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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
MAXUS EQUITY FUND
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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MAXUS INCOME FUND
MAXUS EQUITY FUND
MAXUS LAUREATE FUND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 17, 1997
The Annual Meeting of Shareholders of each Fund as noted above will be held
at Executive Caterers, 6111 Landerhaven Drive, Mayfield Heights, Ohio at 6:30
p.m., local time, on Thursday, April 17, 1997 for the following purposes:
1. To elect seven Trustees to hold office until the next Annual Meeting and
until their respective successors have been duly elected and qualified.
2. To ratify or reject the action taken by the Trustees in selecting
McCurdy & Associates C.P.A.'s, Inc. as Auditors for the fiscal year
ending December 31, 1997.
3. To approve a change in one of the investment policies of Maxus Laureate
Fund.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Shareholders of record as of the close of business on February 27, 1997 are
entitled to vote at the meeting or any adjournment thereof.
Robert W. Curtin,
Secretary
Cleveland, Ohio
March , 1997
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED PROXY CARD (OR CARDS IF YOU OWN SHARES IN MORE THAN ONE
FUND). YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
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PROXY STATEMENT
The accompanying proxy (or proxies if you own shares in more than one fund)
is solicited by the Trustees of Maxus Income Fund, Maxus Equity Fund and Maxus
Laureate Fund (each a "Fund" and collectively the "Funds") for use at an Annual
Meeting of Shareholders of the Funds, to be held jointly at Executive Caterers,
6111 Landerhaven Drive, Mayfield Heights, Ohio at 6:30 p.m., local time, on
Thursday, April 17, 1997.
Shareholders may vote only on matters which concern the Fund or Funds in
which they hold shares. Shareholders of record as of the close of business on
the record date, February 27, 1997, are entitled to vote at the Annual Meeting
or any adjournment thereof. As of that date, there were issued and outstanding
shares of beneficial interest of each Fund in the following amounts, each of
which is entitled to one vote at the Annual Meeting: Maxus Income Fund,
3,172,608; Maxus Equity Fund, 2,513,431; and Maxus Laureate Fund, 314,656.
This proxy statement and the accompanying proxy card(s) are being mailed to
shareholders on or about March , 1997.
THE FUNDS WILL FURNISH, WITHOUT CHARGE, A COPY OF THEIR 1996 ANNUAL REPORT
TO ANY SHAREHOLDER WHO REQUESTS IT BY CONTACTING MS. LYNN SARALLI, MAXUS
INVESTMENT GROUP, 28601 CHAGRIN BOULEVARD, CLEVELAND, OHIO 44122 (CALL TOLL-FREE
1-800-44-MAXUS).
1. ELECTION OF TRUSTEES
It is the intention of the persons named in the accompanying proxy card (or
cards) to vote at the Annual Meeting for the election of the nominees named
below as Trustees of each Fund to serve until the next Annual Meeting and until
their successors are elected and qualified. Each such nominee has consented to
being named herein and to serve if elected. If any such nominee should be unable
to serve, an event not now anticipated, the persons named as proxies may vote
for other persons in their discretion. A shareholder may instruct the persons
named as proxies not to vote the shares represented by his proxy for any or all
of the nominees for election.
INFORMATION CONCERNING NOMINEES
The information concerning the nominees set forth in the following table is
based in part on information received from the respective nominees and in part
on the records of the Funds:
NUMBER AND
PRINCIPAL OCCUPATION PERCENTAGE OF SHARES
NAME AND POSITION DURING PAST FIVE YEARS BENEFICIALLY OWNED (1);
WITH THE FUNDS (1) AND AGE DIRECTOR SINCE
- ----------------------------- ------------------------------------ ----------------------------------
Richard A. Barone* President of Maxus Securities Corp Income: 71,636 (2.3%); 1985
Chairman (broker-dealer), Maxus Asset Equity: 30,081 (1.2%); 1989
Management Inc. (investment adviser) Laureate: 10,090 (3.2%); 1993
and Resource Management Inc.
(financial services); Age 55.
N. Lee Dietrich Retired; formerly Vice President, Income: 11,831 (2); 1989
Trustee Ohio Convenient Food Mart, Inc.; Age Equity: 27,296 (1.1%); 1989
70. Laureate: 13,545 (4.3%); 1993
Sanford A. Fox, D.D.S. Endodontist; Age 59. Income: 360 (2); 1985
Trustee Equity: 15,643 (2); 1989
Laureate: 118 (2); 1993
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NUMBER AND
PRINCIPAL OCCUPATION PERCENTAGE OF SHARES
NAME AND POSITION DURING PAST FIVE YEARS BENEFICIALLY OWNED (1);
WITH THE FUNDS (1) AND AGE DIRECTOR SINCE
- ----------------------------- ------------------------------------ ----------------------------------
Burton D. Morgan Chairman, Morgan Bank (Hudson, Income: 9,548 (2); 1987
Trustee Ohio); President, Basic Search Inc. Equity: 0; 1991
(venture capital); Chairman, Laureate: 0; 1993
Multi-Color Corporation (printing);
Chairman, Morgan Funshares, Inc.
(mutual fund); Age 80.
Michael A. Rossi Certified Public Accountant; Age 42. Income: 0; 1989
Trustee Equity: 608 (2); 1990
Laureate: 0; 1993
Robert A. Schenkelberg, Jr.* President, Entrust Inc. (financial Income: 0; 1986
Trustee planning); Age 52. Equity: 0; 1989
Laureate: 0; 1993
*Mr. Barone is an "interested person" as defined by the Investment Company Act
of 1940 (the "Act") of each Fund by reason of his relationship with Maxus Asset
Management Inc., Maxus Securities Corp and Resource Management Inc. Mr.
Schenkelberg may be deemed to be an "interested person" of each Fund by reason
of the fact that his license as a securities salesman is held by Maxus
Securities Corp.
(1) Shares beneficially owned as of February 27, 1997.
(2) Constitutes less than 1% of outstanding shares.
As of February 27, 1997, all eight officers and Trustees as a group held
the following numbers of shares (and percentages of outstanding shares) of each
Fund: Maxus Income Fund, 187,000 (5.9%); Maxus Equity Fund, 76,129 (3.0%) and
Maxus Laureate Fund, 48,952 (15.6%).
Four meetings of the Board of Trustees of each Fund were held during the
fiscal year ended December 31, 1996. Each incumbent Trustee attended at least
75% of the meetings of the Board of Trustees during the fiscal year.
None of the Funds has a standing audit committee or nominating committee of
the Board of Trustees.
EXECUTIVE OFFICERS
In addition to the Chairman of the Board (Mr. Barone), each Fund has the
following executive officers:
NAME AND POSITION PRINCIPAL OCCUPATION DURING
WITH THE FUNDS (1) PAST FIVE YEARS AND AGE
- ------------------ ----------------------------------------------------------------------
James Onorato, Vice President, Resource Management Inc.; Age 40.
Vice President
Robert W. Curtin, Senior Vice President and Secretary, Maxus Securities Corp.; formerly
Secretary Executive Vice President, Roulston & Company, Inc.; Age 52.
(1) Mr. Onorato has served since 1989 and Mr. Curtin has served since 1994.
COMPENSATION OF TRUSTEES
During the fiscal year ended December 31, 1996, each Fund paid fees
aggregating $1,500 to those of its Trustees who are not interested persons of
Maxus Asset Management Inc. Each such Trustee receives a fee of $100 per Fund
for each Board or shareholders' meeting he attends.
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INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
The investments of each Fund are managed by Maxus Asset Management Inc.
(the "Adviser") pursuant to an Investment Advisory and Administration Agreement
(the "Agreement"). The Agreement provides that as compensation for its services
to each Fund, the Adviser is entitled to receive from the Fund an annual fee of
1% of the first $150,000,000 of such Fund's average daily net asset value and
0.75% of average daily net asset value in excess of $150,000,000, payable
monthly. The Adviser received management fees from each Fund for the fiscal year
ended December 31, 1996, in the following amounts: Maxus Income Fund, $365,045;
Maxus Equity Fund, $365,389; and Maxus Laureate Fund, $21,014.
The Adviser is a wholly-owned subsidiary of Resource Management Inc.
("RMI"). Richard A. Barone, Chairman of each Fund, is the president and majority
shareholder of RMI. Mr. Barone is the principal executive officer (president)
and sole Director of the Adviser.
DISTRIBUTION PLAN AND DISTRIBUTION AGREEMENT
Each Fund has a Plan of Distribution Pursuant to Rule 12b-1 (the "Plan"),
pursuant to which each Fund may bear the expenses of certain activities
primarily intended to result in the sale of Fund shares to the public. Each Fund
is also a party to a Distribution Agreement with MSC, pursuant to which MSC acts
as the distributor for the shares of the Fund. MSC is a wholly-owned subsidiary
of RMI, a corporation controlled by Richard A. Barone, Chairman of the Fund.
Under the Plan, each Fund may expend as much as, but not more than, .50% of
its average net assets annually pursuant to the Plan. Included in such amount
are fees paid to certain persons for advising their clients regarding the
purchase, sale or retention of Fund shares, sometimes referred to as "service
fees", which can range up to .25% (on an annual basis) of the average total net
asset value of Fund shares owned by the clients of such persons.
Pursuant to the Distribution Agreement between each Fund and MSC, MSC has
agreed to hold itself available to receive orders, satisfactory to MSC, for the
purchase of the Fund's shares, to accept such orders on behalf of the Fund as of
the time of receipt of such orders and to transmit such orders to the Fund's
transfer agent as promptly as practicable. The Distribution Agreement (i)
provides for the payment by the Fund to MSC of a distribution fee (the
"Distribution Fee") of .25% of average net assets (payable without regard to the
amount of expenses incurred by MSC) and (ii) authorizes MSC to make payments for
activities and expenses permitted by the Plan, including the payment of service
fees (subject to the .25% limit on service fees described above) and provides
that the Fund shall reimburse MSC for such expenditures, in addition to payment
of the Distribution Fee.
TRANSFER AGENCY, PORTFOLIO PRICING AND RELATED SERVICES
Each Fund has entered into an Administration Agreement with Maxus
Information Systems, Inc. ("MIS"), 28601 Chagrin Boulevard, Cleveland, Ohio
44122, pursuant to which MIS has agreed to act as each Fund's Transfer,
Redemption and Dividend Disbursing Agent and as Administrator of Plans of the
Fund. In addition, each Fund has entered into an Accounting Services Agreement
with MIS, pursuant to which MIS has agreed to provide portfolio pricing and
related services. MIS is a subsidiary of Resource Management Inc., the parent
company of the Adviser. During the fiscal year ended December 31, 1996, the
Funds paid MIS the following amounts under the Administration Agreement and the
Accounting Services Agreement: Maxus Income Fund, $45,749; Maxus Equity Fund,
$46,093; and Maxus Laureate Fund, $13,378.
2. APPOINTMENT OF AUDITORS
The Trustees of each Fund, including a majority of the Trustees who are not
"interested persons" of each Fund, have selected McCurdy & Associates C.P.A.'s,
Inc. to act as auditors for each Fund for the fiscal year ending December 31,
1997. McCurdy & Associates C.P.A.'s, Inc. has advised the Funds that it has no
direct or indirect financial interest in any of the Funds. This selection is
subject to the approval of the shareholders of each Fund at the Annual Meeting.
The enclosed proxy card(s) provide space for instructions directing the
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proxies named therein to vote for or against ratification of the selection. A
representative of McCurdy & Associates C.P.A.'s, Inc. is expected to be present
at the Annual Meeting and will be available to respond to appropriate questions
relating to the examination of each Fund's financial statements and will have an
opportunity to make a statement if so desired.
3. CHANGE IN INVESTMENT POLICY OF MAXUS LAUREATE FUND
Maxus Laureate Fund ("Laureate Fund") has a fundamental investment policy
under which Laureate Fund may not invest in securities of issuers which have a
record of less than three years' continuous operation or which are subject to
restrictions on disposition under the Securities Act of 1933 if, at the time of
such purchase, more than 10% of its assets (taken at value) would be so
invested. As a fundamental investment policy of Laureate Fund, this policy
cannot be changed without approval by the holders of a majority of the
outstanding voting securities of Laureate Fund.
The Board of Trustees of Laureate Fund has proposed an amendment to this
policy which would eliminate the restriction upon investment by Laureate Fund in
issuers which have a record of less than three years continuous operation (the
"unseasoned issuer restriction"). The policy would continue to provide that
Laureate Fund may not invest in securities which are subject to restrictions on
disposition under the Securities Act of 1933 if, at the time of such purchase,
more than 10% of its assets (taken at value) would be so invested.
The unseasoned issuer restriction originally was adopted by Laureate Fund
to comply with securities regulations of the State of Ohio which required such
restriction as a condition to qualifying the shares of Laureate Fund in Ohio. As
a result of recent changes in the federal securities laws, a state is no longer
permitted to impose such restrictions as a condition to qualifying the sale of
mutual fund shares in such state.
Now that the unseasoned issuer restriction is no longer required by state
law, the Adviser has recommended removal of such restriction. As a result of the
proliferation of mutual funds during the last several years, there are many
mutual funds which have been in operation for less than three years. Many of
these mutual funds would be considered appropriate investments for Laureate Fund
were it not for the unseasoned issuer restriction. The unseasoned issuer
restriction therefore prevents Laureate Fund from investing in the shares of
many mutual funds which otherwise would be appropriate investments.
Moreover, the Board of Trustees does not believe that an investment in a
mutual fund having a shorter period of operation is inherently more risky than
one with a longer period of operation. In evaluating the merits and risks of a
mutual fund investment, factors such as the fund's investment objective and the
expertise of its manager are far more important than the fund's period of
operation.
The affirmative vote of at least 67% of the shares of Laureate Fund
represented at the meeting (if more than 50% of the outstanding shares entitled
to vote are represented at the meeting) (or a majority of the outstanding shares
of Laureate Fund, whichever is less), is required to approve this proposal.
The Board of Trustees recommends that this proposal be approved by the
shareholders of Laureate Fund.
BENEFICIAL OWNERSHIP
As of February 27, 1997, the only person known by Maxus Income Fund to be
the beneficial owner of more than 5% of the outstanding shares of such Fund was
Select Restaurant Acquisitions Corp., 30050 Chagrin Boulevard, Pepper Pike, Ohio
44124, which owned 234,394 shares (7.4% of the outstanding shares) as of that
date.
As of February 27, 1997, no person was known by Maxus Equity Fund or Maxus
Laureate Fund to be the beneficial owner of more than 5% of the outstanding
shares of such Fund.
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OTHER MATTERS
The Trustees know of no business to be brought before the meeting except as
set forth above. If, however, any other matters properly come before the
meeting, the persons named in the enclosed proxy card(s) intend to vote on such
matters in accordance with their best judgment.
REVOCATION OF PROXIES
Any person giving a proxy has power to revoke it at any time prior to its
exercise by executing a superseding proxy or by submitting a notice of
revocation to the Secretary of the Funds. In addition, a shareholder present at
the meeting may withdraw his proxy and vote in person. All properly executed and
unrevoked proxies received in time for the meeting will be voted in accordance
with the instructions contained therein. If no specification is made on a proxy,
it will be voted for the election of Trustees and for ratification of the
selection of the independent accountants.
SOLICITATION OF PROXIES
Proxies will be solicited by mail and may also be solicited in person or by
telephone by officers or Trustees of the Funds. The cost of preparing and
mailing this statement and the accompanying proxy card(s) will be borne by the
Funds.
Although neither Ohio law nor the Declaration of Trust or By-laws of the
Funds specifically provide for such matters, the policy and practice of each
Fund is that (i) properly executed proxies that are marked "abstain" or are held
in "street name" by brokers that are not voted on one or more proposals (if
otherwise voted on at least one proposal) will be counted for purposes of
determining whether a quorum has been achieved at the Annual Meeting, and (ii)
abstentions and broker non-votes will not be treated as either a vote for or a
vote against any of the proposals to which such abstention or broker non-vote
applies.
PROPOSALS OF SECURITY HOLDERS
Proposals of shareholders intended to be presented at the Annual Meeting of
the Funds in 1998 must be received by the Funds no later than December 18, 1997
for inclusion in the Funds' proxy statement and form of proxy relating to that
meeting. The mailing address of the Funds is 28601 Chagrin Boulevard, Cleveland,
Ohio 44122.
By order of the Trustees
Robert W. Curtin,
Secretary
March , 1997
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PROXY MAXUS EQUITY FUND PROXY
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 17, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES
The undersigned hereby appoints Richard A. Barone and James Onorato,
and each of them, the proxies of the undersigned with power of
substitution to each of them to vote all shares of Maxus Equity Fund
which the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held at Executive Caterers, 6111 Landerhaven Drive,
Mayfield Heights, Ohio on April 17, 1997 at 6:30 p.m. local time, and any
adjournments thereof.
(1) Election of Trustees: (Instruction: To withhold authority to vote for
any individual nominee strike a line through the nominee's name in
the list below.)
RICHARD A. BARONE, N. LEE DIETRICH, SANFORD A. FOX, D.D.S., BURTON
D. MORGAN, MICHAEL A. ROSSI, ROBERT A. SCHENKELBERG, JR.
(2) Proposal to ratify the selection of McCurdy & Associates C.P.A.'s,
Inc., as auditors for the fiscal year ending December 31, 1997.
(3) In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting including the
election of any person as a Trustee if any of the nominees named
above is unable to serve or for good cause unwilling to serve and
matters incident to the conduct of the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED UPON IN THE MANNER
DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2. PLEASE VOTE PROMPTLY.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE.)
MAXUS EQUITY FUND (CONTINUED FROM THE OTHER SIDE)
(1) ELECTION OF TRUSTEES (2) TO RATIFY THE SELECTION DO YOU PLAN TO ATTEND THE ANNUAL
(Vote for all nominees except as OF McCURDY & ASSOCIATES MEETING
indicated on reverse side.) C.P.A.'S, INC. AS AUDITORS [ ] YES [ ] NO
WITHHOLD
FOR AUTHORITY FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ]
DATED: ,1997
______________________________
______________________________
(Signature of Shareholder(s))
Please sign exactly as
name appears in the box on
the left. When signing as
attorney, executor,
administrator, trustee or
guardian, please give your
title as such. If a
corporation, please sign
in full corporate name by
president or other
authorized officer. If a
partnership, please sign
partnership name by
authorized person. If a
joint account, please
provide both signatures.