TABLE>
1<F1> Commencement of operations.
2<F2> The total return calculation does not reflect the 5.5% front end sales
charge for Class A or the 5% CDSC on Class B.
3<F3> Not annualized.
4<F4> Annualized.
5<F5> During the period ended October 31, 1995, there were no sales of
securities.
6<F6> Portfolio turnover and average commission rate paid is calculated on the
basis of the Fund as a whole without distinguishing between classes of
shares issued.
FEE AND EXPENSE INFORMATION
THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU
BUY AND HOLD SHARES OF THE FUNDS.
FEES (ALL FUNDS)
SHAREHOLDER FEES CLASS A SHARES CLASS B SHARES
- ---------------------------------------------------------------------------
Maximum Sales Charge (Load)
Imposed on Purchases
(as a percentage of offering
price at time of purchase) 5.5% None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value
at time of purchase) None 5.0%
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends
(as a percentage of offering
price at time of purchase) None None
Redemption Fee1<F8>
(as a percentage of amount redeemed) None None
Exchange Fee2<F9> None None
1<F8> A fee of $12.00 is charged for each wire redemption.
2<F9> A fee of $5.00 is charged for each telephone exchange.
<TABLE>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Total Fund
Operating
Distribution Other Expenses Expenses (after
and/or Service (after expense expense
CLASS A SHARES Management Fees (12b-1) Fees3<F10> reimbursements)4<F11> reimbursements)5<F12>
<S> <C> <C> <C> <C>
Growth and Income Fund .60% .25% .30% 1.15%
Regional Bank Fund .60% .25% .30% 1.15%
REIT Fund .60% .25% .30% 1.15%
CLASS B SHARES
Growth and Income Fund .60% 1.00% .30% 1.90%
Regional Bank Fund .60% 1.00% .30% 1.90%
REIT Fund .60% 1.00% .30% 1.90%
</TABLE>
3<F10> 12b-1 Fees which are less than or equal to .25% represent servicing
fees, and the remaining portion represents distribution fees.
4<F11> Other expenses for the Growth and Income Fund are based on amounts for
the fiscal year ended October 31, 1998 and reflect expense
reimbursements. Without such reimbursements, other expenses of both
Class A and Class B shares of the Growth and Income Fund would have
been %. Other expenses for the Regional Bank Fund and the REIT
Fund are based on estimates for the fiscal year ending October 31, 1999
and reflect expense reimbursements. Without such reimbursements, other
expenses of both Class A and Class B shares of the Regional Bank Fund
and the REIT Fund are expected to be % and %, respectively.
5<F12> Total expenses for the Growth and Income Fund are based on amounts for
the fiscal year ended October 31, 1998 and reflect expense
reimbursements. Without expense reimbursements, the total fund
operating expenses of Class A and Class B shares of the Growth and
Income Fund would have been % and %, respectively. Total
expenses for the Regional Bank Fund and the REIT Fund are based on
estimates for the fiscal year ending October 31, 1999 and reflect
expense reimbursements. Without expense reimbursements, the total fund
operating expenses of Class A and Class B shares of each of the
Regional Bank Fund and the REIT Fund are expected to be % and
%, respectively
Example. This Example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the applicable Fund for the
time periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each
year and that the Funds' operating expenses remain the same. This hypothetical
rate of return is not intended to be representative of past or future
performance of the Fund. Although your actual costs may be higher or lower,
based on these assumptions your costs for each Fund would be:
CLASS A SHARES
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------- ------- ---------
Growth and Income Fund $660 $900 $1150 $1870
Regional Bank Fund $660 $900 $1150 $1870
REIT Fund $660 $900 $1150 $1870
CLASS B SHARES
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------- ------- ---------
Growth and Income Fund $690 $1000 $1330 $2220
Regional Bank Fund $690 $1000 $1330 $2220
REIT Fund $690 $1000 $1330 $2220
Because the Fund imposes a 12b-1 distribution fee on Class B shares, a Class
B shareholder of a 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.
INVESTMENT OBJECTIVES AND POLICIES
JEFFERSON GROWTH AND INCOME FUND
The investment objectives of the Growth and Income Fund are to produce long-
term capital appreciation and current income principally through investing in
equity securities. Most of the time the Fund will invest more than 50% of the
Fund's portfolio in equity securities. Equity securities include common stocks,
preferred stocks, rights or warrants to purchase common stocks and securities
convertible into common stock. Under normal market conditions the Fund will
invest the remaining portion of its assets in non-convertible debt securities,
including short-term money market instruments and U.S. Government and agency
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. Under unusual conditions,
for temporary defensive purposes, the Fund may invest 100% of its assets in non-
convertible debt securities. The Growth and Income Fund is a "diversified"
fund, that is, the law limits the proportion of the Fund's assets that may be
invested in the securities of a single issuer.
When selecting investments, Uniplan will consider various financial
characteristics of the issuer, including historical sales and net income,
debt/equity and price/earnings ratios and book value. Uniplan will usually
place an emphasis on issuers with favorable credit and earnings characteristics.
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.
Non-Convertible Debt Securities. The Growth and Income Fund will generally
limit its investments in non-convertible investment grade and non-investment
grade 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 Uniplan to be of
comparable quality). A Moody's rating of B (or an S&P rating of B) is the sixth
highest rating. Securities rated in the fifth and sixth highest rating
categories or below are not considered to be of investment grade and are called
"High Yield Securities," commonly known as "junk bonds."
For a description of other investments the Growth and Income Fund may make,
see the section entitled "Additional Investments Used by the Funds," below.
JEFFERSON REGIONAL BANK FUND
The Regional Bank Fund primarily seeks long-term capital appreciation; a
secondary objective is income. Normally the Fund will invest at least 65% of
its total assets in equity securities of (i) national and state-chartered banks
(other than money center banks), (ii) thrifts, (iii) the holding or parent
companies of such banks and thrifts, and (iv) in savings accounts of mutual
thrifts. Marshall Capital selects these securities primarily on the basis of
fundamental investment value and potential for future growth. Marshall Capital
evaluates each depository institution which is a potential investment by the
Fund.
Marshall Capital believes that a number of factors may contribute to the
potential for growth in the value of equity securities of depository
institutions, including the fact that such depository institutions are (1)
located in geographic regions experiencing strong economic growth and able to
participate in such growth; (2) well-managed and currently providing above-
average returns on assets and shareholders' equity; (3) attractive candidates
for acquisition by a money center bank or another regional bank, or attractive
partners for business combinations, as a result of opportunities created by the
trend towards deregulation and interstate banking or in order to create larger,
more efficient banking combinations; (4) expanding their business into new
financial services or geographic areas that have become or may become
permissible due to an easing of regulatory constraints; or (5) investing assets
in technology that is intended to increase productivity.
Marshall Capital also believes that a number of factors may contribute to
increased earnings of securities of depository institutions, including the
following: (1) changes in the sources of revenues of banks, such as the
implementation of certain new transaction-based fees; (2) a focus on variable
rate pricing of bank products, which is less sensitive than fixed pricing to
cyclical interest rate changes; (3) the ability, as a result of liberalization
of regulation, to offer financial products and services which may have a higher
rate of return than traditional banking and financial services products; (4) the
recent implementation of share repurchase programs by certain banks; or (5) a
trend towards increased savings and investing as the average age of the
population of the United States gets older.
The Regional Bank Fund will normally invest the remaining 35% of its total
assets in the equity and non-convertible debt securities of money center banks,
other financial services companies and other issuers deemed suitable by Marshall
Capital. If an unusual degree of financial unsteadiness or risk exists in the
banking and related industries, the Fund may invest more than 35% and as much as
100% of its total assets in short-term debt securities, including short-term
money market instruments and U.S. government and agency securities. This would
prevent the fund from pursuing its usual investment objectives. The Regional
Bank Fund is a "diversified" fund, that is, the law limits the proportion of the
Fund's assets that may be invested in the securities of a single issuer.
Non-Convertible Debt Securities. The Regional Bank Fund will generally limit
its investments in non-convertible investment and non-investment grade debt
securities to those which have been assigned one of the six highest ratings of
either S&P or Moody's (or unrated but determined by Marshall Capital to be of
comparable quality). A Moody's rating of B (or an S&P rating of B) is the sixth
highest rating. Securities rated in the fifth and sixth highest rating
categories or below are not considered to be of investment grade and are called
"High Yield Securities," commonly known as "junk bonds."
For a description of other investments the Regional Bank Fund may make, see
the section entitled "Additional Investments Used by the Funds," below.
JEFFERSON REIT FUND
The REIT Fund's investment objective is to achieve high current income
through investment in real estate securities. Capital appreciation is a
secondary objective. The Fund will normally invest at least 65% of its total
assets in the equity securities of real estate companies.
For purposes of the REIT Fund's investment policies, a "real estate company"
is one that derives at least 50% of its revenues from the ownership,
construction, financing, management or sale of commercial, industrial or
residential real estate or that has at least 50% of its assets in such real
estate. With the exception of REITs, most real estate companies do not pay
dividends at the higher end of the range for common stocks as a group. Uniplan,
however, anticipates that the Fund's equity investments in real estate companies
will primarily be in securities that do pay high dividends relative to the stock
market as a whole.
REITs are sometimes informally characterized as equity REITs, mortgage REITs
and hybrid REITs. An equity REIT invests primarily in the fee ownership or
leasehold ownership of land and buildings and derives its income primarily from
rental income. An equity REIT may also realize capital gains (or losses) by
selling real estate properties in its portfolio that have appreciated (or
depreciated) in value. A mortgage REIT invests primarily in mortgages on real
estate, which may secure construction, development or long-term loans. A
mortgage REIT generally derives its income primarily from interest payments on
the credit it has extended. A hybrid REIT combines the characteristics of
equity REITs and mortgage REITs, generally by holding both ownership interests
and mortgage interests in real estate. It is anticipated, although not
required, that under normal circumstances a majority of the Fund's investments
in REITs will consist of securities issued by equity REITs.
Prior to Uniplan selecting specific investments for the REIT Fund, Uniplan
generally tracks real estate supply and demand across the United States by
dividing the country into eight geographic regions. Within each region, Uniplan
compiles statistics on supply and demand factors including: (1) vacancy rate by
property type, (2) visible supply of property based on building permits, (3)
regional population and job growth, and (4) trends in rental and cap rates.
Uniplan uses the results of this analysis to detect cyclical inflection points
in the supply-demand equation. Using this information, Uniplan then determines
which property types within each region have the most favorable characteristics
in order to determine the appropriate investments for the REIT Fund.
The REIT Fund may invest up to 35% of the Fund's total assets in debt
securities issued or guaranteed by real estate companies. When, in the judgment
of Uniplan, market or general economic conditions justify a temporary defensive
position, the Fund may deviate from its investment objectives and policies and
invest all or any portion of its assets in high-grade debt securities, including
corporate debt securities, U.S. government securities, and short-term money
market instruments, without regard to whether the issuer is a real estate
company.
Non-Convertible Debt Securities. The REIT Fund will generally limit its
investments in non-convertible investment and non-investment grade debt
securities to those which have been assigned one of the six highest ratings of
either S&P or Moody's (or unrated but determined by Uniplan to be of comparable
quality). A Moody's rating of B (or an S&P rating of B) is the sixth highest
rating. Securities rated in the fifth and sixth highest rating categories or
below are not considered to be of investment grade and are called "High Yield
Securities," commonly known as "junk bonds."
For a description of other investments the REIT Fund may make, see the
section entitled "Additional Investments Used by the Funds," below.
ADDITIONAL INVESTMENTS USED BY THE FUNDS
Convertible Securities. Each of the Funds may invest in convertible
securities. The investment adviser for a Fund will select convertible
securities to be purchased by that 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.
Money Market Instruments. Each of the Funds may invest in money market
instruments in which the Growth and Income 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 investment adviser for a Fund will monitor the creditworthiness of
the issuer of the commercial paper master notes purchased by that Fund.
Repurchase Agreements. 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. None of the Funds will enter into repurchase agreements
with entities other than banks or registered broker-dealers or invest over 25%
of their respective net assets in repurchase agreements, except that no such
limit applies when a 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, a 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 a Fund. In
such event, a 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.
Lending of Securities. Each of the Funds may lend their 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. A 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 Growth and Income
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. A Fund will normally pay lending fees to the broker-dealer
arranging the loan.
Other Securities Transactions. Each of the Funds may purchase securities
which they are 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. No income accrues to the purchaser of
such securities prior to delivery.
American Depository Receipts. Each of the Funds may invest in American
Depository Receipts ("ADRs") of foreign issuers. The Funds limit investments in
American Depository Receipts of foreign issuers to 25% of their respective
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 a Fund's income
without providing a tax credit for the Fund's stockholders. Although each of
the Funds intend to invest in ADRs of foreign issuers domiciled in nations which
that Fund's investment adviser consider 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.
Futures. The Funds 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 Funds
will use financial futures contracts and related options only for "bona fide
hedging" purposes, as such term is defined in applicable regulations of the
Commodity Futures Trading Commission, 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 a Fund's total assets.
Options. As described below each of the Funds may purchase or sell put and
call options under certain circumstances. An option on a security is a contract
that gives the purchaser of the option, in return for the premium paid, the
right to buy a specified security (in the case of a call option) or to sell a
specified security (in the case of a put option) from or to the writer of the
option at a designated price during the term of the option. An option on a
stock index gives the purchaser of the option, in return for the premium paid,
the right to receive from the seller cash equal to the difference between the
closing price of the index and the exercise price of the option.
A Fund may purchase put options on securities to protect holdings in an
underlying or related security against a substantial decline in market value. A
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. A 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.
A Fund may write a call or put option only if the option is "covered." This
means that, so long as the Fund is obligated as the writer of a call option, it
will own the underlying securities subject to the call, or hold a call at the
same or lower exercise price, for the same exercise period, and on the same
securities as the written call. A put is covered if a Fund maintains collateral
consisting of cash or liquid portfolio securities with a value equal to the
exercise price in a segregated account, or holds a put on the same underlying
security at an equal or greater exercise price. The value of the underlying
securities on which options may be written at any one time will not exceed 25%
of the total assets of a Fund. A Fund will not purchase put or call options if
the aggregate premium paid for such options would exceed 5% of its total assets
at the time of purchase.
Other Transactions. Under certain circumstances the Funds may (a) invest in
warrants, (b) temporarily borrow money from banks for emergency or extraordinary
borrowings, (c) pledge their assets to secure borrowings, and (d) purchase
securities of other investment companies.
A more complete discussion of the circumstances in which the Funds may engage
in the above activities is included in the Statement of Additional Information.
ADDITIONAL RISK INFORMATION
RISKS COMMON TO THE FUNDS
High Yield Securities ("Junk Bonds"). Investments in securities rated below
investment grade that are eligible for purchase by a Fund are described as
"speculative" by both Moody's and S&P. 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 a Fund's investment adviser to be of comparable quality to
obligations so rated. (At the end of this Prospectus you will find a
description of Moody's and S&P's ratings systems.) Investment in High Yield
Securities provides greater income and increased opportunity for capital
appreciation than investments in higher quality securities, but also typically
entails greater price volatility and principal and income risk. High Yield
Securities are 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 a Fund's net assets will be invested in debt
securities rated below investment grade (or unrated but determined by the Fund's
investment 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. (At the end of this Prospectus you will
find a description of Moody's and S&P's ratings systems.)
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 Funds 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 Funds may be
required to reinvest redemption or call proceeds during a period of relatively
low interest rates.
Short Sales Against the Box. The Funds may from time to time make short
sales "against the box." While a short sale is made by selling a security a 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 a 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.
Options and Futures Contracts. Options and futures contracts are forms of
derivatives. The use of options and futures as hedging techniques may not
succeed where the price movements of the securities underlying the options and
futures do not follow the price movements of the portfolio securities subject to
the hedge. Gains on investments in options and futures depend on the portfolio
manager's ability to predict correctly the direction of stock prices, interest
rates and other economic factors. Where a liquid secondary market for options
or futures does not exist, a Fund may not be able to close its position and, in
such an event, would be unable to control its losses. The loss from investing
in futures contracts is potentially unlimited.
Fluctuation of Net Asset Value. Because the major portion of each Fund's
portfolio will normally be invested in equity securities, their net asset values
may be subject to greater fluctuation than a portfolio containing a substantial
amount of fixed-income securities.
Short-Term Trading. The Funds do not intend to place emphasis on short-term
trading profits. The Growth and Income Fund's and the Regional Bank Fund's
annual portfolio turnover rates generally are not expected to exceed 75%. As
stated above, under normal circumstances, the REIT Fund does not expect its
portfolio turnover rate to exceed 100%. However, the REIT Fund does not place
limits on the rate of portfolio turnover, and investments may be sold without
regard to length of time held. The annual portfolio turnover rate indicates
changes in a 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 a 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 a Fund from capital of above
average amounts of brokerage commissions and could generate higher than normal
short-term capital gains.
REIT-Specific Risks. In certain cases, the organizational documents of a
REIT may grant the REIT's sponsors the right to exercise control over the
operations of the REIT notwithstanding their minority share ownership; a
conflict of interest (for example, the desire to postpone certain taxable
events) could influence such sponsors to not act in the best interests of the
REIT's shareholders. Many REITs are subject in their organizational documents
to various anti-takeover provisions that could have the effect of delaying or
preventing a transaction or change in control of the REIT that might involve a
premium price for the REIT's shares or otherwise may not be in the best
interests of the REIT's shareholders. REITs depend generally on their ability
to generate cash flow to make distributions to shareholders, and certain REITs
have self-liquidation provisions by which mortgages held may be paid in full and
distributions of capital returns may be made at any time. In addition, the
performance of a REIT may be affected by changes in the tax laws or by its
failure to qualify for tax-free pass-through of income.
MANAGEMENT AND ORGANIZATION OF THE FUNDS
Uniplan, Inc. is the investment adviser for the Growth and Income Fund and
the REIT Fund. Marshall Capital is the investment adviser for the Regional Bank
Fund. Uniplan's address is 839 N. Jefferson Street, Milwaukee, Wisconsin 53202.
Marshall Capital's address is 135 S. LaSalle Street, Chicago, Illinois 60603.
Uniplan and Marshall Capital supervise and manage the investment portfolio of
their respective Funds. They also direct the purchase or sale of investment
securities in the day-to-day management of their Funds (subject to such policies
as the Trustees of each Fund may determine).
Uniplan and Marshall Capital also provide investment advice to individual and
institutional clients with substantial investment portfolios. As of December
31, 1997, Uniplan and its affiliates managed approximately $292 million in
assets. Uniplan has been in existence for over 13 years. Richard P. Imperiale
currently controls Uniplan and is primarily responsible for the day-to-day
management of the portfolios of the Funds managed by Uniplan. He has held this
responsibility since the Fund commenced operations. Mr. Imperiale also has
served as the Chairman, Secretary and a Trustee of the Growth and Income Fund
since it was organized.
As of December 31, 1998, Marshall Capital managed over $15 million in assets.
Marshall Capital has no prior experience in serving as an investment adviser to
an investment company; however, Marshall Capital and its affiliates have
selected securities for several unit investment trusts formed by Howe Barnes
Investments, Inc. Marshall Capital has been in existence for over 10 years.
Marshall Capital is wholly-owned by Howe Barnes Investments, Inc. Mr. is
currently responsible for the day-to-day management of the portfolios of the
Funds manages by Marshall Capital.
Uniplan and Marshall Capital, at their own expense and without reimbursement
from the Funds, furnish office space and all necessary office facilities,
equipment and executive personnel for making investment decisions for the Funds
each manages and maintaining their organization. Uniplan and Marshall Capital
also pay the salaries and fees of all officers and Trustees of the Funds each
manages (except the fees paid to disinterested directors or Trustees who are
affiliated with the distributor of Fund shares).
For their services connected to the Funds, Uniplan and Marshall Capital
receive an annual fee of .60% on the first $500,000,000 of average net assets,
.50% of the next $500,000,000 of average net assets and .40% of average net
assets in excess of $1,000,000,000 of each Fund for which they act as investment
adviser. In the most recent fiscal year, an aggregate fee of .60% of average
net assets was paid to Uniplan, as investment adviser for the Growth and Income
Fund. All of the above fees are paid monthly.
SHAREHOLDER INFORMATION
Purchase of Fund Shares. You may purchase Fund shares on any day the New
York Stock Exchange ("NYSE") is open for business. Each Fund offers and sells
two classes of Fund shares (Class A and Class B). The Distributor, which is the
principal underwriter of the Funds, continuously offers Fund shares for sale.
The Distributor also sells Fund shares 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").
The price per share (the offering price) will be the net asset value per
share ("NAV") next determined after your purchase order is received by the
Distributor, plus a sales charge. Each Fund calculates NAV by (1) taking the
current market value of the Fund's total assets, (2) subtracting the liabilities
of that Fund, and (3) dividing the resulting amount by the total number of
shares owned by shareholders.
All the Funds determine net asset value each business day as of the close of
regular trading (typically 4:00 p.m. Eastern Time) on the NYSE on each day the
NYSE is open for trading. The Funds will not price their shares on any national
holidays or other days on which the NYSE is closed for trading.
You may choose to pay the sales charge 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 A shares, less the
applicable sales charge, are invested at the net asset value next determined
after acceptance of the trade. Purchase payments for Class B shares are fully
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
described below, the minimum initial investment in each 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. No
share certificates will be issued.
You can purchase Fund shares either (1) through your broker or dealer which
has a dealer agreement with the Distributor or (2) by mailing an Account
Application with payment, as described below, to Firstar Mutual Fund Services,
LLC, which is the transfer agent for the Funds (if no dealer is named in the
application, the Distributor may act as dealer).
Direct Investment. If you want to invest in a Fund directly, instead of
through a participating broker, you may do so by completing the Account
Application included with this Prospectus. If you open a direct account with a
Fund you 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.
Purchase by Mail. If you want to invest directly, please send a completed
application form to:
The Jefferson Fund Group Trust
c/o Firstar Mutual Fund Services, LLC
Mutual Fund Services, 3rd 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 Mutual Fund Services, LLC
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 Mutual Fund Services, LLC will
charge a $20 fee against a shareholder's account for any payment check returned
to the custodian. You will also be responsible for any loss suffered by a Fund
as a result.
All 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 -
[Name of Fund]
[Your account number and title of account, if known]
Before establishing a new account or any additional purchases for an
existing account by wire transfer, you should call Firstar Mutual Fund Services,
LLC 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 a Fund, and
are not binding until so accepted. The Funds reserve the right to reject
applications in whole or part.
Subsequent Purchases of Shares. You can make subsequent purchases 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
your account with a Fund by means of automatic transfers of a designated amount
from your bank account. Investments may be made monthly, on the business day of
your 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. (Fund Link does not apply to shares held in broker "street name"
accounts.) Fund Link connects your Fund account with a bank account. Fund Link
may be used for subsequent purchases and for redemption and other transactions.
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. You may use Fund Link to make
subsequent purchases of shares in amounts from $100 to $10,000.
To initiate Fund Link purchases, call (800) 216-9785. A Fund may accept
telephone instructions from any person identifying himself as the owner of an
account. A 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.
A 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 Firstar Mutual Fund
Services, LLC. Shares will be purchased on the regular business day Firstar
Mutual Fund Services, LLC 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. Such privileges apply to each shareholder of record for the account
unless and until Firstar Mutual Fund Services, LLC receives written instructions
from a shareholder of record canceling 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. Firstar
Mutual Fund Services, LLC and a 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.
Changes in Registration and Account Privileges. Changes in registration or
account privileges may be made in writing to Firstar Mutual Fund Services, LLC.
Signature guarantees may be required.
Correspondence. All correspondence must include the account number and must
be sent to:
The Jefferson Fund Group Trust
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Overnight or express mail should be directed to:
The Jefferson Fund Group Trust
c/o Firstar Mutual Fund Services, LLC
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202
TDD Service. Firstar Mutual Fund Services, LLC, the transfer agent, offers
Telecommunication Device for the Deaf (TDD) services for hearing impaired
shareholders. The dedicated number for this service is (800) 684-3416.
Alternative Purchase Arrangements. The alternative purchase agreements
offered by the Funds enable you to choose the method of purchasing Fund shares
that is most beneficial given the amount of the intended purchase, the length of
time you expect to hold the shares and other considerations. You 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.
For example, 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 Fund 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 Fund 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.
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.
Sales Discount or
Sales Charge Commission
Charge as % to Dealers
as % of the as % of
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<F15> 0%1<F15> 0.25%1<F15>
1 <F15> The Distributor will pay a 0.25% commission to dealers who sell amounts
of $1,000,000 or more of a 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."
A 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. 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 the
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.
Combined Purchase Privilege. Investors may qualify for a reduced sales
charge by combining purchases of the Class A shares of a 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 is 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 a 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 (800) 216-9785 or your broker.
Cumulative Quantity Discount (Right of Accumulation). A purchase of
additional Class A shares of a 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 a 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 a Fund worth $25,000 and wished
to purchase Class A shares of that 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 3.50% 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. You 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 a 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 your option, a Letter of Intent may
include purchases of Class A shares of a 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 a 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 wanting 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 Funds may sell their Class A shares at net
asset value without a sales charge: (1) to any Trustee or officer of a 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 Uniplan or
Marshall Capital (or any affiliate thereof) or any sub-adviser hired by Uniplan,
Marshall Capital or 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 Uniplan, Marshall
Capital 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 Uniplan, Marshall Capital or the
Distributor and/or their corporate affiliates; (8) to any employee or agent who
retires from Uniplan, Marshall Capital or the Distributor and/or a corporate
affiliate of Uniplan, Marshall Capital 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 a 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 Fund 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 a 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 a 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 an amount
is being redeemed and the date such purchase payment was made. Purchases are
subject to the CDSC according to the following schedule:
Percentage
Year Since Contingent
Purchase Payment Deferred
Was Made 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 illustrates 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 a 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, Uniplan and Marshall Capital and
their corporate affiliates; (vii) redemptions effected pursuant to a 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 a 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.
REDEMPTION
You may redeem Fund shares through a participating broker, by telephone, by
submitting a written redemption request directly to Firstar Mutual Fund
Services, LLC (for non-broker accounts) or through Fund Link.
You may be charged a CDSC if you redeem Class B shares. Your shares will be
redeemed at their net asset value next determined after a proper redemption
request has been received, minus any applicable CDSC. You will not be charged
by the Distributor (other than applicable CDSC) for a 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 Firstar Mutual Fund Services, LLC 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 Firstar Mutual Fund Services, LLC. 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 Fund shares in writing a shareholder must send the
following items to: The Jefferson Fund Group Trust, c/o Firstar Mutual Fund
Services, LLC, 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 Firstar Mutual Fund Services, LLC's records, including fiduciary
titles, if any, and specifying the account number and the dollar amount or
number of Fund shares to be redeemed; (2) for certain redemptions described
below, a guarantee of all signatures on the written request; and (3) any
additional documents which may be required by Firstar Mutual Fund Services, LLC
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 Mutual Fund Services, LLC, 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 Firstar Mutual Fund Services, LLC in
writing or by calling (800) 216-9785 before submitting a request. If a
redemption request is inadvertently sent to a Fund, it will be promptly
forwarded to Firstar Mutual Fund Services, LLC, but the effective date of
redemption will be delayed until the request is received by Firstar Mutual Fund
Services, LLC. 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
Firstar Mutual Fund Services, LLC.
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 Firstar Mutual Fund Services, LLC'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 Funds accept 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. 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 Funds, the
Distributor and Firstar Mutual Fund Services, LLC shall not be liable for any
loss incurred by the investor by reason of a Fund accepting unauthorized
telephone redemption requests for his account if a Fund reasonably believes the
instructions to be genuine. Thus, you risk possible losses in the event of a
telephone redemption not authorized by you. The Funds 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 Funds 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 Funds 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 Firstar Mutual Fund
Services, LLC at (800) 216-9785 and state (i) the name of the shareholder as it
appears on Firstar Mutual Fund Services, LLC's records, (ii) his or her 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 Funds reserve 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 Firstar Mutual Fund
Services, LLC.
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 Firstar Mutual Fund
Services, LLC. To use Fund Link for redemptions, call Firstar Mutual Fund
Services, LLC at (800) 216-9785. Subject to the limitations set forth above
under "Telephone Redemptions," the Distributor, the Funds and Firstar Mutual
Fund Services, LLC 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 Firstar Mutual Fund Services, LLC 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. 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 Firstar Mutual Fund Services, LLC
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. Firstar Mutual Fund
Services, LLC currently charges a $12.00 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 Mutual Fund Services, LLC, 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 Mutual Fund Services,
LLC, Mutual Fund Services, 3rd Floor, 615 East Michigan Street, Milwaukee,
Wisconsin 53202.
Systematic Withdrawal Plan. An investor who owns or buys shares of a 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 shareholder of record or to an address other than the
address of record, a signature guarantee is required. Shares of either class of
the Funds 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.
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 a 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 Funds 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 a Fund as an expense of all shareholders. The Funds 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 Funds and the Distributor make no recommendations or
representations in this regard.
EXCHANGE PRIVILEGE
A shareholder may, without charge, exchange Class A and Class B shares of any
Fund for shares of any other Fund within the same class on the basis of their
respective net asset values. In addition, a shareholder of a Fund may, without
charge, exchange at net asset value any or all of an investment in one Fund for
shares of the Firstar Money Market Fund (the "Money Market Fund"). This
Exchange Privilege is a convenient way for shareholders to buy shares in another
Fund or a money market fund in order to respond to changes in their goals or
market conditions. Before exchanging into the Money Market Fund, read its
prospectus. To obtain the Money Market Fund prospectus and the necessary
exchange authorization forms, call Firstar Mutual Fund Services, LLC at (800)
216-9785. There is no charge for exchange transactions which are requested by
mail. Firstar Mutual Fund Services, LLC may charge a $5.00 fee for each
telephone exchange which will be deducted from the investor's account from which
the funds are being withdrawn prior to effecting the exchange. Use of the
Exchange Privilege is subject to the minimum purchase and redemption amounts set
forth in this Prospectus and in the Prospectus for the Money Market Fund.
This Exchange Privilege also permits shareholders of a Fund to make regular
investments in an existing account with that Fund by redeeming shares from their
Money Market Fund account. There is no charge for this service, but sales
charges or CDSC may apply. These transactions must meet the minimum purchase
amounts described herein for automatic investments.
For purposes of the Exchange Privilege, exchanges into and out of the Money
Market Fund will be treated as the same Class of shares owned of applicable
Jefferson Fund. For example, if an investor who owned Class A shares of the
Growth and Income Fund moved an investment from the Fund to the Money Market
Fund and then decided at a later date to move the investment back to the Fund,
he or she would be deemed, once again, to own Class A shares of the Fund and may
do so without the imposition of any additional sales charges, so long as the
investment has been continuously invested in shares of the Money Market Fund
during the period between withdrawal and re-investment. In addition, if an
investor owned Class B shares of the Growth and Income Fund and exchanged those
shares into the Money Market Fund, the CDSC would not be paid at the time of the
exchange. Instead, the shares of the Money Market Fund would be deemed "Class B
shares" for the purpose of determining the applicable holding period for payment
of the CDSC, and for purposes of assessing the CDSC payable upon the sale of the
exchanged shares, the holding period of the shares exchanged into the Money
Market Fund will be added to the holding period of the original Class B shares.
For example, suppose an investor purchased 100 Class B shares on January 1, 1998
and exchanged those shares into the Money Market Fund on June 1, 1998. Suppose
further that the shareholder exchanged those same shares back into the Fund on
February 1, 1999. For purposes of calculating the CDSC holding period as of
February 1, 1999, the shareholder can include both the eight months in which he
was a shareholder of the Money Market Fund as well as the five months in which
he was a shareholder of the Growth and Income Fund. Thus, if the shareholder
sold the 100 Class B shares on February 2, 1999, he would pay the CDSC
applicable to shareholders that have held their shares for more than one year.
With respect to Class B shares subject to a CDSC, if less than all of an
investment is exchanged out of a Fund, shares subject to the lowest CDSC will be
the first to be exchanged. In this regard, 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 earlier investment made in the Fund. Shareholders
should take into account the effect of any exchange on the applicability of any
CDSC that may be imposed upon any subsequent redemption.
All accounts opened as a result of using the exchange privilege must be
registered in the same name and taxpayer identification number as a
shareholder's existing account with a Fund. Remember that each exchange
represents the sale of shares of one fund and the purchase of shares of another.
Therefore, shareholders may realize a taxable gain or loss on the transaction.
Before making an exchange request, an investor should consult a tax or other
financial adviser to determine the tax consequences of a particular exchange.
The Distributor is entitled to receive a fee from the Money Market Fund for
certain support services at the annual rate of .02 of 1% of the average daily
net asset value of the shares for which it is the holder or dealer of record.
Because excessive trading can hurt a Fund's performance and shareholders, a Fund
reserves the right to temporarily or permanently limit the number of exchanges
or to otherwise prohibit or restrict shareholders from using the exchange
privilege at any time, without notice to shareholders. In particular, a pattern
of exchanges with a "market timing" strategy may be disruptive to a Fund and may
thus be restricted or refused. Each of the Funds also believe that excessive
use of the exchange privilege is more than five exchanges per calendar year.
The restriction or termination of the exchange privilege does not affect the
rights of shareholders to redeem shares.
The Money Market Fund is managed by Firstar Investment Research and
Management Company, an affiliate of Firstar Mutual Fund Services, LLC. The
Firstar Funds, including the Money Market Fund, are unrelated to the Jefferson
Fund Group Trust.
DIVIDENDS
Class A vs. Class B Dividends. Dividends paid in cash by each Fund with
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.
Dividend Reinvestment. Fund 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.
If a Fund 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 Fund
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.
A shareholder may change an election at any time by notifying a 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. A
Fund may modify or terminate its dividend reinvestment program at any time on
thirty days' written notice to participants.
TAX CONSEQUENCES
The following is a summary of some important tax issues that affect the Funds
and their shareholders. The summary is based on current tax laws, which may be
changed by legislative, judicial or administrative action. The following does
not present a detailed explanation of the tax treatment of the Fund, or of the
tax consequences of an investment in the Funds. MORE INFORMATION ABOUT TAXES IS
LOCATED IN THE STATEMENT OF ADDITIONAL INFORMATION. YOU SHOULD CONSULT YOUR TAX
ADVISOR REGARDING SPECIFIC QUESTIONS AS TO FEDERAL, STATE AND LOCAL INCOME
TAXES.
Tax Status of the Funds. The Funds are treated as entities separate from
each other and from the Trust for tax purposes. Each Fund intends to qualify
for the special tax treatment given to regulated investment companies. As long
as a Fund qualifies as a regulated investment company, it pays no federal income
tax on the earnings it distributes to shareholders.
Tax Status of Distributions. The Funds will distribute to their shareholders
substantially all of their income. Currently, each Fund declares and pays
dividends quarterly and distributes capital gains annually. THE INCOME
DIVIDENDS YOU RECEIVE FROM A FUND WILL BE TAXED AS ORDINARY INCOME WHETHER YOU
RECEIVE THE DIVIDENDS IN CASH OR IN ADDITIONAL SHARES. Shareholders will be
notified annually as to the federal tax status of dividends and distributions.
Corporate shareholders may be entitled to a dividends-received deduction for the
portion of dividends they receive which are attributable to dividends received
by a Fund from U.S. corporations.
Capital gains distributions will result from gains on the sale or exchange of
capital assets held for more than one year, and will be taxed at different rates
depending on how long a Fund held the assets. Distributions paid in one year by
a Fund but declared by the Fund in the previous year may be taxable to you in
the previous year.
Tax Status of Share Transactions. Each sale, exchange or redemption of Fund
shares is a taxable event to you. You should consider the tax consequences of
any redemption or exchange before making such a request, especially with respect
to redemptions, if you invest in the fund through tax-qualified retirement plan.
State Tax Considerations. The Funds are not liable for any income or
franchise tax in Delaware as long as they qualify as regulated investment
companies for Federal income tax purposes. Distributions by a Fund may be
subject to state and local taxation. You should verify your tax eligibility
with your tax advisor.
Unique Tax Considerations for the REIT Fund. The REIT Fund may invest in
real estate investment trusts ("REITs") that hold residual interests in real
estate mortgage investment conduits ("REMICs"). Under existing Treasury
regulations, a portion of the Fund's income from a REIT that is attributable to
the REIT's residual interest in a REMIC (referred to in the Code as an "excess
inclusion") will be subject to federal income tax in all events. These
regulations are also expected to provide that excess inclusion income of a
regulated investment company, such as the Fund, will be allocated to
shareholders of the regulated investment company in proportion to the dividends
received by such shareholders, with the same consequences as if the shareholders
held the related REMIC residual interest directly. In general, excess inclusion
income allocated to shareholders (i) cannot be offset by net operating losses
(subject to a limited exception for certain thrift institutions), (ii) will
constitute unrelated business taxable income to entities (including a qualified
pension plan, an individual retirement account, a 401(k) plan, a Keogh plan or
other tax-exempt entity) subject to tax on unrelated business income, thereby
potentially requiring such an entity that is allocated excess inclusion income,
and otherwise might not be required to file a tax return, to file a tax return
and pay tax on such income, and (iii) in the case of a foreign shareholder, will
not qualify for any reduction in U.S. federal withholding tax. In addition, if
at any time during any taxable year a "disqualified organization" (as defined in
the Code) is a record holder of a share in a regulated investment company, then
the regulated investment company will be subject to a tax equal to that portion
of its excess inclusion income for the taxable year that is allocable to the
disqualified organization, multiplied by the highest federal income tax rate
imposed on corporations. Uniplan does not intend to invest Fund assets in REITs
that mostly hold residual interests in REMICs.
DISTRIBUTION ARRANGEMENTS
Adviser Dealer Services, Inc. (the "Distributor) is the distributor and
principal underwriter for both Class A and Class B shares of each Fund. In that
capacity, the Distributor pays money owed to participating brokers, pays
servicing fees and pays various other promotional and sales-related expenses,
including the cost of printing and mailing prospectuses to persons other than
shareholders.
Class A Servicing Fees. Each Fund pays the Distributor annual servicing fees
of up to .25% of the Fund's average daily net assets attributable to Class A
shares.
Class B Distribution and Servicing Fees. Each Fund pays the Distributor
annual distribution and servicing fees of up to .75% and .25%, respectively, of
the Fund's average daily net assets attributable to Class B shares.
The Distributor is permitted to spend the distribution fee applicable to
Class B shares on any activities or expenses primarily intended to result in the
sale of Class B shares of a Fund. Such activities and expenses include
compensation and reimbursement of expenses for financial consultants, other
employees of the Distributor or participating or introducing brokers who engage
in distribution of Class B shares. They also include infrastructure expenses
such as printing of prospectuses and reports for other than existing Class B
shareholders, advertising and preparation, and printing and distribution of
sales literature.
The Distributor is permitted to spend the servicing fee, applicable to both
Class A and Class B shares of the Funds, on personal services rendered to
shareholders of the Funds and the maintenance of shareholder accounts. Such
expenses include compensation and reimbursement of financial consultants or
other employees of the Distributor or of participating or introducing brokers
who aid the Funds. The Distributor may also spend such fees on interest
relating to unreimbursed distribution or servicing expenses from prior years.
The Distributor is also permitted to 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 Funds. The Distributor
currently expects that such additional bonuses or incentives will not exceed
.25% of the amount of any sale.
Howe Barnes Investments, Inc., an affiliate of Marshall Capital, has agreed
that in the event that the Distributor does not reimburse each of the Funds for
expenses that exceed 1.15% of a Fund's average net assets for Class A shares and
1.90% of a Fund's average net assets for Class B share, it will voluntarily
reimburse the respective Fund in the event that expenses exceed the above
amounts.
RETIREMENT PLANS
The Funds offer the following retirement plans that may be funded with
purchases of Fund 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 Funds offer the Traditional IRA, the Roth IRA and the
Education IRA. 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.
Simplified Employee Pension Plan ("SEP/IRA"). The Funds also offer a
prototype SEP/IRA for employers, including self-employed individuals, who wish
to purchase shares with tax-deductible contributions. 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 Fund shares with tax-deductible contributions.
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.
A description of applicable service fees and certain limitations on
contributions and withdrawals, as well as application forms, are available from
the Funds 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.
HISTORICAL PERFORMANCE DATA RELATING TO
THE REIT FUND
Below is historical performance data relating to Uniplan, in order to show
Uniplan's past performance in managing portfolios similar to the REIT Fund. The
officer of Uniplan responsible for managing the investments described below is
the officer responsible for managing the investment portfolio of the REIT 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 Uniplan,
but do reflect all of Uniplan's assets under management with investment
objectives similar to the REIT 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 necessarily identical, investment strategies
and techniques as those contemplated for use by the REIT Fund. All performance
data is historical and investors should not consider this performance data as an
indication of future performance of the REIT Fund or the results an individual
investor might achieve by investing in the REIT 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 Uniplan. The annual management fees and other expenses of each of Uniplan'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 REIT Fund are
expected to be 1.15% and 1.90%, respectively. All information presented is
based on data supplied by Uniplan or from statistical services, reports or other
sources believed by Uniplan to be reliable, in accordance with standards
established by the Association for Investment Management and Research. Investors
should also be aware that other performance calculation methods may produce
different results, and that comparison of investment results should consider
qualitative circumstances and should be made only for portfolios with generally
similar investment objectives.
ANNUAL RATES OF RETURN
UNIPLAN REIT PROTFOLIO(1)<F16> NAREIT EQUITY INDEX(2)<F17>
(FOR THE PERIOD (FOR THE PERIOD
YEAR ENDING DECEMBER 31) ENDING DECEMBER 31)
- ----- ------------------------ ------------------------
1989 12.75% 8.84%
1990 -9.88% -15.35%
1991 38.71% 35.70%
1992 15.48% 14.59%
1993 31.13% 19.65%
1994 3.83% 3.17%
1995 15.58% 15.27%
1996 37.44% 35.27%
1997 23.25% 20.26%
1<F16> 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 critieria require the presentation of at least a ten year
performance record or performance for the period since inception, if
shorter.
2<F17> NAREIT is a registered trademark of The National Association of Real
Estate Investment Trusts. The NAREIT Equity Index is a captialization
weighted index of all tax-qualified REITS listed on the New York Stock
Exchange, American Stock Exchange and the NASDAQ National Market System
which have at least 75% of their gross invested book assets invested
directly or indirectly in the equity ownership of real estate.
COMPOUNDED ANNUAL RATES OF RETURN FOR THE PERIOD ENDING DECEMBER 31, 1997
YEARS UNIPLAN REIT PORTFOLIO NAREIT EQUITY INDEX
- ----------- ---------------------- --------------------
One Year 23.25% 20.26%
Three Years 25.10% 23.31%
Five Years 21.66% 18.28%
Seven Years 23.04% 17.65%
Inception 17.71% 14.25%
DESCRIPTION OF SECURITIES RATINGS
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,
in as much 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.
This Prospectus does not set forth all of the information included in the
Registration Statement and Exhibits thereto which the Trust has filed with the
Securities and Exchange Commission. A Statement of Additional Information (the
"SAI"), dated , 1998, contains additional information about the
Funds. The SAI has been filed with the Securities and Exchange Commission
("SEC") and is incorporated by reference into this Prospectus and, therefore,
legally forms a part of this Prospectus. The SEC maintains a Web site
("http://www.sec.gov") that contains the SAI. You may also review and copy
documents at the SEC Public Reference Room in Washington, D.C. (for information
call (800) SEC-0330). You may request documents by mail from the SEC, upon
payment of a duplication fee, by writing to: Securities and Exchange
Commission, Public Reference Section, Washington, D.C. 20549-6009.
Additional information about a Fund's investments is available in that Fund's
annual and semi-annual reports to shareholders. In a Fund's annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected that Fund's performance during the last fiscal year.
Copies of the Statement of Additional Information and a Fund's annual and semi-
annual reports will be provided promptly without charge upon written or
telephone request. Written requests should be made by writing to: The
Jefferson Fund Group Trust, c/o Firstar Mutual Fund Services, LLC, 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 Mutual Fund
Services, LLC, Mutual Fund Services, 615 East Michigan Street, Milwaukee,
Wisconsin 53202), and telephone requests should be made by calling (800) 216-
9785. You should use the same address and telephone number for general
information requests and questions about individual accounts.
THE JEFFERSON FUND GROUP TRUST
STATEMENT OF ADDITIONAL INFORMATION
FOR THE FOLLOWING JEFFERSON FUNDS:
JEFFERSON GROWTH AND INCOME FUND
JEFFERSON REGIONAL BANK FUND
JEFFERSON REIT FUND
DATED , 1998
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, Jefferson Regional Bank Fund and Jefferson
REIT Fund, dated , 1998. Requests for copies of the Prospectus
should be made in writing to The Jefferson Fund Group Trust, c/o Firstar Mutual
Fund Services, LLC, Mutual Fund Services, P.O. Box 701, Milwaukee, Wisconsin
53201-0701, or by calling (800) 216-9785.
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 , 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.
The following financial statements are incorporated by reference to the
Jefferson Growth and Income Fund Annual Report dated October 31, 1997 (File No.
811-8958), as filed with the Securities and Exchange Commission on December 30,
1997:
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
Shareholders may obtain a copy of the Annual Report, without charge, by calling
1-800-216-9786.
TABLE OF CONTENTS
HISTORY OF THE JEFFERSON FUND GROUP TRUST 3
DESCRIPTION OF THE FUNDS, THEIR INVESTMENTS AND RISKS 3
MANAGEMENT OF THE FUNDS 16
SALES CHARGES 20
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS 21
EXCHANGE PRIVILEGE 22
INVESTMENT ADVISORY AND OTHER SERVICES 23
BROKERAGE ALLOCATION AND OTHER PRACTICES 29
CAPITAL STRUCTURE 31
PURCHASE, REDEMPTION AND PRICING OF SHARES 34
TAXATION OF THE FUNDS 35
CALCULATION OF PERFORMANCE DATA 36
OTHER INFORMATION 40
HISTORY OF THE JEFFERSON FUND GROUP TRUST
The Jefferson Fund Group Trust (the "Trust") was organized as a business
trust on January 20, 1995 under the laws of the state of Delaware.
DESCRIPTION OF THE FUNDS, THEIR INVESTMENTS AND RISKS
CLASSIFICATION OF THE TRUST AND THE FUNDS
The Trust is an open-end management investment company. The Trust currently
issues three series of its securities: the Jefferson Growth and Income Fund,
the Jefferson Regional Bank Fund, and the Jefferson REIT Fund (each a "Fund" and
together, the "Funds"). The Growth and Income Fund and the Regional Bank Fund
are diversified funds; that is, the law limits the proportion of those Funds'
assets that may be invested in the securities of a single issuer. The REIT
Fund is a non-diversified fund, that is, the law does not limit the proportion
of the Fund's assets that may be invested in the securities of a single issuer.
INVESTMENT STRATEGIES AND RISKS
The following is an expanded discussion of some of the investments which may
be used by the Funds. The securities and actions described below are in
addition to the securities and actions described in the Prospectus.
Restricted Securities/Illiquid Securities/Unseasoned Companies. A Fund may
invest a maximum of 10% of its net assets in restricted securities, other
illiquid securities and in securities of unseasoned companies. Restricted
securities are securities that are restricted from being sold to the public
without registration under the federal securities laws, and include securities
subject to resale under Rule 144A under the Securities Act of 1933. Illiquid
securities are securities which may not be disposed of in the ordinary course of
business within seven days, including repurchase agreements maturing in more
than seven days. Illiquid securities do not include securities subject to a
seven day put option or readily convertible into saleable securities.
Securities of unseasoned companies are equity securities of companies having a
record of less than three years of continuous operation.
Restricted securities may be sold only in privately negotiated transactions,
in a registered public offering or pursuant to exemptions from federal
registration requirements. Where registration is required, a Fund may be
obligated to pay all or part of the registration expense, and a considerable
period may elapse between the time of the decision to sell and the time a Fund
may be permitted to sell a security under an effective registration statement.
If during such a period adverse market conditions were to develop, such Fund
might obtain a less favorable price than prevailed when it decided to sell.
Warrants. A 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. A 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.
Forward Commitments. A 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 a
Fund's other assets. A Fund may dispose of a commitment prior to settlement and
may realize short-term profits or losses upon such disposition.
Repurchase Agreements. A 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 a Fund is investing for temporary defensive purposes. A repurchase
agreement is a contract under which a 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. A
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 investment
adviser for a Fund will monitor the creditworthiness of the counterparties to
repurchase agreements with that Fund.
Securities Loans. A 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 investment adviser to a Fund 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. A 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, a 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. A Fund
may also call such loans in order to sell the securities involved.
Cash Reserves. A Fund's cash reserves, held to provide sufficient
flexibility to take advantage of new opportunities for investments and for other
cash needs, will be invested in money market instruments and generally will not
exceed 15% of total assets.
When-Issued and Delayed Delivery Transactions. A 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 a 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 a 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. A 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, a 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, a 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 Fund's
payment obligation).
Options Transactions. A Fund will not write options that are not "covered."
A written call option is "covered" if a 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 a 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 a 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 a 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 a 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 a 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 a 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.
A 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; a 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 a Fund.
A 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 a 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, a Fund's maximum gain will be the premium
received by it for writing the option, adjusted upwards or downwards by the
difference between a 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, a Fund may elect to close the position or take
delivery of the security at the exercise price. In that event, a 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 a 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.
OTC Options. A 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. A 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 Funds not to enter into any OTC option
transaction if, as a result, more than 10% of a Fund's net assets would be
invested in OTC options purchased by the Fund and other illiquid investments.
Limitations on the Use of Options Strategies. A 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 a Fund will be able to utilize these instruments effectively for the
purposes set forth above. Furthermore, a 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 unforeseen 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 Funds may sell futures contracts, purchase put
options on futures contracts and write call options on futures contracts for the
purpose of hedging its portfolio. The Funds will use financial futures
contracts and related options only for "bona fide hedging" purposes, as such
term is defined in applicable regulations of the Commodity Futures Trading
Commission, 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 a Fund's
total assets.
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.
A 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. A 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 a Fund against a decline in
the value of its investments in fixed-income securities. As such values
decline, the value of a 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 a
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, a 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, a 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. A 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. A Fund may purchase put options on futures
contracts in circumstances where it would sell futures contracts.
A 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 Funds 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 a Fund's portfolio or which a Fund intends to purchase. In
connection with its purchase of index futures contracts, a 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. A 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.
A 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 a 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, a 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, a 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 a Fund anticipates purchasing, or options thereon. In
such instances, it is possible that the market may instead decline. If a Fund
does not then invest in such securities because of concern as to possible
further market decline or for other reasons, a 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 a 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 investment adviser to a Fund 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 a 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, a Fund's total return for such period may
be less than if it had not engaged in the hedging transaction.
FUNDAMENTAL INVESTMENT RESTRICTIONS
Except as otherwise noted, each of the Funds have adopted the following
investment restrictions as fundamental policies of such Fund. A fundamental
policy may not be changed without the vote of a majority of outstanding voting
securities of such Fund. "Majority" means he holders of the lesser of: (i) 67%
of a 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 such Fund.
1. A Fund will not purchase securities on margin or participate in a
joint-trading account.
2. A 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. A Fund will
not purchase securities while it has any outstanding borrowings.
3. A Fund will not make short sales of securities or maintain a short
position for the account of such Fund unless at all times when a short
position is open such 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. A Fund will not make investments for the purpose of exercising control
or management of any company.
5. The Growth and Income Fund and the Regional Bank Fund will each limit
their respective purchases of securities of any issuer (other than the
United States or an instrumentality of the United States) in such a
manner that such Fund 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 that Fund's 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 such 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 Growth and
Income 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. A 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 Trust or an officer, director or other affiliated person of its
investment advisor; or (b) officers or trustees of the Trust 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. A Fund will not write (sell) or purchase options except that a 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 such Fund on all outstanding options it has purchased
do not exceed 5% of its total assets. A Fund may enter into closing
sale transactions with respect to options it has purchased.
9. A Fund will not act as an underwriter or distributor of securities
other than shares of such Fund.
10. A Fund will not purchase any interest in any oil, gas or any other
mineral exploration or development lease or program.
11. A Fund will not purchase or sell real estate, real estate mortgage
loans or real estate limited partnerships, except that the REIT Fund
may hold and sell real estate acquired through default, liquidation,
or other distributions of an interest in real estate as a result of
the REIT Fund's ownership of real estate investment trusts, securities
secured by real estate or interests thereon and securities of
companies engaged in the real estate business.
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. A Fund will not make loans, except by purchase of debt obligations or
by entering into repurchase agreements or through the lending of a
Fund's portfolio securities with respect to not more than 25% of its
total assets.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
It is contrary to the present policy of each Fund, although such policies may
be changed by trustees of the Trust without approval of the shareholders of a
Fund, to purchase securities of other investment companies except (a) as part of
a plan of merger, consolidation or reorganization approved by the shareholders
of a 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 a Fund would hold less than 3%
of any class of securities, including voting securities, of any registered
investment company and less than 5% of a Fund's assets, taken at current value,
would be invested in securities of registered investment companies. All assets
of a Fund invested in securities of registered investment companies will be
included in the daily net assets of such Fund for purposes of calculating the
monthly advisory fees payable to the Advisor. In such event, shareholders of
such Fund will in effect pay two advisory fees on the assets invested in
investment companies.
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, a 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 a Fund or (2)
67% or more of the shares of a Fund present at a meeting if more than 50% of the
outstanding shares are represented at the meeting in person or by proxy.
PORTFOLIO TURNOVER
A change in securities held by a 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 Funds, under certain market conditions a Fund's
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 each Fund.
MANAGEMENT OF THE FUNDS
GENERAL INFORMATION REGARDING MANAGEMENT
The Trustees are responsible for the general supervision of the Trust and the
Funds. The day-to-day operations of the Trust are the responsibilities of the
Trust's officers.
MANAGEMENT INFORMATION
The name, address, principal occupations during the past five years and other
information with respect to each of the trustees and officers of the Trust are
as follows:
LAWRENCE KUJAWSKI*<F18>
POSITIONS(S) HELD PRINCIPAL OCCUPATIONS
ADDRESS AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------- --- ----------------- ----------------------
839 N. Jefferson Street 58 President Mr. Kujawski has acted as a
Milwaukee, WI 53202 Treasurer wholesaler of the Growth
Trustee and Income Fund since 1995.
Mr. Kujawski has acted as
the President of the Trust
since 1996. He is, and 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.
RICHARD IMPERIALE*<F18>
POSITIONS(S) HELD PRINCIPAL OCCUPATIONS
ADDRESS AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------- --- ----------------- ----------------------
839 N. Jefferson Street 41 Chairman Mr. Imperiale has been the
Milwaukee, WI 53202 Secretary President of Uniplan, Inc.,
Trustee the investment advisor to
the Growth and Income Fund
and the REIT Fund, since he
founded Uniplan, Inc. in
1985.
F.L. KIRBY
POSITIONS(S) HELD PRINCIPAL OCCUPATIONS
ADDRESS AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------- --- ----------------- ----------------------
181 W. Madison Street 54 Trustee Mr. Kirby is a senior vice
Chicago, IL 60602 president of Schroders, a
broker-dealer, a position
he has held since March 16,
1998. From 1994 until
March 1998, he was a
Director, and an Executive
Committee member of Rodman
& Renshaw, Inc., the Growth
and Income Fund's former
distributor. From 1993
through 1994, Mr. Kirby was
a senior vice president at
Oppenheimer & Co., another
broker-dealer. From 1991
through 1993, he was a
senior vice president, a
director and an Executive
Committee member of Rodman
& Renshaw, Inc.
JOHN L. KOMIVES
POSITIONS(S) HELD PRINCIPAL OCCUPATIONS
ADDRESS AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------- --- ----------------- ----------------------
101 S. Second Street 68 Trustee Dr. Komives is the
Milwaukee, WI 53204 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, among
others: F.W. Boelter Cos.,
Inc., Milwaukee, Wisconsin;
Eagle Technology, Inc.,
Mequon, 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.
J. MICHAEL BORDEN
POSITIONS(S) HELD PRINCIPAL OCCUPATIONS
ADDRESS AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------- --- ----------------- ----------------------
2938 North Shore Drive 62 Trustee Since 1988, Mr. Borden has
Delavan, WI 53115 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
POSITIONS(S) HELD PRINCIPAL OCCUPATIONS
ADDRESS AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------- --- ----------------- ----------------------
Binghampton, NY 47 Trustee Mr. Lasser is an Associate
Professor of Finance,
School of Management, SUNY-
Binghamton, New York, a
position he has held since
1988.
JOHN A. HAWKE*<F18>
POSITIONS(S) HELD PRINCIPAL OCCUPATIONS
ADDRESS AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------- --- ----------------- ----------------------
135 S. LaSalle Street 54 Trustee Mr. Hawke is the President
Chicago, Illinois 60603 of Howe Barnes Investments,
Inc., a broker-dealer and
an affiliate of Marshall
Capital, the advisor to the
Regional Bank Fund, a
position he has held since
199 . From 199 to 199 ,
Mr. Hawke was .
*<F18> Messrs. Kujawski, Imperiale and Hawke are trustees who are "interested
persons" of the Funds as that term is defined in the Investment
Company Act of 1940.
COMPENSATION
Each Fund's standard method of compensating trustees is to pay each trustee
who is not an officer of the Trust a fee from each Fund for each meeting of the
trustees attended. Until October 1998, such fee was $250. Effective October,
1998, such fee was decreased to $100 per Fund per meeting. A Fund also may
reimburse its trustees for travel expenses incurred in order to attend meetings
of the trustees.
For the fiscal year ended October 31, 1997, officers and trustees of the
Trust received $4,000 in the aggregate remuneration from the Growth & Income
Fund as set forth more fully in the compensation table below. (Because the
Regional Bank Fund and the REIT Fund are new series of the Trust, no
compensation has been paid to the officers and trustees in connection with their
service with those Funds.)
COMPENSATION TABLE
(FOR THE FISCAL YEAR ENDED OCTOBER 31, 1997)
<TABLE>
Pension or
Retirement
Benefits
Aggregate Accrued as Estimated Total
Compensation Part of Trust Annual Benefits Compensation
Name of Trustee From the Trust Expenses Upon Retirement From the Trust
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lawrence Kujawski 0 0 0 0
Richard Imperiale 0 0 0 0
F.L. Kirby 0 0 0 0
John Komives $1,000 0 0 $1,000
J. Michael Borden 1,000 0 0 1,000
Dennis Lasser 1,000 0 0 1,000
James Stanko 1,000 0 0 1,000
</TABLE>
Note: Officers of the Funds receive no compensation for their service as
officers.
SALES CHARGES
As described in the Prospectus, the contingent deferred sales charge is
waived on redemptions of Class B shares for certain classes of individuals or
entities on account of: (i) the fact that a 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, Class A shares of a Fund are sold pursuant to
an initial sales charge, which declines as the amount of purchase reaches
certain defined levels.
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
No person is deemed to "control," as that term is defined in the Investment
Company Act of 1940, the Trust or the Funds. No person other than those set
forth in the table below owns of record or beneficially 5% or more of the
outstanding securities of any class of the Growth and Income Fund. (No sale has
yet been made of the securities issued by the Regional Bank Fund and the REIT
Fund.)
<TABLE>
Name and Address Of Percent of Percent of
Beneficial Owner Number of Shares Class Total Fund
------------------- ----------------- ---------- ------------
<S> <C> <C> <C>
Firstar Trust Company - Custodian for 83,991.118 14.03% 11.67%
Sidney Shindell - IRA Rollover Class A Shares
929 N. Astor Street
Milwaukee, Wisconsin 53202-3454
Donaldson Lufkin Jenrette 59,713.435 9.97% 8.30%
Securities Corporation Inc. Class A Shares
For the exclusive benefit of our customers
P.O. Box 2052 11,114.087 9.18% 1.54%
Jersey City, NJ 07303-2052 Class B Shares ------
9.84%
Clarke & Co. 59,706.320 9.97% 8.30%
235 West Schrock Rd. Class A. Share
Westerville, Ohio 43081-2874
Marshall & Ilsley Trust Company, trustee 56,736.928 9.48% 7.88%
FBO Hough Mfg. Corp. Class A Shares
Retirement Trust
1000 N. Water Street
Milwaukee, Wisconsin 53202-3197
Firstar Trust Co. - Custodian for 49,891.406 8.33% 6.93%
Carlisle F. Meredith IRA Class A Shares
40344 Charleston Pike
Hamilton, Virginia 20158-3216
Wexford Clearing Services Corp. 7,674.643 6.34% 1.07%
Robert J. Haasl & JoAnn Haasl Jt. Ten. Class B Shares
PDI Inc.
P.O. Box 130
Circle Pines, Minnesota 55014-0130
Officers and Trustees as a Group2<F19> 54,947.124 9.18% 7.63%
(7 persons) Class A Shares
</TABLE>
2<F19> This includes shares held by Uniplan Inc., as well as shares held by Mr.
Imperiale in his capacity as trustee of the Uniplan Inc. Profit Sharing
Plan and by Mr. Imperiale and Mr. Komives in their capacities as
custodians under the Uniform Transfer to Minors Act.
EXCHANGE PRIVILEGE
As described in the Prospectus under the caption "Exchange Privilege," a
shareholder may exchange shares of a Fund for shares of same class of any other
Fund or for shares of the Firstar Money Market Fund at their current 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 a 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 a 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 Funds reserve
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.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Advisers. As set forth in the Prospectus, the investment adviser
to the Growth and Income Fund and the REIT Fund is Uniplan, Inc. ("Uniplan"),
and the investment adviser for the Regional Bank Fund. Uniplan's address is 839
N. Jefferson Street is Marshall Capital ("Marshall Capital"). (Each of Uniplan
and Marshall Capital is sometimes referred to herein as an "Advisor"). Pursuant
to investment advisory agreements between the Funds and their respective
investment advisers (the "Advisory Agreements"), Uniplan and Marshall Capital
furnish continuous investment advisory services and management to the Funds.
Uniplan is controlled by Richard P. Imperiale, who owns 90% of its outstanding
capital stock. Mr. Imperiale is also a trustee of the Fund. Marshall Capital
is a wholly owned subsidiary of Howe Barnes Investments, Inc., a broker-dealer.
John A. Hawke, the President of Marshall Capital and its affiliate, Howe Barnes,
is also a trustee of the Trust.
The Advisory Agreements will remain in effect as long as their continuance is
specifically approved at least annually, by (i) the trustees of the Trust, or by
the vote of a majority (as defined in the Investment Company Act of 1940) of the
outstanding shares of the Funds, and (ii) by the vote of a majority of the
trustees of the Trust who are not parties to the Advisory Agreement or
interested persons of an Advisor, cast in person at a meeting called for the
purpose of voting on such approval. Each Advisory Agreement provides that it
may be terminated at any time without the payment of any penalty, by the
trustees of the Trust or by vote of a majority of a Fund's shareholders, on
sixty days written notice to the relevant Advisor, and by the Advisor on the
same notice to a Fund and that it shall be automatically terminated if it is
assigned.
Each Advisory Agreement provides that the Advisor shall not be liable to the
relevant Fund or its shareholders for anything other than willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations or duties.
Each Advisory Agreement also provides that the relevant 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 their services connected to the Funds, Uniplan and Marshall Capital
receive an annual fee of .60% on the first $500,000,000 of average net assets,
.50% of the next $500,000,000 of average net assets and .40% of average net
assets in excess of $1,000,000,000 of each Fund for which they act as investment
adviser. In the most recent fiscal year, an aggregate fee of .60% of average
net assets was paid to Uniplan, as investment adviser for the Growth and Income
Fund. All of the above fees are paid monthly. For the fiscal years ended
October 31, 1997 and October 31, 1996, and for the period September 1, 1995
(commencement of operations) through October 31, 1995, the fees paid to Uniplan
under the Advisory Agreement between Uniplan and the Growth and Income Fund were
$38,956, $18,010 and $1,000, respectively.
Principal Underwriter. Adviser Dealer Services, Inc., 6000 Memorial Drive,
Dublin, Ohio 43017 (the "Distributor") is the principal underwriter of all Fund
shares.
Under the Underwriting Agreements between each Fund and the Distributor (the
"Underwriting Agreement"), the Distributor is not obligated to sell any specific
amount of shares of a Fund and will purchase shares for resale only against
orders for shares. The Underwriting Agreements may be terminated with respect
to a Fund or class of shares thereof at any time on 90 days' written notice
without payment of any penalty either by the Distributor or by such Fund by vote
of a majority of the outstanding voting securities of such Fund or that class,
as the case may be, or by vote of a majority of the trustees of the Trust who
are not interested persons of such Fund (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the Funds' distribution and
servicing plans with Class A shares and Class B shares pursuant to Rule 12b-1
(the "Plans") or any agreement relating to the Plans (the "Independent
Trustees").
Services Provided by Uniplan and Marshall Capital. Uniplan and Marshall
Capital, at their own expense and without reimbursement from the Funds, furnish
office space and all necessary office facilities, equipment and executive
personnel for making investment decisions for the Funds each manages and
maintaining their organization. Uniplan and Marshall Capital also pay the
salaries and fees of all officers and Trustees of the Funds each manages (except
the fees paid to disinterested directors or Trustees who are affiliated with the
distributor of Fund shares).
Payment of Fund Expenses. The Fund will pay all of its expenses not assumed
by the Adviser or the 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 Funds will also pay the
fees of Trustees who are not officers of the Trust, 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.
Expense Reimbursements. Howe Barnes Investments, Inc. an affiliate of
Marshall Capital, has agreed that in the event that Uniplan and Marshall Capital
and the Distributor do not reimburse the Funds they either advise or distribute,
as the case may be, for expenses in excess of 1.15% and 1.90% of average net
assets of Class A Shares and Class B Shares, respectively, commencing July 28,
1998, it will voluntarily make such reimbursements. Such reimbursements to the
Funds may be modified or discontinued at any time. From May 7, 1998 until July
28, 1998, such reimbursement obligation was the responsibility of Uniplan. From
September 1, 1995 (commencement of operations for the Growth and Income Fund)
until May 7, 1998, such reimbursement obligation was the responsibility of
Rodman & Renshaw, Inc., who was the Growth and Income Fund's distributor for
such periods. For the fiscal years ended October 31, 1997 and October 31, 1996,
and for the period September 1, 1995 (commencement of operations) through
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, Rodman & Renshaw, Inc. reimbursed the Fund, $117,913, $144,639, and
$27,342, respectively, for the same periods.
Distribution and Servicing. Shares of each 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").
Pursuant to the Distribution and Servicing Plans, in connection with the
distribution of Class B shares of a Fund, the Distributor receives certain
distribution fees from each Fund, and in connection with personal services
rendered to Class A and Class B shareholders of each Fund and the maintenance of
shareholder accounts, the Distributor receives certain servicing fees from that
Fund. Each Fund pays the Distributor annual servicing fees of up to .25% of the
Fund's average daily net assets attributable to Class A shares. Each Fund pays
the Distributor annual distribution and servicing fees of up to .75% and .25%,
respectively, of the Fund's average daily net assets attributable to Class B
shares.
As described in the Prospectus, the Distributor pays all or a portion of the
distribution and servicing fees it receives from a Fund to participating and
introducing brokers.
Each Distribution and Servicing Plan may be terminated with respect to the
class of shares of a Fund by vote of a majority of 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. A 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 a 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 Underwriting Agreement and the Distribution and Servicing Plans will
continue in effect with respect to each 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 Underwriting Agreement or the Distribution and Servicing Plans are
terminated (or not renewed) with respect to a 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 a Fund by reducing Fund expense ratios and/or
by affording greater flexibility to Fund managers.
The Advisors and the Distributor have entered into an agreement pursuant to
which an Advisor may purchase certain receivables of the Distributor for the
purpose of providing financing to the Distributor to enable the Distributor to
pay certain distribution and other expenses related to the Distributor's role as
the underwriter of a Fund's shares.
Administrator. The administrator to the Funds is Firstar Mutual Fund
Services, LLC (the "Administrator"), 615 East Michigan Street, Milwaukee,
Wisconsin 53202. The administration agreements entered into between each 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 Trust 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 a Fund.
Under the Administration Agreement, the Administrator maintains the books,
accounts and other documents required by the Investment Company Act of 1940,
responds to shareholder inquiries, prepares each 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 each Fund's financial and accounting
records and generally assists in all aspects of the Funds' operations. The
Administrator, at its own expense and without reimbursement from the Funds,
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 each Fund a fee, paid monthly, based on the Fund's average net
assets, plus certain out-of-pocket expenses.
Under the Administration Agreement, the Administrator is not liable for any
error of judgment or mistake of law or for any loss suffered by a 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
its services, the Administrator is entitled to receive fees, payable monthly,
based on the total annual rate of $20,000 in the event that the average net
assets of a Fund is less than $10,000,000 and increasing by $4,000 for every
$2,000,000 increase in average net assets of the Fund until the Fund reaches
$20,000,000 in average net assets. At such time, the fee is .25% of the average
net assets of the Fund; such fee decreases to .2% of the average net assets when
average net assets reach $25,000,000 and decreases to .15% of the average net
assets when average net assets reach $30,000,000. At such time as the average
net assets reach $200,000,000, the fees are .06% on the first $200,000,000, .05%
on the next $300,000,000 and .03% on all net assets exceeding $500,000,000. For
the fiscal years ended October 31, 1997 and October 31, 1996, and for the period
September 1, 1995 (commencement of operations) through October 31, 1995, the
fees earned by the Administrator were $21,286, $36,538 and $5,620, respectively.
Custodian. Firstar Bank Milwaukee, N.A. serves as custodian of the Fund's
assets pursuant to a Custody Agreement with each Fund. Under the Custody
Agreements, Firstar Bank Milwaukee, N.A. has agreed to (i) maintain a separate
account in the name of each Fund, (ii) make receipts and disbursements of money
on behalf of each Fund, (iii) collect and receive all income and other payments
and distributions on account of each Fund's portfolio investments, (iv) respond
to correspondence from shareholders, security brokers and others relating to its
duties and (v) make periodic reports to each Fund concerning the Fund's
operations. Firstar Bank Milwaukee, N.A. does not exercise any supervisory
function over the purchase and sale of securities. For its services as
custodian, Firstar Bank Milwaukee, N.A. is entitled to receive a fee, payable
quarterly, based on the annual rate of .02% of the market value of the
securities owned by each Fund (subject to a minimum annual $3,000 fee). In
addition, Firstar Bank Milwaukee, N.A., as custodian, is entitled to certain
charges for securities transactions and reimbursement for expenses. For the
fiscal years ended October 31, 1997 and October 31, 1996, and for the period
September 1, 1995 (commencement of operations) through October 31, 1995, the
fees earned by the custodian were $9,393, $7,440 and $533, respectively.
Transfer Agent and Dividend Disbursing Agent. Firstar Mutual Fund Services,
LLC also serves as transfer agent and dividend disbursing agent for each Fund
under a Shareholder Servicing Agent Agreement. As transfer and dividend
disbursing agent, Firstar Mutual Fund Services, LLC has agreed to (i) issue and
redeem shares of each Fund, (ii) make dividend and other distributions to
shareholders of each Fund, (iii) respond to correspondence by Fund shareholders
and others relating to its duties, (iv) maintain shareholder accounts, and (v)
make periodic reports to each Fund. For its transfer agency and dividend
disbursing services, Firstar Mutual Fund Services, LLC is entitled to receive
fees based on the average net assets in each Fund (subject to a minimum annual
fee of $15,000). Also, Firstar Mutual Fund Services, LLC is entitled to certain
other transaction charges and reimbursement for expenses. For the fiscal years
ended October 31, 1997 and October 31, 1996 and the period September 1, 1995
(commencement of operations of the Growth and Income Fund) through October 31,
1995, the fees earned under the Shareholder Servicing Agreement were $28,904,
$35,605, and $4,218, respectively.
In addition each Fund has entered into a Fund Accounting Servicing Agreement
with Firstar Mutual Fund Services, LLC pursuant to which Firstar Mutual Fund
Services, LLC has agreed to maintain the financial accounts and records of each
Fund and provide other accounting services to each Fund. For its accounting
services, Firstar Mutual Fund Services, LLC is entitled to receive fees, payable
monthly, based on the total annual rate of $22,000 for the first $20,000,000 in
average net assets of a Fund; .17% of average net assets when a Fund exceeds
$20,000,000 but is less than $25,000,000; .12% of average net assets when a Fund
exceeds $25,000,000 but is less than $30,000,000; and when a Fund exceeds
$30,000,000, the fees are $27,500 for the first $40,0000,000 in average net
assets of a Fund, .01% on the next $200,000,000 of average net assets of a Fund
and .005% on all net assets exceeding $240,000,000. Firstar Mutual Fund
Services, LLC is also entitled to certain out of pocket expenses, including
pricing expenses. For the fiscal years ended October 31, 1997 and October 31,
1996, and the period September 1, 1995 (commencement of operations of the Growth
and Income Fund) through October 31, 1995, the fees earned under the Fund
Accounting Servicing Agreement were $26,255, $26,799 and $3,738, respectively.
Independent Accountants. KPMG Peat Marwick LLP, 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202, currently serves as the independent accountants for
the Funds. KPMG Peat Marwick LLP conducts an annual audit of the Funds,
assists in the preparation of the Funds' federal and state tax returns and
consults with the Funds as to matters of accounting and Federal and state income
taxation.
BROKERAGE ALLOCATION AND OTHER PRACTICES
Pursuant to their agreements with the Funds, the Advisers are permitted to
select the brokers or dealers that will execute the purchases and sales of each
Fund's portfolio securities. In placing purchase and sale orders for a Fund, it
is the policy of the Advisers to seek the best execution of orders at the most
favorable price in light of the overall quality of brokerage and research
services provided.
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
Advisers 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 Advisers feel that better prices are available
from non-principal market makers who are paid commissions directly.
The Advisers may allocate portfolio brokerage on the basis of whether the
broker has sold or is currently selling Shares of a Fund and may also allocate
portfolio brokerage to the Distributor, Howen Barnes Investment, Inc., but, in
each case, only if the Adviser 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 a 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 a 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 a 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 a Fund, the Advisers also take 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 Advisers believe these services
have substantial value, they are considered supplemental to the Advisers' own
efforts in the performance of its duties under the Advisory Agreements. Other
clients of the Advisers may indirectly benefit from the availability of these
services to the Advisor, and the Fund may indirectly benefit from services
available to the Advisers as a result of transactions for other clients. The
Advisory Agreements provide that the Advisers may cause a Fund to pay a broker
which provides brokerage and research services to the Advisers a commission for
effecting a securities transaction in excess of the amount another broker would
have charged for effecting the transaction, if the Advisers 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 Advisers' overall responsibilities
with respect to a 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, a Fund may purchase securities from an underwriting syndicate of
which the principal underwriter of such 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 Advisers may limit the
ability of a Fund to purchase securities from such a syndicate.
For the fiscal years ended October 31, 1997 and October 31, 1996, and the
period September 1, 1995 (commencement of operations) through October 31, 1995,
respectively, the Growth and Income Fund paid brokerage commissions of $29,721
on total transactions of $8,839,795, $21,288 on total transactions of
$5,619,286, and $1,532 on total transactions of $545,152. During the same
periods, $1,375, $700 and $0 of the total brokerage commissions represent
brokerage commissions paid to Rodman & Renshaw, Inc., the Fund's distributor
during such period. Some of the brokers to whom commissions were paid provided
research services to Uniplan.
CAPITAL STRUCTURE
Each Fund's authorized capital consists of an unlimited number of shares of
beneficial interest. Each Fund's shareholders are entitled: (i) to one vote
per full share; (ii) to such distributions as may be declared by the Trust's
Trustees out of funds legally available; and (iii) upon liquidation, to
participate ratably in the assets available for distribution. Shares of the
Funds are voted in the aggregate and not by series, except where class voting is
required by the Investment Company Act of 1940 (e.g., change in investment
policy or approval of an investment advisory agreement), where otherwise
required by law, or where the matter to be acted upon does not affect any
interest of the shareholders of a particular Fund, then only shares of the
affected Fund are entitled to vote on that matter.
All consideration received from the sale of Fund shares of any series,
together with all income, earnings, profits and proceeds thereof, belongs to
that series and is charged with the liabilities in respect of that series and of
that series' share of the general liabilities of the Trust 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 is based on the assets
belonging to that series less the liabilities charged to that series, and
dividends can 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 Trust, the shareholders of each series would be entitled, out of the assets
of the Trust available for distribution, to the assets belonging to that series.
There are no conversion or sinking fund provisions applicable to Fund shares,
and shareholders 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 of all Funds voting for the election of Trustees for that Fund 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 Trust 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 Trust's Trust Instrument contains
provisions for the removal of Trustees by the shareholders.
Fund shares are redeemable and are transferable. All shares issued and sold
by the Funds will be fully paid and nonassessable. Fractional shares entitle
the holder to the same rights as whole shares. Firstar Mutual Fund Services,
LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202 acts as the Fund's
transfer agent and dividend disbursing agent.
The Funds 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 additional 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
additional series are established, each share outstanding, regardless of series,
would still entitle its holder to one vote. As a general matter, shares would
continue to 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 Fund 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 Trust'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 a Fund or the Trustees. The Trust Instrument provides for
indemnification and reimbursement of expenses out of the Trust's property for
any shareholder held personally liable for its obligations. The Trust
Instrument also provides that the Trust shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the Trust
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 Meetings. It is contemplated that the Trust 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 Trust's Trust Instrument and Bylaws also contain procedures for the
removal of trustees by Fund shareholders. At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders of the Funds, may, by
the affirmative vote of the holders of at least two-thirds (2/3) of the
outstanding shares of all the Funds, 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 Trust 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 Trust'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 Trust; 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.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Determination of Net Asset Value. As described in the Prospectus, 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, Martin Luther King 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 Trust 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
Funds' portfolio securities for which market quotations are readily available
are valued at the most recent bid price. Notwithstanding the above sentence,
certain of the Funds' 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 or maturity.
Suspension of Sale of Fund Shares. Under certain circumstances the Funds may
suspend the sale of their shares. Such circumstances are (1) during any period
in which the NYSE is closed, (2) when trading on the New York Stock Exchange is
restricted, (3) during an emergency which makes it impracticable for a Fund to
dispose of its assets or to determine fairly the value of its net assets, and
(4) during any other period permitted by the SEC for the protection of
investors.
Valuation. 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.
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.
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.
TAXATION OF THE FUNDS
The Trust 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 Funds: (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 Funds, are taxable to
shareholders as long-term capital gain, regardless of how long a shareholder has
held shares. Dividends from a Fund's net investment income and distributions
from a 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 a Fund from domestic corporations in any year are less
than 100% of a 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 Funds intend 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 a 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 a Fund's 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 Funds 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 Funds 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.
CALCULATION OF PERFORMANCE DATA
The Funds 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 a Fund for the stated period,
assuming the reinvestment of all dividends and distributions and reflecting the
effect of all recurring fees.
The Funds may also advertise or communicate to shareholders the yield of the
Funds. Under the rules of the Securities and Exchange Commission, such
advertisements and communications must include yield quotation calculated
according to the following formula:
6
YIELD = 2 [( a-b + 1) - 1]
----
cd
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends
d = the maximum offering price per share on the last day of
the period.
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 a Fund's total return since inception. An
investor's principal in a 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, Kiplinger's
Personal Finance, Institutional Investor, Business Week and Barron's magazines,
The New York Times, The Wall Street Journal, Investor's Business Daily and other
industry or financial publications. (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, the Consumer Price Index and other relevant
indices and industry publications. The Funds may also compare the historical
volatility if such indices during the same periods. (Volatility is a generally
accepted barometer of market risk associated with a portfolio of securities and
is generally measured in comparison to the stock market as a whole - the beta -
or in absolute terms - the standard deviation.) Such comparisons may be made in
advertisements, shareholder reports or other communications to shareholders.
Total Return with respect to a 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 Class A and Class B shares will be
calculated for public use is described above.
The total return for the one year ended October 31, 1997 was 9.17% and 8.95%
for the Growth and Income Fund's Class A and Class B Shares, respectively. The
total return for the one year ended October 31, 1996 was 5.51% and 5.10% for
Class A and Class B Shares respectively. The total return for the period
September 1, 1995 (commencement of operations for the Growth and Income Fund)
through October 31, 1995, was -5.10% and -4.70% for Class A and Class B Shares,
respectively.
Performance information is computed separately for each Fund's Class A and
Class B shares. A 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 a 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
a Fund's 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 a 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 use, 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 period of time.
PART C
OTHER INFORMATION
Item 23. EXHIBITS
(a)(1) Registrant's Certificate of Trust.*<F20>
(a)(2) Registrant's Trust Instrument.*<F20>
(b) Registrant's Bylaws. *<F20>
(c) None.
(d)(1) Investment Advisory Agreement with Uniplan, Inc. Relating to the
Growth and Income Fund. *<F20>
(d)(2) Investment Advisory Agreement with Agreement with Uniplan, Inc.
Relating to the REIT Fund.
(d)(3) Investment Advisory Agreement with Marshall Capital Management,
Inc. Relating to the Regional Bank Fund.
(e)(1) Underwriting Agreement with Adviser Dealer Services, Inc.
Relating to the Growth and Income Fund.*
(e)(2) Underwriting Agreement with Adviser Dealer Services, Inc.
Relating to the Regional Bank Fund and the REIT Fund.
(f) Form of Sales Agreement.*<F20>
(g) Custodian Agreement with Firstar Bank Milwaukee, N.A.
(h)(1) Administration Agreement with Firstar Mutual Fund Services, LLC.
(h)(2) Transfer Agent Agreement with Firstar Mutual Fund Services, LLC.
(h)(3) Accounting Services Agreement With Firstar Mutual Fund Services,
LLC.
(i) Opinion of Foley & Lardner, counsel for Registrant.
(j)(1) Consent of Coopers & Lybrand L.L.P.* <F20>
(j)(2) Consent of KPMG Peat Marwick LLP.
(k) None.
(l) Subscription Agreement. *<F20>
(m)(1) Restated Distribution and Servicing Plan of Class A Shares.
(m)(2) Restated Distribution and Servicing Plan of Class B Shares.
(n) None.
(o) Restated Plan Pursuant to Rule 18f-3 for Operation of a Multi
Class System.
(p) Powers of Attorney for Lawrence Kujawski, John Komives, Michael
Borden, Dennis Lasser and James L. Stanko, Trustees of the Trust.
(Previously filed as Exhibit 17 to Post-Effective Amendment No. 2
to Registrant's Form N-1A, on February 28, 1996, which is
incorporated by reference thereto); Power of Attorney for F.L.
Kirby, Trustee. (Previously filed as Exhibit 17.2 to Amendment
No. 3 to Registrant's Form N-1A, on February 28, 1997, which is
incorporated by reference thereto)
*<F20> Previously filed as an exhibit to Post-Effective Amendment No. 4 to
Registrant's Registration Statement and is incorporated by reference
thereto. Post-Effective Amendment No. 4 was filed on February 28,
1998.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUNDS
As of the date of this Registration Statement, no person is directly or
indirectly controlled by or under common control with Registrant.
Item 25. 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 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS
Uniplan, Inc. ("Uniplan") was organized as a Wisconsin corporation in 1985
and is registered as an investment adviser under the Investment Advisers Act of
1940. Uniplan does not manage any other mutual fund; however, Uniplan 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 Uniplan.
NAME BUSINESS AND OTHER CONNECTIONS
----- -------------------------------
Richard Imperiale President and Treasurer of Uniplan
Member of Board of Directors of Uniplan
Jeffrey DeCora Vice President and Secretary of Uniplan
Member of Board of Directors of Uniplan
Marshall Capital Management, Inc. ("Marshall Capital") was organized as an
Illinois corporation on December 30, 1997 and is registered as an investment
adviser under the Investment Advisers Act of 1940. Marshall Capital does not
manage any other mutual fund; however, Marshall Capital 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 Marshall Capital.
NAME BUSINESS AND OTHER CONNECTIONS
----- -------------------------------
George Shelton Incorporated by reference to Page of the
Statement of Additional Information pursuant to
Rule 411 under the Securities Act of 1933.
Theodore Perkowski Director of Marshall Capital
Mario Bernardi Senior Vice President of Marshall Capital
Mark Shelson Treasurer of Marshall Capital
Item 27. PRINCIPAL UNDERWRITERS
a. Adviser Dealer Services, Inc. (the "Distributor") acts as the
Registrant's principal underwriter.
b. Information with respect to directors and officers of the
Distributor is as follows:
<TABLE>
Names and Positions and Offices with Positions and Officers
Principal Addresses Principal Underwriter with Registrant
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Robert S. Meeder, Sr.(*)<F21> President, Director None
Robert S. Meeder, Jr.(*)<F21> Vice-President, Director None
Phillip Voelker(*)<F21> President, Director None
Joseph A. Zarr(*)<F21> Vice President None
Donald F. Meeder(*)<F21> Secretary None
Ronald C. Paul(*)<F21> Treasurer None
James B. Craver Asst. Secretary, None
P.O. Box 811 Asst. Treasurer
Dover, MA 02030
Mark D. Maxwell(*)<F21> Asst. Secretary None
</TABLE>
(*)<F21> 6000 Memorial Drive, Dublin, OH 43017
Item 28. 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 29. MANAGEMENT SERVICES
All management-related service contracts entered into by Registrant are
discussed in Parts A and B of this Registration Statement.
Item 30. 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.
Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Amended Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Milwaukee and State of Wisconsin on the 30th day of
November 1998.
THE JEFFERSON FUND GROUP TRUST
(Registrant)
By: /s/ Lawrence Kujawski
--------------------------------
Lawrence Kujawski
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
/s/ Lawrence Kujawski Principal Executive, Financial and
Lawrence Kujawski Accounting Officer, President,
Treasurer, and Trustee November 30, 1998
/s/ Richard Imperiale
Richard Imperiale Chairman, Secretary and Trustee November 30, 1998
/s/ F.L. Kirby
F.L. Kirby Trustee November 30, 1998
/s/ John Komives
John Komives Trustee November 30, 1998
/s/ J. Michael Borden
J. Michael Borden Trustee November 30, 1998
*<F22>
Dennis Lasser Trustee November 30, 1998
/s/ John A. Hawke
John A. Hawke Trustee November 30, 1998
*<F22> By Richard Imperiale, Attorney-in-fact
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
- -------------------------------------------------------------------------------
(a)(1) Registrant's Certificate of Trust.*<F23>
(a)(2) Registrant's Trust Instrument.*<F23>
(b) Registrant's Bylaws.*<F23>
(c) None.
(d)(1) Investment Advisory Agreement with Uniplan, Inc. Relating to the
Growth and Income Fund. *<F23>
(d)(2) Investment Advisory Agreement with Agreement with Uniplan, Inc.
Relating to the REIT Fund.
(d)(3) Investment Advisory Agreement with Marshall Capital Management, Inc
(e)(1) Underwriting Agreement with Adviser Dealer Services, Inc. Relating to
the Growth and Income Fund*<F23>
(e)(2) Underwriting Agreement with Adviser Dealer Services, Inc. Relating to
the Regional Bank Fund and the REIT Fund.
(f) Form of Sales Agreement.*<F23>
(g) Custodian Agreement with Firstar Bank Milwaukee, N.A
(h)(1) Administration Agreement with Firstar Mutual Fund Services, LLC.
(h)(2) Transfer Agent Agreement with Firstar Mutual Fund Services, LLC.
(h)(3) Accounting Services Agreement With Firstar Mutual Fund Services, LLC.
(i) Opinion of Foley & Lardner, counsel for Registrant.
(j)(1) Consent of Coopers & Lybrand L.L.P.*<F23>
(j)(2) Consent of KPMG Peat Marwick LLP.
(k) None.
(l) Subscription Agreement.*<F23>
(m)(1) Restated Distribution and Servicing Plan of Class A Shares.
(m)(2) Restated Distribution and Servicing Plan of Class B Shares.
(n) None.
(o) Restated Plan Pursuant to Rule 18f-3 for Operation of a Multi Class
System.
(p) Powers of Attorney for Lawrence Kujawski, John Komives, Michael
Borden, Dennis Lasser, and F. L. Kirby, Trustees of the Trust.*<F23>
*<F23> Incorporated by Reference
EXHIBIT (D)(2)
INVESTMENT ADVISORY AGREEMENT
Agreement made as of the day of , 1998, between The Jefferson Fund
Group Trust, a Delaware business trust (the "Trust"), and Uniplan, Inc., a
Wisconsin corporation, (the "Adviser").
W I T N E S S E T H :
WHEREAS, the Trust is registered with the Securities and Exchange Commission
as an open-end management investment company under the Investment Company Act of
1940 (the "Act");
WHEREAS, the Trust desires to retain the Adviser, which is an investment
adviser registered under the Investment Advisers Act of 1940 as its investment
adviser, as the adviser for one series of the Trust;
NOW, THEREFORE, the Trust and the Adviser do mutually promise and agree as
follows:
1. Employment.
-----------
The Trust hereby employs the Adviser to manage the investment and
reinvestment of the assets of the Jefferson REIT Fund (the "Fund") for the
period and on the terms set forth in this Agreement. The Adviser hereby accepts
such employment for the compensation herein provided and agrees during such
period to render the services and to assume the obligations herein set forth.
2. Authority of the Adviser.
-------------------------
The Adviser shall supervise and manage the investment portfolio of the Fund,
and, subject to such policies as the trustees of the Trust may determine for the
Fund, direct the purchase and sale of investment securities in the day to day
management of the Fund. The Adviser shall for all purposes herein be deemed to
be an independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust or Fund in any
way or otherwise be deemed an agent of the Trust or Fund. However, one or more
shareholders, officers, directors or employees of the Adviser may serve as
trustees and/or officers of the Trust, but without compensation or reimbursement
of expenses for such services from the Trust. Nothing herein contained shall be
deemed to require the Trust to take any action contrary to its Certificate of
Trust or Trust Instrument, dated January 20, 1995, or any applicable statute or
regulation, or to relieve or deprive the trustees of the Trust of their
responsibility for, and control of, the affairs of the Trust or the Fund.
3. Expenses.
---------
The Adviser, at its own expense and without reimbursement from the Fund,
shall furnish office space, and all necessary office facilities, equipment and
executive personnel for managing the investments of the Fund. The Adviser shall
pay the salaries and fees of all officers and trustees of the Trust affiliated
with the Adviser. Fees paid for attendance at meetings of the Trust's trustees
to trustees of the Trust who are not interested persons of the Adviser, as
defined in the Act, as amended, shall be borne by the Trust. The Fund shall
bear all other expenses initially incurred by it. The expenses of the Trust's
operations borne by the Trust include by way of illustration and not limitation,
the costs of preparing and printing its registration statements required under
the Securities Act of 1933 and the Act (and amendments thereto), the expense 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, trustee and officer liability insurance, reports to
shareholders, reports to government authorities and proxy statements, interest
charges, taxes, legal expenses, salaries of administrative and clerical
personnel, association membership dues, auditing and accounting services,
insurance premiums, brokerage and other expenses connected with the execution of
portfolio securities transactions, fees and expenses of the custodian of the
Fund's assets, expenses of calculating the net asset value and repurchasing and
redeeming shares, charges and expenses of dividend disbursing agents, registrars
and stock transfer agents and the cost of keeping all necessary shareholder
records and accounts.
4. Compensation of the Adviser.
----------------------------
For the services and facilities to be rendered and the charges and expenses
to be assumed by the Adviser hereunder, the Fund shall pay to the Adviser an
advisory fee, paid monthly, based on the average net asset value of the Fund, as
determined by valuations made as of the close of each business day of the month.
The advisory fee shall be .60% per annum of the first $500,000,000 of the Fund's
average net asset value, .50% per annum of the next $500,000,000 of the Fund's
average net asset value and .40% per annum of the Fund's average net asset value
exceeding $1,000,000,000. For any month in which this Agreement is not in
effect for the entire month, such fee shall be reduced proportionately on the
basis of the number of calendar days during which it is in effect and the fee
computed upon the average net asset value of the business days during which it
is so in effect.
5. Ownership of Shares of the Fund.
--------------------------------
Except in connection with the initial capitalization of the Fund, the Adviser
shall not take, and shall not permit any of its shareholders, officers,
directors or employees to take, a long or short position in the shares of the
Fund, except for the purchase of shares of the Fund for investment purposes at
the same price as that available to the public at the time of purchase.
6. Exclusivity.
------------
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive and the Adviser shall be free to furnish similar services to others as
long as the services hereunder are not impaired thereby.
7. Liability.
----------
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Adviser, the Adviser shall not be subject to liability to the Fund or the Trust
or to any shareholder of the Fund for any act or omission in the course of, or
connected with, rendering services hereunder, or for any losses that may be
sustained in the purchase, holding or sale of any security.
8. Brokerage Commissions.
----------------------
The Adviser may cause the Fund to pay a broker-dealer which provides
brokerage and research services, as such services are defined in Section 28(e)
of the Securities Exchange Act of 1934 (the "Exchange Act"), to the Adviser, a
commission for effecting a securities transaction in excess of the amount
another broker-dealer would have charged for effecting such transaction, if the
Adviser 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-dealer viewed in terms of either that particular transaction or
its overall responsibilities with respect to the accounts as to which it
exercises investment discretion (as defined in Section 3(a)(35) of the Exchange
Act).
9. Amendments.
-----------
This Agreement may be amended by the mutual consent of the parties; provided,
however, that in no event may it be amended without the approval of the trustees
of the Trust in the manner required by the Act, and, if required by the Act, by
the vote of the majority of the outstanding voting securities of the Fund, as
defined in the Act.
10. Termination.
------------
This Agreement may be terminated at any time, without the payment of any
penalty, by the trustees of the Trust or by a vote of the majority of the
outstanding voting securities of the Fund, as defined in the Act, upon giving
sixty (60) days' written notice to the Adviser. This Agreement may be
terminated by the Adviser at any time upon the giving of sixty (60) days'
written notice to the Trust. This Agreement shall terminate automatically in
the event of its assignment (as defined in Section 2(a)(4) of the Act). Subject
to prior termination as hereinbefore provided, this Agreement shall continue in
effect for two (2) years from the date hereof and indefinitely thereafter, but
only so long as the continuance after such two (2) year period is specifically
approved annually by: (i) the trustees of the Trust or by the vote of the
majority of the outstanding voting securities of the Fund, as defined in the
Act; and (ii) the trustees of the Trust in the manner required by the Act,
provided that any such approval may be made effective not more than sixty (60)
days thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day first above written.
UNIPLAN, INC.
By: Richard Imperiale
/s/ Richard Imperiale
Its: Chairman
THE JEFFERSON FUND GROUP TRUST
By: Richard Imperiale
/s/ Richard Imperiale
Its: Chairman
EXHIBIT (D)(3)
INVESTMENT ADVISORY AGREEMENT
Agreement made as of the day of , 1998, between The Jefferson Fund
Group Trust, a Delaware business trust (the "Trust"), and Marshall Capital
Management, Inc., a (the "Adviser").
W I T N E S S E T H :
WHEREAS, the Trust is registered with the Securities and Exchange Commission
as an open-end management investment company under the Investment Company Act of
1940 (the "Act");
WHEREAS, the Trust desires to retain the Adviser, which is an investment
adviser registered under the Investment Advisers Act of 1940 as its investment
adviser, as the adviser for one series of the Trust;
NOW, THEREFORE, the Trust and the Adviser do mutually promise and agree as
follows:
11. Employment.
-----------
The Trust hereby employs the Adviser to manage the investment and
reinvestment of the assets of the Jefferson Regional Bank Fund (the "Fund") for
the period and on the terms set forth in this Agreement. The Adviser hereby
accepts such employment for the compensation herein provided and agrees during
such period to render the services and to assume the obligations herein set
forth.
12. Authority of the Adviser.
-------------------------
The Adviser shall supervise and manage the investment portfolio of the Fund,
and, subject to such policies as the trustees of the Trust may determine for the
Fund, direct the purchase and sale of investment securities in the day to day
management of the Fund. The Adviser shall for all purposes herein be deemed to
be an independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust or Fund in any
way or otherwise be deemed an agent of the Trust or Fund. However, one or more
shareholders, officers, directors or employees of the Adviser may serve as
trustees and/or officers of the Trust, but without compensation or reimbursement
of expenses for such services from the Trust. Nothing herein contained shall be
deemed to require the Trust to take any action contrary to its Certificate of
Trust or Trust Instrument, dated January 20, 1995, or any applicable statute or
regulation, or to relieve or deprive the trustees of the Trust of their
responsibility for, and control of, the affairs of the Trust or the Fund.
13. Expenses.
---------
The Adviser, at its own expense and without reimbursement from the Fund,
shall furnish office space, and all necessary office facilities, equipment and
executive personnel for managing the investments of the Fund. The Adviser shall
pay the salaries and fees of all officers and trustees of the Trust affiliated
with the Adviser. Fees paid for attendance at meetings of the Trust's trustees
to trustees of the Trust who are not interested persons of the Adviser, as
defined in the Act, as amended, shall be borne by the Trust. The Fund shall
bear all other expenses initially incurred by it. The expenses of the Trust's
operations borne by the Trust include by way of illustration and not limitation,
the costs of preparing and printing its registration statements required under
the Securities Act of 1933 and the Act (and amendments thereto), the expense 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, trustee and officer liability insurance, reports to
shareholders, reports to government authorities and proxy statements, interest
charges, taxes, legal expenses, salaries of administrative and clerical
personnel, association membership dues, auditing and accounting services,
insurance premiums, brokerage and other expenses connected with the execution of
portfolio securities transactions, fees and expenses of the custodian of the
Fund's assets, expenses of calculating the net asset value and repurchasing and
redeeming shares, charges and expenses of dividend disbursing agents, registrars
and stock transfer agents and the cost of keeping all necessary shareholder
records and accounts.
14. Compensation of the Adviser.
----------------------------
For the services and facilities to be rendered and the charges and expenses
to be assumed by the Adviser hereunder, the Fund shall pay to the Adviser an
advisory fee, paid monthly, based on the average net asset value of the Fund, as
determined by valuations made as of the close of each business day of the month.
The advisory fee shall be .60% per annum of the first $500,000,000 of the Fund's
average net asset value, .50% per annum of the next $500,000,000 of the Fund's
average net asset value and .40% per annum of the Fund's average net asset value
exceeding $1,000,000,000. For any month in which this Agreement is not in
effect for the entire month, such fee shall be reduced proportionately on the
basis of the number of calendar days during which it is in effect and the fee
computed upon the average net asset value of the business days during which it
is so in effect.
15. Ownership of Shares of the Fund.
--------------------------------
Except in connection with the initial capitalization of the Fund, the Adviser
shall not take, and shall not permit any of its shareholders, officers,
directors or employees to take, a long or short position in the shares of the
Fund, except for the purchase of shares of the Fund for investment purposes at
the same price as that available to the public at the time of purchase.
16. Exclusivity.
------------
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive and the Adviser shall be free to furnish similar services to others as
long as the services hereunder are not impaired thereby.
17. Liability.
----------
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Adviser, the Adviser shall not be subject to liability to the Fund or the Trust
or to any shareholder of the Fund for any act or omission in the course of, or
connected with, rendering services hereunder, or for any losses that may be
sustained in the purchase, holding or sale of any security.
18. Brokerage Commissions
---------------------
The Adviser may cause the Fund to pay a broker-dealer which provides
brokerage and research services, as such services are defined in Section 28(e)
of the Securities Exchange Act of 1934 (the "Exchange Act"), to the Adviser, a
commission for effecting a securities transaction in excess of the amount
another broker-dealer would have charged for effecting such transaction, if the
Adviser 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-dealer viewed in terms of either that particular transaction or
its overall responsibilities with respect to the accounts as to which it
exercises investment discretion (as defined in Section 3(a)(35) of the Exchange
Act).
19. Amendments.
-----------
This Agreement may be amended by the mutual consent of the parties; provided,
however, that in no event may it be amended without the approval of the trustees
of the Trust in the manner required by the Act, and, if required by the Act, by
the vote of the majority of the outstanding voting securities of the Fund, as
defined in the Act.
20. Termination.
------------
This Agreement may be terminated at any time, without the payment of any
penalty, by the trustees of the Trust or by a vote of the majority of the
outstanding voting securities of the Fund, as defined in the Act, upon giving
sixty (60) days' written notice to the Adviser. This Agreement may be
terminated by the Adviser at any time upon the giving of sixty (60) days'
written notice to the Trust. This Agreement shall terminate automatically in
the event of its assignment (as defined in Section 2(a)(4) of the Act). Subject
to prior termination as hereinbefore provided, this Agreement shall continue in
effect for two (2) years from the date hereof and indefinitely thereafter, but
only so long as the continuance after such two (2) year period is specifically
approved annually by: (i) the trustees of the Trust or by the vote of the
majority of the outstanding voting securities of the Fund, as defined in the
Act; and (ii) the trustees of the Trust in the manner required by the Act,
provided that any such approval may be made effective not more than sixty (60)
days thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day first above written.
MARSHALL CAPITAL MANAGEMENT, INC.
By: /s/ John A. Hawke
Its: President
THE JEFFERSON FUND GROUP TRUST
By: Richard Imperiale
/s/ Richard Imperiale
Its: Chairman
EXHIBIT (E)(2)
UNDERWRITING AGREEMENT
-----------------------
This Agreement made as of this day of , 1998, by and between
The Jefferson Fund Group Trust, a Delaware business trust (the "Trust"), and
Adviser Dealer Services, Inc., an Ohio corporation ("Underwriter").
WHEREAS, the Trust is authorized to issue shares in separate series
representing interests in separate portfolios of securities and other assets;
and
WHEREAS, two such series of shares represent interests in the Jefferson
REIT Fund and the Jefferson Regional Bank Fund (each a "Fund"; collectively, the
"Funds"); and
WHEREAS, the Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the Securities and
Exchange Commission (the "Commission") and a member of the National Association
of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Funds and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of the Funds
(the "Shares");
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. APPOINTMENT. The Funds hereby appoint Underwriter as their exclusive
------------
agent for the distribution of the Shares, and Underwriter hereby accepts
such appointment under the terms of this Agreement. Notwithstanding any
other provision hereof, a Fund may terminate, suspend or withdraw the
offering of its Shares whenever, in its sole discretion, it deems such
action to be desirable.
2. SALE AND REPURCHASE OF SHARES.
------------------------------
(a) Underwriter will have the right, as agent for a Fund, to enter
into dealer agreements with responsible investment dealers, and to sell
Shares to such investment dealers against orders therefor at the public
offering price (as defined in paragraph 2(d) hereof) less a discount
determined by Underwriter, which discount shall not exceed the amount of
the sales charge stated in the Fund's then current Prospectus (as defined
in paragraph 5(a) hereof) and statement of additional information. At the
request of a Fund (which request shall not be more frequent than
quarterly), Underwriter shall furnish a list of broker-dealers with whom
Underwriter has entered into a dealer agreement. A Fund shall have the
right to delete from such list any broker-dealer from whom the Fund chooses
not to accept sales orders. Upon receipt of an order to purchase Shares
from a dealer with whom Underwriter has a dealer agreement, Underwriter
will promptly cause such order to be filled by the Fund. Underwriter shall
have no obligation to accept monies or Shares, or establish customer
accounts. All sales of Shares shall be conducted strictly through other
registered broker/dealers with Underwriter acting in the role of
wholesaler. The right granted to the Underwriter to sell Shares to such
investment dealers against orders therefor shall not apply to Shares issued
in the event that an investment company (whether a regulated or private
investment company or a personal holding company) is merged with and into
or consolidated with a Fund or in the event that a Fund acquires by
purchase or otherwise, all or substantially all of the assets or the
outstanding shares of any such company. Such right shall also not apply to
Shares issued by a Fund as a dividend or stock split.
(b) Underwriter will also have the right, as agent for the Funds, to
sell Shares to the public against orders therefor at the public offering
price (as defined in paragraph 2(d) hereof).
(c) Underwriter will also have the right, as agent for the Funds, to
sell Shares at their net asset value to such persons as may be approved by
the Board of Trustees of the Trust and provided in the Prospectus, all such
sales to comply with the provisions of the Act, the rules and regulations
of the Commission promulgated thereunder and all other federal and state
securities laws, rules and regulations.
(d) The public offering price shall be the net asset value of Shares
then in effect, plus any applicable sales charge determined in the manner
set forth in the Prospectus or as permitted by the Act and the rules and
regulations of the Commission promulgated thereunder. In no event shall
any applicable sales charge exceed the maximum sales charge permitted by
the rules and regulations of the NASD.
(e) The net asset value of the Shares shall be determined in the
manner provided in the Prospectus, and when determined shall be applicable
to transactions as provided for in the Prospectus. The net asset value of
the Shares shall be calculated by the Funds or by another entity on behalf
of the Funds. Underwriter shall have no duty to inquire into or liability
for the accuracy of the net asset value per Share as calculated pursuant to
paragraph (d) above.
(f) The Funds shall receive the applicable net asset value of their
Shares promptly, but in no event later than the third (3rd) business day
following the date on which Underwriter shall have received an order for
the purchase of Shares. Underwriter shall have the right to retain the
sales charge less any applicable dealer discount.
(g) Upon receipt of purchase instructions, Underwriter will transmit
such instructions to the Funds or their transfer agent for registration of
the Shares purchased. Sales of the Shares of the Funds shall be deemed to
be made when and where accepted by the Funds' transfer agent.
(h) If Underwriter is not registered as a broker-dealer in any state
or an exemption for sales of Shares by Underwriter in such state is not
otherwise available, the Funds shall not be permitted to sell Shares in the
state until Underwriter is so registered or such exemption is available.
(i) Nothing in this Agreement shall prevent Underwriter or any
affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor for any other person, firm or corporation
(including other investment companies) or in any way limit or restrict
Underwriter or such affiliated person from buying, selling or trading any
securities for its or their own account or for the accounts of others for
whom it or they may be acting; provided, however, that Underwriter
expressly agrees that it will undertake no activities which will, in its
judgment, adversely affect the performance of its obligations to the Funds
under this Agreement.
(j) Underwriter may repurchase Shares at such prices and upon such
terms and conditions as shall be specified in the Prospectus.
3. SALES OF SHARES. Underwriter does not agree to sell any specific
----------------
number of Shares. Underwriter, as agent for the Funds, undertakes to sell
Shares on a best efforts basis only against orders therefor.
4. RULES OF NASD, ETC.
-------------------
(a) Underwriter will conform in all material respects to the Conduct
Rules of the NASD and the securities laws of any jurisdiction in which it
sells any Shares.
(b) Underwriter will require each dealer with whom Underwriter has a
dealer agreement to conform to the applicable provisions of the Prospectus,
with respect to the public offering price of the Shares, and Underwriter
shall not withhold the placing of purchase orders so as to make a profit
thereby.
(c) Underwriter agrees to obtain the prior written approval of the
Funds (which approval shall not be unreasonably withheld or delayed) with
regard to, and file and clear with the proper authorities copies of, any
agreements, plans or other materials it intends to use in connection with
any sales of Shares. Copies of such materials and evidence of filing with
the proper authorities shall be furnished to the Funds. To the extent the
Funds have created any such sales materials, the Funds shall not use such
materials until Underwriter has approved of such materials and filed them
with the proper authorities.
(d) Underwriter shall not make, or authorize any registered
representative, broker or dealer to make, in connection with any sales or
solicitation of a sale of the Shares, any representations concerning the
Shares except those contained in the Prospectus covering the Shares and in
sales materials approved by the Underwriter and the Funds as information
supplemental to such Prospectus. Copies of the Prospectus will be supplied
by the Funds to Underwriter in reasonable quantities upon request.
5. Representations and Warranties of the Funds. Each Fund represents and
--------------------------------------------
warrants to, and agrees with Underwriter that:
(a) A registration statement on Form N-1A with respect to its Shares
has been prepared and filed by the Fund with the Commission under and in
all material respects in conformity with the requirements of the Securities
Act of 1933, as amended (the "33 Act"), and the Act and the Rules and
Regulations (as defined hereinbelow); such registration statement is
currently effective. As used in this Agreement, the term "Registration
Statement" means such registration statement, including all exhibits
thereto, as amended from time to time; and the term "Prospectus" means the
prospectus and statement of additional information, as amended from time to
time, constituting a part of the Registration Statement, in the form filed
with the Commission.
(b) Neither the Commission nor any state has issued any order
preventing or suspending the use of any Prospectus, and each Prospectus
complies in all material respects with the requirements of the 33 Act and
Act (together the "Acts") and the rules and regulations (the "Rules and
Regulations") promulgated by the Commission under the Acts and the
Securities Exchange Act of 1934 as amended (the "34 Act"), and does not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. The Registration Statement and the Prospectus
and any amendments or supplements thereto contain all statements which are
required to be stated therein in accordance with the Acts and the Rules and
Regulations and comply in all material respects with the requirements of
the Acts and the Rules and Regulations; and neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Fund is a series fund of a business trust which is validly
existing and in good standing under the laws of the State of Delaware with
full power and authority to own its properties and conduct its business as
now conducted; and its Shares have been duly authorized and when issued
will be validly issued, fully paid and nonassessable.
(d) The Shares conform in all material respects to the description
thereof contained in the Prospectus.
(e) The Fund has full legal right, power and authority to enter into
this Agreement and to issue, sell and deliver the Shares to be sold by it
to Underwriter as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Fund as required by the Act.
(f) The Fund is not in violation of the Trust's Declaration of Trust
or By-laws or in default under any agreement, indenture or instrument, the
effect of which violation or default would be material to the Fund. No
consent, approval, authorization or order of any court or governmental
agency or body or securities exchange is required for the consummation of
the transactions contemplated by this Agreement except such as have been
obtained and such as may be required under the Acts and the Rules and
Regulations and such as may be required under state securities laws or Blue
Sky Laws in connection with the purchase and distribution of the Shares by
Underwriter. The consummation by the Fund of the transactions contemplated
by this Agreement will not conflict with, result in the creation or
imposition of any lien, charge or encumbrance upon the assets of the Fund
pursuant to the terms of, result in a breach or violation by the Fund of
any of the terms or provisions of, or constitute a default by the Fund
under, any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Fund is a party or to which it
or its property is subject, the Declaration of Trust or By-laws of the
Trust, any statute, or any judgment, decree, order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Fund
or any of its property.
(g) The financial statements and the related notes included in the
Registration Statement and Prospectus present fairly the financial
position, results of operations and changes in financial position of the
Fund at the dates and for the periods to which they relate and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, the Fund has not
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transaction, whether or not in the ordinary
course of business, and there has not been any material change in the
capital stock, or any material adverse change, in the business, condition
(financial or other), key personnel, properties, results of operations or
assets of the Fund except in each case as disclosed in or contemplated by
the Prospectus.
(i) There is not pending, or to the knowledge of the Fund,
contemplated or threatened, any action, suit, proceeding, inquiry or
investigation, to which the Fund is a party, or to which the property of
the Fund is subject, before or brought by any court or governmental agency
or body, or any arbitrator, which, if determined adversely to the Fund
might result in any material adverse change in the business, condition
(financial or other), net asset value or results of operations, or
materially adversely affect the properties or assets of the Fund.
(j) The Fund is not in violation of any law, ordinance, governmental
rule or regulation or court decree to which it may be subject or has not
failed to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the conduct
of its business, which violation or failure to obtain is likely to have any
material adverse effect on the condition (financial or other), properties,
prospective results of operations or net asset value of the Fund.
(k) There are no contracts or other documents required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement by the Acts or by the Rules and
Regulations which have not been described or filed as required.
(l) The Fund has timely filed all necessary federal income tax
returns and all necessary state and foreign income, excise, state and
franchise tax returns, has paid all taxes shown as due thereon and has made
adequate reserves for future tax liabilities, and, except as described in
the Prospectus, there is no tax deficiency that has been asserted against
the Fund that would materially and adversely affect the business of the
Fund.
(m) The Fund maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific
authorizations, (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability of assets, (C) access
to assets is permitted only in accordance with management's general or
specific authorization, and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
6. COVENANTS OF THE FUNDS. Each Fund covenants and agrees with
------------------------
Underwriter that:
(a) The Fund will cause any subsequent amendments to the Registration
Statement to become effective as promptly as practicable and will not file
any amendment to the Registration Statement or any supplement to the
Prospectus of which Underwriter shall not previously have been furnished
with a copy a reasonable time prior to the proposed filing. Except as
otherwise provided in Section 1 hereof, the Fund will maintain an effective
Registration Statement as required by the Acts at all times during the term
of this Agreement. Except as otherwise provided in Section 1 hereof, the
Fund will comply so far as it is able with all requirements imposed upon it
by the Acts and the Rules and Regulations to the extent necessary to permit
the continuance of sales of the Shares in accordance with the provisions
hereof and of the Prospectus and the Fund will prepare and file with the
Commission any amendments to the Registration Statement or supplements to
the Prospectus which it deems necessary or advisable in connection with the
distribution of the Shares by Underwriter, and will use its best efforts to
cause the same to become effective as promptly as practicable.
(b) The Fund will advise Underwriter promptly after it receives
notice or obtains knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or any order preventing or suspending the use of the Prospectus, or of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the institution or threatening of any proceeding for
any such purpose, or of any request made by the Commission for amending the
Registration Statement, for supplementing the Prospectus or for additional
information, and the Fund will use its best efforts to prevent the issuance
of any such order and, if any such order is issued to obtain the lifting
thereof as promptly as practicable.
(c) The Fund will arrange for the filing of notices of sale or
qualification of the Shares for offering and sale under the securities or
Blue Sky laws of such jurisdictions in which the Shares will be offered or
sold.
(d) The Fund will furnish to Underwriter copies of the Registration
Statement, the Prospectus, and all amendments and supplements thereto, in
each case as soon as available, and in such quantities as Underwriter may
reasonably request.
(e) The Fund will furnish to its shareholders semi-annual and annual
reports including such information and within the time requirements
prescribed by the Act.
(f) If sales of the Fund's Shares are facilitated through the use of
a clearing agency (e.g., National Securities Clearing Corporation), the
Fund shall direct its transfer agent to settle all
clearing agency transactions promptly according to the rules and
regulations of such clearing agency.
7. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER.
--------------------------------------------------
The Underwriter represents and warrants to, and agrees with the Fund,
that:
(a) Underwriter has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Ohio, with
all requisite corporate power and authority to conduct its business and to
perform its obligations contemplated herein.
(b) This Agreement has been duly and validly authorized, executed and
delivered by Underwriter and constitutes Underwriter's valid, binding and
enforceable agreement.
(c) Underwriter's execution and delivery of this Agreement, and the
performance of Underwriter's obligations hereunder, will not result in a
violation of, be in conflict with or constitute a default under any
agreement or instrument to which Underwriter is a party or by which
Underwriter or Underwriter's properties are bound, or any judgment, decree,
order, statute, rule or regulation applicable to Underwriter.
(d) The information supplied by Underwriter for inclusion in the
Prospectus and Registration Statement relating to Underwriter is complete
and correct and does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not
misleading.
(e) Underwriter is (i) a broker-dealer duly registered pursuant to
the provisions of the 34 Act, (ii) a member in good standing of the NASD,
and (iii) duly registered as a broker-dealer under the applicable laws and
regulations of each state in which Underwriter will offer and sell the
Shares, except such states in which Underwriter is exempt from registration
or such registration is not otherwise required. Underwriter will maintain
its registration in good standing, or its exemption from such registration,
throughout the term of this Agreement and Underwriter will comply with all
statutes and other requirements applicable to Underwriter with respect to
Underwriter's brokerage activities within those jurisdictions.
Underwriter, its affiliates, officers and directors have not taken or
failed to take any act, and are not subject to any order or proceeding,
that would prevent the registration of the Shares with any state securities
commission, or which will result in the issuance of any stop order on the
sale of the Shares.
(f) Underwriter is a member of National Securities Clearing
Corporation and has been assigned a Fund distributor clearing number by
Fund/Serv.
8. COVENANTS OF THE UNDERWRITER.
-----------------------------
The Underwriter covenants and agrees with the Funds that:
(a) In offering and selling the Shares, Underwriter will comply with
all applicable requirements of the Acts, the 34 Act and the Rules and
Regulations.
(b) Subject to valid exemption(s) from the requirement to register as
a broker-dealer under any of the Blue Sky Laws, Underwriter will comply
with all applicable requirements of the Blue Sky Laws applicable to
Underwriter as a broker-dealer. Underwriter will not offer or sell any of
the Shares in any jurisdiction prior to receiving instructions (oral or
written) from the Funds that offers may be made in such jurisdiction.
(c) Underwriter will abide by, and take reasonable precautions to
insure compliance with, all provisions contained in the Prospectus and this
Agreement regulating the terms and manner of conducting the offering of the
Shares. Underwriter will not use any offering or selling material other
than materials furnished or approved in writing by the Funds. Neither
Underwriter nor any of its agents will give any information or make any
representation with respect to the Funds other than the information or
representations contained in the Prospectus or any sales literature
authorized by the Funds for use in connection with the offering of the
Shares, or such other information as is specifically authorized by the
Funds.
(d) In offering and selling the Shares, Underwriter will comply in
all material respects with all applicable rules of the NASD, including NASD
Conduct Rules 2210, 2730 and 2740.
(e) Neither Underwriter nor any of its directors or officers (nor any
other person serving in a similar capacity):
(i) Has been convicted within ten years of date hereof of any
crime or offense involving the purchase or sale of any security,
involving the making of a false statement to the Commission, or
arising out of such person's conduct as an underwriter, broker,
dealer, municipal securities dealer or investment advisor.
(ii) Is subject to any order, judgment or decree of any court of
competent jurisdiction temporarily or preliminarily enjoining or
restraining, or is subject to any order, judgment or decree of any
court of competent jurisdiction, entered into within five years prior
to the date hereof, permanently enjoining or restraining such person
from engaging in or continuing any conduct or practice in connection
with the purchase or sale of any security, involving the making of a
false filing with the Commission, or arising out of the conduct of the
business of an underwriter, broker, dealer, municipal securities
dealer or investment advisor;
(iii) Is subject to an order of the Commission entered
pursuant to section 15(b), 15B(a), or 15B(c) of the 34 Act; or is
subject to an order of the Commission entered pursuant to section
203(e) or (f) of the Investment Advisers Act of 1940;
(iv) Is suspended or expelled from membership in, or suspended or
barred from association with a member of, an exchange registered as a
national securities exchange pursuant to section 6 of the 34 Act, an
association registered as a national securities association under
section 15A of the 34 Act, or a Canadian securities exchange or
association for any act or omission constituting conduct inconsistent
with just and equitable principles of trade;
(v) Is subject to a United States Postal Service false
representation order entered within five years of the date hereof; or
is subject to a restraining order or preliminary injunction entered
under section 3007 of title 39, United States Code, with respect to
any conduct alleged to constitute postal fraud;
(vi) Has been or has been named as an underwriter of any
securities covered by any registration statement which is the subject
of any pending proceeding or examination under section 8 of the 33
Act, or is the subject of any refusal order or stop order entered
thereunder within five years prior to the date hereof;
(vii) Has been or has been named as an underwriter of any
securities covered by any filing which is subject to any pending
proceeding under Rule 261 or any similar Rule adopted under section
3(b) of the 33 Act, or to an order entered thereunder within five
years prior to the date hereof; and
(viii) Has taken or failed to take any other act, or is
subject to any other order or proceeding, that would make unavailable
any registration or qualification requirements of the Acts, the 34
Act, the Rules and Regulations or the Blue Sky Laws.
(f) Underwriter shall maintain its membership with National
Securities Clearing Corporation in good standing throughout the term of
this Agreement and Underwriter shall comply with all articles, bylaws,
rules and other requirements applicable to Underwriter's activities with
National Securities Clearing Corporation and Fund/Serv.
(g) Neither Underwriter nor any of its directors, officers,
employees, or members of an advisory board is (i) ineligible, by reason of
subsection (a) of Section 9 of the Act to serve or act in such capacities
or (ii) subject to an order of the Commission entered pursuant to
subsections (b) or (f) of Section 9 of the Act.
9. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations of
--------------------------------------------
Underwriter hereunder shall be subject, in its discretion, to the accuracy
of the representations and warranties of the Funds herein and to the
performance by the Funds of their covenants and agreements hereunder.
10. CONDITIONS OF THE FUNDS' OBLIGATIONS. The obligations of the Funds
-------------------------------------
hereunder shall be subject, in their discretion, to the accuracy of the
representations and warranties of Underwriter herein and to the performance
by Underwriter of its covenants and agreements hereunder.
11. INDEMNIFICATION.
----------------
(a) Each Fund agrees to indemnify and hold harmless the Underwriter,
each person, if any, who controls Underwriter and the directors, officers
and employees of Underwriter (each, including any such controlling person,
is referred to herein as a "related person") within the meaning of the Acts
or Section 20 of the 34 Act, from and against any losses, claims, damages,
fines and liabilities, joint or several, to which Underwriter or a related
person may become subject under the Acts or otherwise insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained (A) in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or (B) in any Blue
Sky Application or other document executed by the Fund specifically for
that purpose or based upon written information furnished by the Fund filed
in any state or other jurisdiction in order to notice or qualify any or all
of the Shares under the securities laws thereof (any such application,
document or information being hereinafter called a "Blue Sky Application"),
(ii) the omission or alleged omission to state in the Registration
Statement, the Prospectus, any amendment or supplement thereof, any Blue
Sky Application, or any sales material, a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and will indemnify Underwriter and each related person from and against any
legal or other expenses reasonably incurred by Underwriter or such related
person in connection with investigating or defending any such loss, claim,
damage, liability or action, or (iii) the failure of the Fund's transfer
agent to remit appropriate amounts to or properly settle with any clearing
agency (e.g., National Securities Clearing Corporation) in accordance with
such agency's rules and regulations; provided, however, that the Fund will
not be liable in any such case to the extent, but only to the extent, that
any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, or any sales material, the
Prospectus or any amendment or supplement thereto, or any Blue Sky
Application, in reliance upon and in conformity with written information
furnished to the Fund by Underwriter expressly for use therein. This
indemnity shall not apply to any loss, claim, liability or action resulting
from willful misfeasance, bad faith or gross negligence on the part of
Underwriter or a related person. This indemnity agreement will be in
addition to any liability which the Fund may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Trust,
the Funds, the trustees and officers of the Funds and Trust, and any person
who controls the Funds or Trust within the meaning of the 33 Act (each a
"controlling person") from and against any losses, claims, damages or
liabilities to which the Trust, the Funds or any such trustee, officer or
controlling person may become subject, under the Acts or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement made by the Underwriter (A) in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or (B) in any Blue
Sky Application, or (ii) the omission or the alleged omission to state
therein made by Underwriter of a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Funds or the Trust by the Underwriter expressly for use therein; and
Underwriter will indemnify the Funds, the Trust, and any such trustee,
officer or controlling person from and against any legal or other expenses
reasonably incurred by the Funds or the Trust or any such trustee, officer
or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement
will be in addition to any liability which the Underwriter may otherwise
have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to paragraphs (a) or (b) of this Section 11, such person
(the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing (but the
omission so to notify the indemnifying party will not relieve it from any
other liability which it may have to any indemnified party), and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate
(including the indemnifying party) in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interest between
them, in which case the fees and disbursements of such counsel related to
such proceeding shall be paid by the indemnifying party. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceeding in the same jurisdiction, be liable for (a) the
reasonable fees and expenses of more than one separate firm (in addition to
any local counsel) for Underwriter and all persons, if any, who control
Underwriter within the meaning of either the Acts or Section 20 of the 34
Act, and (b) the reasonable fees and expenses of more than one separate
firm (in addition to any local counsel) for the Funds, the Trust or their
trustees or officers. It is further understood that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for Underwriter and such control persons of Underwriter, such
firm shall be designated in writing by Underwriter. In the case of any
such separate firm for the Funds and Trust, and such trustees or officers
of the Trust or Funds, such firm shall be designated in writing by the
Trust or Funds. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment.
(d) Each Fund and the Underwriter each agree to notify the other
promptly of the commencement of any litigation or proceeding against it in
connection with the issuance and sale of any of the Shares.
12. RECORDS TO BE SUPPLIED BY THE FUNDS. Each Fund shall furnish to
-------------------------------------
Underwriter copies of all information, financial statements and other
papers which Underwriter may reasonably request for use in connection with
the distribution of its Shares, and this shall include, but shall not be
limited to, one certified copy, upon request by Underwriter, of all
financial statements prepared for the Fund by independent public
accountants.
13. EXPENSES.
---------
(a) Except as otherwise provided herein, each Fund will bear all
costs and expenses incurred under this Agreement including but not limited
to:
(i) Preparation, setting in type, and printing of sufficient
copies of prospectuses and statements of additional information for
distribution to existing shareholders.
(ii) Preparation, printing and distribution of reports and other
communications to existing shareholders.
(iii) Registration of its Shares under the Acts.
(iv) Preparation and filing of notices of sale or qualification
of its Shares for sale in the various States.
(v) Qualification of the Fund as a dealer or broker under the
laws of any jurisdiction as well as qualification of the Fund to do
business in any jurisdiction, if such qualification is necessary for
the purpose of selling the Shares.
(vi) Maintaining facilities for the issue and transfer of the
Shares.
(vii) Supplying information, prices and other data to be
furnished by the Fund under this Agreement.
(viii) Any original issue taxes or transfer taxes applicable
to the sale of delivery of the Shares or certificates therefor.
(b) Except as otherwise agreed to by the parties or as otherwise
provided herein, Underwriter will pay all other expenses (other than
expenses which one or more dealers may bear pursuant to any agreement with
Underwriter) incident to the sale and distribution of the Shares sold
hereunder.
14. DISTRIBUTION PLANS. Each Fund has adopted distribution and servicing
-------------------
plans with respect to Class A Shares and Class B Shares pursuant to Rule
12b-1 under the Act (collectively, the "Plans") which provide that the Fund
may incur expenses to finance any activity which is primarily intended to
result in the sale of Shares. Such activities may include, but are not
limited to, advertising, salaries and other expenses of Underwriter
relating to selling efforts, seminars, printing of prospectuses, statements
of additional information and reports for other than existing shareholders,
preparation and distribution of advertising material and sales literature,
and supplemental payments to dealers. Underwriter shall be paid by the
Fund pursuant to the Plans with respect to Class A Shares and Class B
Shares a fee not to exceed 0.25% and 1.00% per annum, respectively, of
their average daily net assets as may be determined by the Trust's Board of
Trustees from time to time for expenses incurred by Underwriter in
connection with this Agreement.
15. LIABILITY OF UNDERWRITER.
-------------------------
(a) Underwriter, its directors, officers, employees, shareholders and
agents shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Funds in connection with the performance of
this Agreement, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services or a loss
resulting from willful misfeasance, bad faith or gross negligence on the
part of Underwriter in the performance of its obligations and duties under
this Agreement.
(b) Any person, even though also a director, officer, employee,
shareholder or agent of Underwriter, who may be or become an officer,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Funds or acting on any business of the Funds (other than
services or business in connection with Underwriter's duties hereunder), to
be rendering such services to or acting solely for the Funds and not as a
director, officer, employee, shareholder or agent, or one under the control
or direction of Underwriter even though paid by it.
16. TERMINATION OF THIS AGREEMENT.
------------------------------
(a) This Agreement may be terminated, with respect to a Fund at any
time, without payment of any penalty, by vote of a majority of the members
of the Board of Trustees of the Trust who are not interested persons of the
Fund and who have no direct or indirect financial interest in the
preparation of the Plan or in any agreement relating to the Plan or by vote
of a majority of the outstanding voting securities of the Fund on not more
than ninety (90) days' written notice to the other party. This Agreement
shall automatically terminate in the event of its assignment.
(b) The Underwriter may terminate this Agreement by giving the Fund
written notice of its intention to terminate this Agreement at the
expiration of ninety (90) days from the date of delivery of such written
notice of intention to the Fund.
17. EFFECTIVE PERIOD OF THIS AGREEMENT.
-----------------------------------
The provisions of paragraph 11 hereof shall survive the termination of
this Agreement. The remaining provisions of this Agreement shall be
effective on the date first above written and shall remain in full force
and effect for a period of two (2) years thereafter (unless terminated as
set forth in Paragraph 16), and from year to year thereafter, but only so
long as such continuance is specifically approved at least annually by (i)
the Board of Trustees of the Trust or by a vote of the majority of the
outstanding voting securities of the Funds and (ii) by a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party by vote cast in person at a meeting called for
the purpose of voting on such approval.
18. REPORTS.
--------
Underwriter shall prepare reports for the Board of Trustees of the
Trust on a quarterly basis showing such information as from time to time
shall be reasonably requested by such Board and necessary for an informed
determination as to whether this Agreement shall continue. The Underwriter
shall provide a written report, on a quarterly basis, of the amounts
expended, the purposes for which such expenditures were made and any other
information reasonably requested by the Board of Trustees of the Trust to
enable it to fulfill its responsibilities under paragraph (d) of Rule 12b-1
under the Act and to make findings required by paragraph (e) of Rule 12b-1.
19. SEVERABILITY.
-------------
In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
20. QUESTIONS OF INTERPRETATION.
----------------------------
This Agreement shall be governed by the laws of the State of Ohio,
without reference to its choice of law rules.
21. NOTICES.
--------
Any notices required or permitted to be given hereunder shall be
sufficient if in writing, and if delivered by hand, or sent by certified
mail, return receipt requested, postage prepaid, to the following
addresses:
If to the Trust or a Fund:
Jefferson Fund Group Trust
839 N. Jefferson Street
Milwaukee, WI 53202
Attention: President
If to the Underwriter:
Adviser Dealer Services, Inc.
6000 Memorial Drive
Dublin, OH 43017
Attention: President
or such other address as either party may from time to time designate in
writing to the other, and shall be deemed given as of the date of the
delivery or mailing.
22. Arbitration.
------------
Any dispute, controversy or claim arising out of or in connection with
this Agreement will be settled by binding arbitration in accordance with
the applicable rules for expedited review of (and by an independent
arbitrator selected by) the American Arbitration Association, and the
decision of such arbitrator, including any award of attorneys' fees and
costs, may be entered into any court with jurisdiction.
23. Attorneys' Fees.
----------------
If any legal action or any arbitration or other proceeding is brought
to enforce the provisions of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or
parties, whether such party or parties have instituted the action, shall be
entitled to recover reasonable attorneys' fees and other costs incurred in
such action or proceeding, in addition to any other relief to which the
Funds, the Trust or Underwriter may be entitled.
24. Entire Agreement and Binding Effect.
------------------------------------
This Agreement contains the entire agreement between the parties
hereto with respect to the subject matter hereof and shall be binding upon
and inure to the benefit of the parties hereto and their respective legal
representatives, heirs, distributees, successors and permitted assigns.
25. Amendments.
-----------
This Agreement may not be amended except by a writing signed by all of
the parties hereto.
IN WITNESS WHEREOF, the Trust and Underwriter have each caused this Agreement
to be signed in duplicate, as of the day and year first above written.
ATTEST: TRUST:
JEFFERSON FUND GROUP TRUST
- --------------------------------- BY:----------------------------
- --------------------------------- ITS:---------------------------
ATTEST: UNDERWRITER:
ADVISER DEALER SERVICES, INC.
- --------------------------------- BY:----------------------------
- --------------------------------- ITS:---------------------------
EXHIBIT (G)
ADDITION OF THE
JEFFERSON REGIONAL BANK FUND
JEFFERSON REIT FUND
TO THE
CUSTODIAN AGREEMENT
Between
THE JEFFERSON FUND GROUP TRUST
and
FIRSTAR BANK MILWAUKEE, N.A.
which is Dated as of March 16, 1995
WHEREAS, the above parties have entered into a Custodian Agreement (the
"Agreement") whereby Firstar Bank Milwaukee, N.A. ("Firstar") has agreed to
provide custody services to The Jefferson Fund Group Trust (the "Trust"); and
WHEREAS, the parties would like to add the Jefferson Regional Bank Fund and
the Jefferson REIT Fund (collectively, the "Funds") to the Agreement;
NOW THEREFORE, the Trust and Firstar agree to add the Funds to the Agreement
and compensation for the Funds will be determined as described in the Agreement.
Dated this day of October, 1998
THE JEFFERSON FUND GROUP TRUST FIRSTAR BANK MILWAUKEE, N.A.
BY: ----------------------------- BY:----------------------------
ATTEST: ATTEST:
EXHIBIT (H)(1)
ADDITION OF THE JEFFERSON REGIONAL BANK FUND
JEFFERSON REIT FUND
TO THE
FUND ADMINISTRATION SERVICING AGREEMENT
Between
THE JEFFERSON FUND GROUP TRUST
and
FIRSTAR MUTUAL FUND SERVICES, LLC
which is Dated as of March 16, 1995
WHEREAS, the above parties have entered into a Fund Administration Servicing
Agreement (the "Agreement") whereby Firstar Mutual Fund Services, LLC
("Firstar") has agreed to provide fund administration services to The Jefferson
Fund Group Trust (the "Trust"); and
WHEREAS, the parties would like to add the Jefferson Regional Bank Fund and
the Jefferson REIT Fund (collectively, the "Funds") to the Agreement;
NOW THEREFORE, the Trust and Firstar agree to add the Funds to the Agreement
and compensation for the Funds will be determined as described in the Agreement.
Dated this day of October, 1998
- ------------------- --------------------
THE JEFFERSON FUND FIRSTAR MUTUAL FUND
GROUP TRUST SERVICES, LLC
ATTEST: ATTEST:
EXHIBIT (H)(2)
ADDITION OF THE
JEFFERSON REGIONAL BANK FUND
JEFFERSON REIT FUND
TO THE
TRANSFER AGENT AGREEMENT
Between
THE JEFFERSON FUND GROUP TRUST
and
FIRSTAR MUTUAL FUND SERVICES, LLC
which is Dated as of March 16, 1995
WHEREAS, the above parties have entered into a Transfer Agent Agreement (the
"Agreement") whereby Firstar Mutual Fund Services, LLC ("Firstar") has agreed to
provide transfer agent services to The Jefferson Fund Group Trust (the "Trust");
and
WHEREAS, the parties would like to add the Jefferson Regional Bank Fund and
the Jefferson REIT Fund (collectively, the "Funds") to the Agreement;
NOW THEREFORE, the Trust and Firstar agree to add the Funds to the Agreement
and compensation for the Funds will be determined as described in the Agreement.
Dated this day of October, 1998
THE JEFFERSON FUND FIRSTAR MUTUAL FUND
GROUP TRUST SERVICES, LLC
BY: ----------------------------- BY:----------------------------
ATTEST:-------------------------- ATTEST: -----------------------
EXHIBIT (H)(3)
ADDITION OF THE
JEFFERSON REGIONAL BANK FUND
JEFFERSON REIT FUND
TO THE
FUND ACCOUNTING SERVICING AGREEMENT
Between
THE JEFFERSON FUND GROUP TRUST
and
FIRSTAR MUTUAL FUND SERVICES, LLC
which is Dated as of March 16, 1995
WHEREAS, the above parties have entered into a Fund Accounting Servicing
Agreement (the "Agreement") whereby Firstar Mutual Fund Services, LLC
("Firstar") has agreed to provide fund accounting services to The Jefferson Fund
Group Trust (the "Trust"); and
WHEREAS, the parties would like to add the Jefferson Regional Bank Fund and
the Jefferson REIT Fund (collectively, the "Funds") to the Agreement;
NOW THEREFORE, the Trust and Firstar agree to add the Funds to the Agreement
and compensation for the Funds will be determined as described in the Agreement.
Dated this ------------ day of October, 1998
THE JEFFERSON FUND FIRSTAR MUTUAL FUND
GROUP TRUST SERVICES, LLC
BY: ----------------------------- BY:----------------------------
ATTEST: TTEST:
EXHIBIT (I)
OPINION OF FOLEY & LARDNER
ONE IBM PLAZA
330 NORTH WABASH AVENUE, SUITE 3300
CHICAGO, ILLINOIS 60611-3608
TELEPHONE (312) 755-1900
FACSIMILE (312) 755-1925
November , 1998
The Jefferson Fund Group Trust
839 North Jefferson Street
Milwaukee, Wisconsin 53202
Gentlemen:
We have acted as counsel for you in connection with the preparation of Post-
Effective Amendment #5 to a Registration Statement on Form N-1A relating to the
sale by you of an indefinite amount of shares of beneficial interest, no par
value, of The Jefferson Fund Group Trust (such shares of beneficial interest
being hereinafter referred to as the "Shares") in the manner set forth in the
Registration Statement to which reference is made. In this connection we have
examined: (a) the Amended Registration Statement on Form N1-A; (b) your
Certificate of Trust, Trust Instrument and Bylaws; (c) proceedings relative to
the authorization for issuance of the Shares; and (d) such other proceedings,
documents and records as we have deemed necessary to enable us to render this
opinion.
Based upon the foregoing, we are of the opinion that the Shares when sold as
contemplated in the Amended Registration Statement will be legally issued, fully
paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the Form N-1A
Amended Registration Statement. In giving this consent, we do not admit that we
are experts within the meaning of Section 11 of the Securities Act of 1933, as
amended, or within the category of persons whose consent is required by Section
7 of said Act.
Foley & Lardner
EXHIBIT (J)(2)
CONSENT OF INDEPENDENT ACCOUNTANTS
THE SHAREHOLDERS AND BOARD OF DIRECTORS
THE JEFFERSON FUND GROUP TRUST:
We consent to the use of our report incorporated by reference and the reference
to our firm under the headings "Finacial Highlights" in the Prospectus and
"Investment Advisory and Other Services" in the Statement of Additional
Information.
Milwaukee, Wisconsin
November 30, 1998
EXHIBIT (M)(1)
RESTATED DISTRIBUTION AND SERVICING PLAN (CLASS A)
OF
JEFFERSON FUND GROUP TRUST
---------------------------------------------------
WHEREAS, THE JEFFERSON FUND GROUP TRUST (the "Trust"), is comprised of the
Jefferson Growth and Income Fund ("G&I Fund"), the Jefferson REIT Fund (the
"REIT Fund") and the Jefferson Regional Bank Fund (the "Regional Bank Fund")
(together, the "Funds," each separately, a "Fund"),
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940 and the rules and regulations
thereunder (the "Act");
WHEREAS, the Funds are each a series of the Trust, as that term is
contemplated under the Act;
WHEREAS, the Trustees of the Trust have determined that there is a reasonable
likelihood that this Distribution and Servicing Plan will benefit the Funds and
their beneficial owners; and
WHEREAS, the Trust intends to employ a broker-dealer, registered as such
under the Securities Exchange Act of 1934 (the "Distributor") as distributor of
Class A shares of beneficial interests of each of the Funds (the "Shares").
NOW THEREFORE, the Trust hereby adopts the Distribution and Servicing Plan
(the "Plan") with respect to the Funds in accordance with Rule 12b-1 under the
Act having the following terms and conditions:
1 Payment to Distributor.
-----------------------
The Trust shall pay out of the assets belonging to each Fund to Distributor
(is the distributor of the Shares), a fee (the "Servicing Fee") for services
rendered and expenses borne by the Distributor in connection with personal
services rendered to the accounts of the beneficial owners of Class A Shares
("Class A beneficial owners") of each Fund at the rate of the lesser of (a) .25%
per annum of each Fund's average daily net assets or (b) the Distributor's total
costs incurred during the year in the servicing of the Class A beneficial owner
accounts of such Fund. Such Servicing Fee shall be calculated and accrued daily
and paid monthly or at such other intervals as the Trustees shall determine or
as otherwise required by the Act.
2 Permitted Expenditures.
-----------------------
The Servicing Fee may be spent by the Distributor on personal services
rendered to Class A beneficial owners of the Funds and/or maintenance of the
Class A beneficial owner accounts (but may not be spent on recordkeeping
charges, accounting expenses, transfer costs, or custodian fees). The
Distributor's expenditures may include, but shall not be limited to,
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 for Class A Shares or the processing of dividend payments with respect
to Class A shares, who provide information periodically to account holders
showing their positions in an individual Fund's Class A Shares, who forward
communications from the Trust to Class A beneficial owners, who render ongoing
advice concerning the suitability of particular investment opportunities offered
by the Trust in light of the beneficial owner's needs, who respond to inquiries
from Class A beneficial owners relating to such services, or who train personnel
in the provision of such services.
3. Effective Date of Plan.
-----------------------
This Plan shall not take effect until (a) it has been approved by a vote of
at least a majority of the outstanding shares of Beneficial Interest (as defined
in the Act) and (b) (together with any related agreements) by votes of a
majority of both (i) the Board of Trustees of the Trust, and (ii) those Trustees
of the Trust who are not "interested person" of the Trust (as defined in the
Act) and have no direct or indirect related to it (the "Rule 12b-1 Trustees"),
cast in person at a meeting (or meetings) called for the purpose of voting on
this Plan and such related agreements.
4. Continuance.
------------
This Plan shall continue in effect for as long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in paragraph 3 (b).
5. Reports.
--------
The Distributor and other persons authorized to direct the disposition of
monies paid or payable by the Funds pursuant to this Plan or any related
agreements shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditure were made. The Distributor shall annually
certify in writing that the aggregate payments received from the Funds,
collectively, pursuant to the Plan during the year did not exceed its total
costs incurred during the year (including reasonable allocation of overhead) in
the servicing of the Shares of Beneficial Interest.
6. Termination.
------------
This Plan may be terminated at any time by vote of a majority of the Rule
12b-1 Trustees, or by a vote of a majority of the outstanding Shares (as defined
in the Act).
7. Amendments.
-----------
This Plan may not be amended to increase materially the amount of payments
provided for in paragraph 1 hereof unless such amendment is approved in the
manner provided for initial approval in paragraph 3 hereof.
8. Selection of Trustees.
----------------------
While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
9. Records.
--------
The Trust shall preserve copies of this Plan and any related agreements and
all reports made pursuant to paragraph 5 hereof, for a period of not less than
six years from the date of this Plan, or the agreements or such reports, as the
case may be, the first two years in an easily accessible place.
10. Allocation of Certain Expenses.
-------------------------------
For purposes of Paragraph 1, 2 and 5 hereof the following allocations will be
made in determining permitted expenditures. Salaries and other compensation of
employees of the Distributor may be reimbursed in proportion to the amount of
time the employee devoted to activities primarily related to servicing Class A
beneficial owners' accounts. Overhead expenses, including rent, utilities and
support staff compensation, will be allocated using similar principles. For
example, rent will be allocated pursuant to the following formula:
a. The total rent paid by the Distributor will be multiplied by a
fraction, the numerator of which is the square feet utilized by an employee
who is engaged in Servicing activities and the denominator of which is the
total square feet rented by the Distributor.
b. The product obtained will be multiplied by the percentage of the
employee's time devoted to Servicing Activities.
c. The product obtained will be added to the products similarly
calculated for all other employees engaged in Servicing Activities.
Dated: July 28, 1998
EXHIBIT (M)(2)
RESTATED DISTRIBUTION AND SERVICING PLAN (CLASS B)
OF JEFFERSON FUND GROUP TRUST
----------------------------------------------------
WHEREAS, THE JEFFERSON FUND GROUP TRUST (the "Trust"), is comprised of the
Jefferson Growth and Income Fund ("G&I Fund"), the Jefferson REIT Fund (the
"REIT Fund") and the Jefferson Regional Bank Fund (the "Regional Bank Fund")
(together, the "Funds," each separately, a "Fund"),
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940 and the rules and regulations
thereunder (the "Act");
WHEREAS, the Funds are each a series of the Trust, as that term is
contemplated under the Act;
WHEREAS, the Trustees of the Trust have determined that there is a reasonable
likelihood that this Distribution and Servicing Plan will benefit the Funds and
their beneficial owners; and
WHEREAS, the Trust intends to employ a broker-dealer, registered as such
under the Securities Exchange Act of 1934 (the "Distributor") as distributor of
Class B shares of beneficial interests of each of the Funds (the "Shares").
NOW THEREFORE, the Trust hereby adopts the Distribution and Servicing Plan
(the "Plan") with respect to the Funds in accordance with Rule 12b-1 under the
Act having the following terms and conditions:
11. Payment to Distributor.
-----------------------
The Trust shall pay out of the assets belonging to each Fund to Distributor a
fee (the "Distribution Fee") for services rendered and expenses borne by the
Distributor in connection with the distribution of Class B Shares of each Fund,
and another fee (the "Servicing Fee") in connection with personal services
rendered to the beneficial owners of Class B Shares ("Class B beneficial
owners") of each Fund and/or maintenance of all Class B beneficial owner
accounts. The Distribution Fee shall be paid at an annual rate of the lesser of
(a) 0.75 of 1% of the total of each Fund's average daily net assets attributable
to the Class B Shares of such Fund or (b) the Distributor's total costs incurred
during the year in the distribution of the Class B Shares for such Fund. The
Servicing Fee shall be paid at an annual rate of the lesser of 0.25 of 1% of the
Fund's average daily net assets attributable to Class B Shares of such Fund or
(c) the Distributor's total costs incurred during the year in the servicing of
the Class B beneficial owner accounts of such Fund. Subject to such limits and
subject to the provisions of Section 9 hereof, the Distribution and Servicing
Fees shall be approved from time to time by (a) the Trustees of the Trust and
(b) the Independent Trustees of the Trust. The Distribution and Servicing Fees
shall be accrued daily and paid monthly or at such other intervals as the
Trustees shall determine.
12. Permitted Expenditures.
-----------------------
The Servicing Fee may be spent by the Distributor on personal services
rendered to the Class B beneficial owners of the Funds and/or maintenance of
Class B beneficial owner accounts (but may not be spent on recordkeeping
charges, accounting expenses, transfer costs, or custodian fees). The
Distributor's expenditures may include, but shall not be limited to,
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 for Class B Shares or the processing of dividend payments with respect
to Class B Shares, who provide information periodically to account holders
showing their positions in a Fund's Class B Shares, who forward communications
from the Trust to Class B beneficial owners, who render ongoing advice
concerning the suitability of particular investment opportunities offered by the
Trust in light of the beneficial owners' needs, who respond to inquiries from
Class B beneficial owners relating to such services, or who train personnel in
the provision of such services.
13 Effective Date of Plan.
-----------------------
This Plan shall not take effect until (a) it has been approved by a vote of
at least a majority of the outstanding shares of Beneficial Interest (as defined
in the Act) and (b) (together with any related agreements) by votes of a
majority of both (i) the Board of Trustees of the Trust, and (ii) those Trustees
of the Trust who are not "interested person" of the Trust (as defined in the
Act) and have no direct or indirect related to it (the "Rule 12b-1 Trustees"),
cast in person at a meeting (or meetings) called for the purpose of voting on
this Plan and such related agreements.
14. Continuance.
------------
This Plan shall continue in effect for as long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in paragraph 3 (b).
15. Reports.
--------
The Distributor and other persons authorized to direct the disposition of
monies paid or payable by the Funds pursuant to this Plan or any related
agreements shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditure were made. The Distributor shall annually
certify in writing that the aggregate payments received from the Funds,
collectively, pursuant to the Plan during the year did not exceed its total
costs incurred during the year (including reasonable allocation of overhead) in
the servicing of the Shares of Beneficial Interest.
16. Termination.
------------
This Plan may be terminated at any time by vote of a majority of the Rule
12b-1 Trustees, or by a vote of a majority of the outstanding Shares (as defined
in the Act).
17. Amendments.
-----------
This Plan may not be amended to increase materially the amount of payments
provided for in paragraph 1 hereof unless such amendment is approved in the
manner provided for initial approval in paragraph 3 hereof.
18. Selection of Trustees.
----------------------
While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
19. Records.
--------
The Trust shall preserve copies of this Plan and any related agreements and
all reports made pursuant to paragraph 5 hereof, for a period of not less than
six years from the date of this Plan, or the agreements or such reports, as the
case may be, the first two years in an easily accessible place.
20. Allocation of Certain Expenses.
-------------------------------
For purposes of Paragraph 1, 2 and 5 hereof the following allocations will
be made in determining permitted expenditures. For the Distribution Fee,
salaries and other compensation of employees of the Distributor may be
reimbursed in proportion to the amount of time the employee devoted to
activities primarily intended to result in the sale of Beneficial Interests
(such activities being referred to as "Distribution Activities"). Overhead
expenses, including rent, utilities and support staff compensation, will be
allocated using similar principles. For the Servicing Fee, salaries and other
compensation of employees of the Distributor may be reimbursed in proportion to
the amount of time the employee devoted to activities primarily related to
servicing Class B Beneficial Interest accounts. For example, for the purposes
of the Distribution Fee, rent will be allocated pursuant to the following
formula:
a. The total rent paid by the Distributor will be multiplied by a
fraction, the numerator of which is the square feet utilized by an employee
who is engaged in Distribution activities and the denominator of which is
the total square feet rented by the Distributor.
b. The product obtained will be multiplied by the percentage of the
employee's time devoted to Distribution Activities.
c. The product obtained will be added to the products similarly
calculated for all other employees engaged in Distribution Activities.
Dated: July 28, 1998
EXHIBIT (O)
THE JEFFERSON FUND GROUP TRUST (THE "TRUST")
RESTATED PLAN PURSUANT TO RULE 18F-3 FOR OPERATION OF
A MULTI CLASS SYSTEM
I. INTRODUCTION
-----------------
SEC Rule 18f-3, promulgated under the Investment Company Act of 1940,
requires an investment company to adopt a written plan specifying all of the
differences among classes, including the various services offered to owners,
different distribution arrangements for each class, methods for allocating
expenses relating to those differences and any conversion features or exchange
privileges. This Restated Plan pursuant to Rule 18f-3 for operation of a multi-
class system shall become effective on August 1, 1998.
II. ATTRIBUTES OF CLASSES
---------------------------
A. Generally
---------
The Trust shall initially offer two classes -- Class A and Class B shares
for each of the Jefferson Growth and Income Fund, the Jefferson REIT Fund and
the Jefferson Regional Bank Fund (together, the "Funds," separately, a "Fund").
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 each Fund of the Trust shall
represent interests in the same portfolio of investments of such 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 such Fund's Plans and any matter submitted to owners
relating to Class expenses; (c) the designation of each Class of shares of such
Fund; and (d) the sales load and contingent deferred sales charge ("CDSC").
B. Distribution Arrangements, Expenses, Sales Charges and CDSC.
------------------------------------------------------------
The Class A shares of each Fund shall be subject to a beneficial owner
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 owners of such Fund and the maintenance of owner 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 owners showing their positions in the Funds' shares, who forward
communications from the Funds to owners, who render ongoing advice concerning
the suitability of particular investment opportunities offered by the Funds in
light of the owners' needs, who respond to inquiries from owners 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 each Fund shall be subject to a beneficial owner
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 each 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 owners 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 each
Fund, as in effect from time to time.
D. Methodology for Allocating Expenses Between Classes
---------------------------------------------------
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 each Fund, and shall be allocated to each class of
such Fund 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.
