◆ SpookStack

ons of all t Adviser ders and icy of the it with the additional 1@ Fund’s ual to. 1% assets of xe Fund’s rest and nent, Inc. coal he dviser. In counting, Jers, THE MUTUAL viser-was. rayable at it Adviser expenses tode {the vesiment eholders Distribu- ributions eliminate imber 31, ihe same following ms. Only eduction iclaima an those = These recent amendments also eliminated the exemption relied upon by the Fund to exempt the dividend payments from nonresident alien withholding requirements. Distributions of net investment income, if any, made to nonresident aliens will be subject to 30% withholding or lower tax treaty rates because such distributions are considered U.S. source income. Currently, the Fund is not required to withhold tax from long-term capital gains distribution paid to nonresident aliens. Because recent amendments to the Code require that the deductibility of the Fund’s investment expenses be determined at the shareholder level, beginning in 1988 a shareholder’s proportionate share of the Fund’s advisory expenses and other expenses of producing income, in addition to the amount actually paid to that shareholder, will be includable in the shareholder's income, alihough the amount of distributions will actually be net of the shareholder's proportionate share of such expenses. Advisory expenses and other expenses of producing income incurred by individuals (and in certain circumstances by estates and trusts) will be deductible only if the taxpayer itemizes his deductions and to the extent such expenses, when aggregated with unreimbursed employee business expenses and other miscellaneous expenses, exceed 2% of the taxpayer's adjusted gross income. So that each shareholder can determine whether his share of the Fund's investment expenses wil be deductible, the Fund will report to each shareholder the amount of the shareholder's proportionate share of the Fund's advisory expenses and other expenses of produci ng income. The foregoing discussion relates only to generally applicable federal income tax provisions. Share- holders should consult their own tax advisors regarding taxes, including state and local taxes, applicable to dividends, distributions and redemptions. : PURCHASE OF SHARES Strategic Distributors, Inc., The Strategic Building, 2030 Royal Lane, Dallas, Texas 75229, is the principal underwriter and distributor of Fund shares. Dr. Leroy S. Brenna is Chairman of the Board and President of Strategic Distributors, Inc. and a Director and Chairman of the Board of the Fund. Mr. John E. Henry is a Vice President of Strategic Distributors, Inc. and a Director of the Fund. Ms. Jerry Sue Ingram is Assistant Secretary-Treasurer of the Fund. Shares of the Fund are offered to investors at the public offering price next computed after receipt of a purchase order. This price is computed once daily on each business day and is the net asset value plus a sales charge. Net asset value is computed as of the close of business on the New York Stock Exchange each day. (See “Determination of Net Asset Value” in the Statement of Additional Information.) Assets are valued at market value or, if the market value is not ascertainable, at fair value as determined in good faith byt the Board of Directors. The sales charge is a variable Percentage of the public offering price as follows: = Reallowance Size of . Sales Charge Safes Charge as te Dealers Transaction as Percentage Percentage of as Percentage at Offering of the Offer- the Net Amount of the Offer- Price ing Price invested ing Price Less than $16,000 . _ 8.50% . 9.3% 7.0% $10,000 but less than $25,000 7.75% 8.5% 6.2% $25,000 but less than $100,000 6.25% 6.7% 5.0% $100,000 but less than $250,000 3.75% | 3.9% 3.0% $250,000 but less than $500,000 : 2.50% 2.6% 2.0% $500,080 or more 1.25% 1.3% 1.0% 8