<PAGE> 1
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 Section 240.14a-12
NATIONWIDE MUTUAL FUNDS
-----------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
---
(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)(1) 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:_____________________________________________________
<PAGE> 2
2) Form, Schedule or Registration Statement No.:_______________________________
3) Filing Party:_______________________________________________________________
4) Date Filed:_________________________________________________________________
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<PAGE> 3
PRELIMINARY
NATIONWIDE MUTUAL FUNDS
THREE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of each Fund of Nationwide Mutual Funds:
Notice is hereby given that the Annual Meeting of Shareholders of each
of the series or portfolios (collectively, the "Funds") of Nationwide Mutual
Funds, an Ohio business trust (the "Trust"), will be held on Wednesday, July 26,
2000, at __:00 a.m., E.D.S.T., at Three Nationwide Plaza, Columbus, Ohio 43215.
The purpose of the Meeting is to consider and act on the following matters:
1. To elect a Board of Trustees;
2. To ratify the selection of KPMG LLP, independent public accountants,
as auditors to be employed by the Trust for the fiscal year ending
October 31, 2000;
3. To amend the fundamental investment policy for each Fund regarding
making loans;
4. To amend the fundamental investment policy for each Fund regarding
commodities and commodities contracts;
5. To amend the fundamental investment policy regarding real estate for
each of Mid Cap Growth Fund, Growth Fund, Nationwide Fund, Bond Fund,
Tax-Free Income Fund, Long-Term U.S. Government Bond Fund, Intermediate
U.S. Government Bond Fund, Money Market Fund, S&P 500 Index Fund,
Morley Capital Accumulation Fund, Morley Enhanced Income Fund, Value
Opportunities Fund, High Yield Bond Fund, Small Cap Index Fund, Mid Cap
Market Index Fund, International Index Fund and Bond Index Fund;
6. To amend the fundamental investment policy regarding borrowing and
issuing senior securities for each of Prestige Large Cap Value Fund,
Prestige Large Cap Growth Fund, Prestige Small Cap Fund, Prestige
Balanced Fund and Prestige International Fund;
7. To amend the fundamental investment policy with respect to
diversification for each of Morley Enhanced Income Fund, Value
Opportunities Fund and High Yield Bond Fund;
8. To approve the reclassification of the fundamental investment
objective(s) as nonfundamental for each of Mid Cap Growth Fund, Growth
Fund, Nationwide Fund, Bond Fund, Tax-Free Income Fund, Long-Term U.S.
Government Bond Fund,
<PAGE> 4
Intermediate U.S. Government Bond Fund, Money Market Fund, S&P 500
Index Fund, Prestige Large Cap Value Fund, Prestige Large Cap Growth
Fund, Prestige Small Cap Fund, Prestige Balanced Fund and Prestige
International Fund;
9. To approve an amendment to the Investment Advisory Agreement between
the Trust, on behalf of the Nationwide Mid Cap Growth Fund, and
Villanova Mutual Fund Capital Trust, as investment adviser to such
Fund, to increase the investment advisory fees for such Fund; and
10. To consider and act upon any matters incidental to the foregoing
and to transact such other business as may properly come before the
Meeting and any adjournment or adjournments thereof.
As a shareholder of record at the close of business of May 12, 2000,
you have the right to direct the persons listed on the enclosed Proxy on how
your shares in the Fund(s) should be voted. To assist you, a Proxy is enclosed
that reflects the number of shares of each Fund you are entitled to vote. In
addition, a Proxy Statement is attached to this Notice and describes the matters
to be voted on at the Meeting or any adjournment(s) thereof.
By Order of the Trustees,
June __, 2000 Elizabeth A. Davin, Secretary
YOUR VOTE IS IMPORTANT
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF A SECOND SOLICITATION, WE URGE YOU
TO COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY. FOR YOUR CONVENIENCE,
THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE.
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<PAGE> 5
PRELIMINARY
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
NATIONWIDE MUTUAL FUNDS
THREE NATIONWIDE PLAZA
COLUMBUS, OHIO 43215
TO BE HELD JULY 26, 2000
GENERAL VOTING INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Trustees of Nationwide Mutual Funds, an Ohio business trust
(the "Trust"), to be used in connection with the Annual Meeting of Shareholders
(the "Meeting") of all series or funds of the Trust (collectively the "Funds")
to be held at __:00 a.m., E.D.S.T., on Wednesday, July 26, 2000. The Meeting
will be conducted at the principal executive offices of the Trust: Three
Nationwide Plaza, Columbus, Ohio 43215. The Trustees have fixed the close of
business on May 12, 2000, as the record date (the "Record Date") for the
determination of shareholders of the Trust entitled to notice of and to vote at
the Meeting.
The approximate date on which this Proxy Statement and forms of proxy
are first sent to shareholders is on or about June __, 2000.
Shareholders of record on the Record Date are entitled to one vote for
each share and a proportionate fractional vote for any fraction of a share as to
each issue on which such shareholders are entitled to vote. The following table
sets forth the number of shares of beneficial interest (the "Shares") of each of
the Funds which were outstanding as of the Record Date and are therefore
entitled to vote at the Meeting:
FUND SHARES OUTSTANDING
---- ------------------
Mid Cap Growth Fund.................................. 878,650
Growth Fund.......................................... 60,337,340
Nationwide Fund...................................... 74,119,319
Bond Fund............................................ 13,278,139
Tax-Free Income Fund................................. 21,998,393
Long-Term U.S. Government Bond Fund.................. 3,115,467
Intermediate U.S. Government Bond Fund............... 10,743,962
Money Market Fund.................................... 1,395,864,845
S&P 500 Index Fund................................... 15,497,405
Morley Capital Accumulation Fund..................... 1,550,611
Morley Enhanced Income Fund.......................... 1,117,075
Prestige Large Cap Value Fund........................ 2,886,837
Prestige Large Cap Growth Fund....................... 3,392,505
Prestige Small Cap Fund.............................. 2,097,419
Prestige Balanced Fund............................... 853,719
<PAGE> 6
Prestige International Fund.......................... 1,397,905
Small Cap Index Fund................................. 2,740
International Index Fund............................. 25,788
Bond Index Fund...................................... 6,346
Mid Cap Market Index Fund............................ 501,087
Investor Destinations Aggressive Fund................ 3,037
Investor Destinations Moderately Aggressive Fund..... 3,000
Investor Destinations Moderate Fund.................. 6,249
Investor Destinations Moderately Conservative Fund... 3,000
Investor Destinations Conservative Fund.............. 3,000
Value Opportunities Fund............................. 188,676
High Yield Bond Fund................................. 10,744,087
Only shareholders of record at the close of business on the Record Date
will be entitled to notice of and to vote at the Meeting. The persons named as
proxies on the enclosed proxy cards will vote the Shares of each Fund at the
Meeting in accordance with the timely instructions received from shareholders.
If a duly executed and dated Proxy is received that does not specify a choice
(for, against or abstain), the persons named as proxies will consider its timely
receipt as an instruction to vote in favor of the proposal(s) to which it
relates. Shareholders may revoke previously submitted proxies at any time prior
to the Meeting by either submitting to the Trust a subsequently dated proxy,
delivering to the Trust a written notice of revocation or otherwise giving
notice of revocation in open Meeting, in all cases prior to the exercise of the
authority granted in the proxy.
THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF THE TRUST'S MOST
RECENT ANNUAL REPORTS TO SHAREHOLDERS AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS,
ONCE AVAILABLE, UPON REQUEST, WHICH REQUEST MAY BE MADE EITHER BY WRITING TO THE
TRUST AT THE ADDRESS ABOVE OR BY CALLING TOLL-FREE (800) 848-0920. THE
APPLICABLE ANNUAL REPORTS AND SEMI-ANNUAL REPORTS WILL BE MAILED TO YOU BY
FIRST-CLASS MAIL WITHIN THREE BUSINESS DAYS OF RECEIPT OF YOUR REQUEST.
At the Meeting, shareholders will be voting either together as a group
without regard to Fund or separately by Fund, depending on the proposal being
considered.
The following table summarizes the proposals on which shareholders are
being asked to vote (singly a "Proposal" and collectively the "Proposals") and
indicates which shareholders are eligible to vote on each Proposal. Proposals 1
and 2 will be voted upon by all Funds as a group; Proposals 3 and 4 will be
voted upon by all Funds voting individually by Fund; Proposals 5, 6, 7 and 8
will be voted upon by only those Funds to which they specifically relate, voting
individually by Fund; and Proposal 9 will be voted upon only by the shareholders
of the Mid Cap Growth Fund.
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<PAGE> 7
<TABLE>
<CAPTION>
- ---------------------------------- ----------------------------------------- -----------------------------------------
PROPOSAL BRIEF DESCRIPTION OF PROPOSAL SHAREHOLDERS WHO WILL VOTE ON THE
-------- ----------------------------- ---------------------------------
PROPOSAL
--------
- ---------------------------------- ----------------------------------------- -----------------------------------------
<S> <C> <C>
Proposal 1 To elect a Board of Trustees Shareholders of all Funds voting
together as a group
- ---------------------------------- ----------------------------------------- -----------------------------------------
Proposal 2 To ratify the selection of KPMG LLP as Shareholders of all Funds voting
auditors together as a group
- ---------------------------------- ----------------------------------------- -----------------------------------------
Proposal 3 To amend the fundamental investment Shareholders of all Funds Voting
policy regarding making loans for each Separately by Fund
Fund
- ---------------------------------- ----------------------------------------- -----------------------------------------
Proposal 4 To amend the fundamental investment Shareholders of all Funds Voting
policy regarding commodities and Separately by Fund
commodities contracts for each Fund
- ---------------------------------- ----------------------------------------- -----------------------------------------
Proposal 5 To amend the fundamental investment Shareholders of Such Funds Voting
policy regarding real estate for each Separately by Fund
of the following Funds:
o Mid Cap Growth Fund
o Growth Fund
o Nationwide Fund
o Bond Fund
o Tax-Free Income Fund
o Long-Term U.S. Government Bond Fund
o Intermediate U.S. Government Bond Fund
o Money Market Fund
o S&P 500 Index Fund
o Morley Capital Accumulation Fund
o Morley Enhanced Income Fund
o Value Opportunities Fund
o High Yield Bond Fund
o Small Cap Index Fund
o Mid Cap Market Index Fund
o International Index Fund
o Bond Index Fund
- ---------------------------------- ----------------------------------------- -----------------------------------------
Proposal 6 To amend the fundamental investment Shareholders of Such Funds Voting
policy regarding borrowing and issuing Separately by Fund
senior securities for each of:
- ---------------------------------- ----------------------------------------- -----------------------------------------
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
- ---------------------------------- ----------------------------------------- -----------------------------------------
<S> <C> <C>
o Mid Cap Growth Fund
o Growth Fund
o Nationwide Fund
o Bond Fund
o Tax-Free Income Fund
o Long-Term U.S. Government Bond Fund
o Intermediate U.S. Government Bond Fund
o Money Market Fund
o S&P 500 Index Fund
o Morley Capital Accumulation Fund
o Prestige Large Cap Value Fund
o Prestige Large Cap Growth Fund
o Prestige Small Cap Fund
o Prestige Balanced Fund
o Prestige International Fund
- ---------------------------------- ----------------------------------------- -----------------------------------------
Proposal 7 To amend the fundamental investment Shareholders of Such Funds Voting
policy with respect to diversification Separately by Fund
for each of the following Funds:
o Morley Enhanced Income Fund
o Value Opportunities Fund
o High Yield Bond Fund
- ---------------------------------- ----------------------------------------- -----------------------------------------
Proposal 8 To approve the reclassification of the Shareholders of Such Funds Voting
fundamental investment objective(s) as Separately by Fund
nonfundamental for each of the
following Funds:
o Mid Cap Growth Fund
o Growth Fund
o Nationwide Fund
o Bond Fund
o Tax-Free Income Fund
o Long-Term U.S. Government Bond Fund
o Intermediate U.S. Government Bond Fund
o Money Market Fund
- ---------------------------------- ----------------------------------------- -----------------------------------------
</TABLE>
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<PAGE> 9
<TABLE>
<CAPTION>
- ---------------------------------- ----------------------------------------- -----------------------------------------
<S> <C> <C>
o S&P 500 Index Fund
o Prestige Large Cap Value Fund
o Prestige Large Cap Growth Fund
o Prestige Small Cap Fund
o Prestige Balanced Fund
o Prestige International Fund
- ---------------------------------- ----------------------------------------- -----------------------------------------
Proposal 9 To approve an amendment to the Shareholders of the Mid Cap Growth Fund
investment advisory agreement between only
the Trust, on behalf of the Mid Cap
Growth Fund, and Villanova Mutual Fund
Capital Trust to increase the
investment advisory fees for such Fund
- ---------------------------------- ----------------------------------------- -----------------------------------------
</TABLE>
The Trust knows of no business other than that mentioned in Proposals 1
through 9 as described above which will be presented for consideration at the
Meeting. If any other matters are properly presented, it is the intention of the
persons named on the enclosed proxy card to vote proxies in accordance with
their best judgment. Whether or not a quorum is present at the Meeting, in the
event sufficient votes to approve each of the Proposals are not received, the
persons named as proxies may vote to approve those Proposals for which
sufficient votes have been received and may propose one or more adjournments of
the Meeting to permit further solicitation of proxies for those Proposals for
which sufficient votes have not been received, provided they determine that such
an adjournment and additional solicitation is reasonable and in the interest of
shareholders.
PROPOSAL 1 - ELECTION OF TRUSTEES
It is the present intention that the proxies will be used for the
purposes of voting in favor of the election of each of the following nominees as
Trustee to hold office until the next meeting of shareholders and until his or
her successor is elected and qualified. Each of the nominees (except for Messrs.
Allen, Hondros and Gasper, Ms. Cholmondeley and Ms. Hennigar) presently is a
Trustee of the Trust. Pursuant to Rule 14a-4(d) under the Securities Exchange
Act of 1934, as amended, each nominee has consented to be named in this Proxy
Statement and to serve if elected. It is not expected that any of the nominees
will decline or become unavailable for election, but in case this should happen,
the discretionary power given in the proxy may be used to vote for a substitute
nominee or nominees.
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<PAGE> 10
<TABLE>
<CAPTION>
NAME, AGE
AND POSITION PRINCIPAL OCCUPATION(S) A TRUSTEE OF
WITH THE TRUST DURING PAST FIVE YEARS THE TRUST SINCE
- -------------- ----------------------- ---------------
<S> <C> <C>
Charles E. Allen Mr. Allen has been Chairman, Chief Executive Not currently a Trustee
Age 52 Officer and President of the Graimark family
of companies since 1988 (real estate development,
investment and asset management).
Paula H. J. Cholmondeley Ms. Cholmondeley has been Vice President and Not currently a Trustee
Age 50 General Manager of Specialty Products at Sappi
Fire Paper North America since 1998. From 1992 to
1998, she held various positions with Owens Corning,
including Vice President & General Manager of the
Residential Insulation Division (1997 to 1998),
President of the MIRAFLEX Fibers Division (1994 to
1997), and Vice President of Business Development
and Global Sourcing (1992 to 1994).
C. Brent DeVore Mr. DeVore has been President of Otterbein 1998
Age 59 College since 1984.
Trustee
Robert M. Duncan Mr. Duncan has been a member of the Ohio Elections 1998
Age 72 Commission since 1996. He was formerly Vice
Trustee President and General Counsel of The Ohio State
University and Secretary to the Board of Trustees
of The Ohio State University from 1992 to 1996.
*Joseph J. Gasper Mr. Gasper has been Director, President and Chief Not currently a Trustee
Age 56 Operating Officer of Nationwide Life Insurance
Company since April 1996. Prior to that and since
August 1992, he was Executive Vice President and
Senior Vice President for Nationwide Insurance.
</TABLE>
-6-
<PAGE> 11
<TABLE>
<CAPTION>
<S> <C> <C>
Barbara Hennigar Ms. Hennigar has been Chairman of OppenheimerFunds Not currently a Trustee
Age 64 Services and Shareholder Services Inc, since
October, 1999. Prior to that and since July 1992,
she served as President and Chief Executive Officer
of OppenheimerFunds Services.
*Paul J. Hondros Mr. Hondros has been President and Chief Executive Not currently a Trustee
Age 51 Officer of Villanova Mutual Fund Capital Trust,
Villanova Capital, Inc. and Villanova SA Trust
since 1999. From October 1997 through October 1998,
Mr. Hondros served as President and Chief Operations
Officer of Pilgrim Baxter and Associates, Ltd.
(investment management firm) and its affiliated
fixed income investment management arm, Pilgrim
Baxter Value Investors, Inc. and as Executive Vice
President to the PBHG Funds, PBHG Insurance Series
Funds and PBHG Adviser Funds. Prior thereto, he
served and President and Chief Operating Officer of
Fidelity Investments Retail Group from 1996 through
1997 and as President and Chief Executive Officer
of Fidelity Investments Institutional Services Co.
from 1990 through 1997.
Dr. Thomas J. Kerr, IV Dr. Kerr has been President Emeritus of Kendall 1998
Age 66 College located in Evanston, Illinois since 1996.
Trustee He was formerly President of Kendall College.
Douglas F. Kridler Mr. Kridler has been President and Executive Director 1998
Age 44 of CAPA (the Columbus Association for the Performing
Trustee Arts) since 1984.
*Dimon R. McFerson Mr. McFerson has been President and Chief Executive 1998
Age 63 Officer of the Nationwide Insurance and Chief
Chairman and Trustee Executive Officer of Nationwide Advisory Services,
Inc. since December 1992.
*Arden L. Shisler Mr. Shisler has been President and Chief Executive 2000
Age 58 Officer of K&B Transport, Inc., a trucking firm,
Trustee since January 1992.
</TABLE>
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<PAGE> 12
<TABLE>
<CAPTION>
<S> <C> <C>
David C. Wetmore Mr. Wetmore has been the Managing Director of The 1998
Age 52 Update Capital, a venture capital firm, since 1995.
Trustee
</TABLE>
- ----------------------------
* Messrs. Gasper, Hondros, McFerson and Shisler are each considered an
"interested person" of the Trust, as that term is defined in Section 2(a)(19) of
the Investment Company Act of 1940, as amended (the "1940 Act").
Except for Messrs. Allen, Hondros, and McFerson, Ms. Cholmondeley and
Ms. Hennigar, each nominee for Trustee is also currently a trustee of Nationwide
Separate Account Trust ("NSAT") and of Nationwide Asset Allocation Trust
("NAAT"). NSAT and NAAT are registered investment companies.
During the fiscal year ended October 31, 1999, no Trustee or officer
who is an officer of VMF or of any of its affiliates or is affiliated with any
subadviser for any of the Funds received any direct remuneration from the Trust
for serving in such capacities.
A plurality of the votes cast at a meeting of shareholders at which a
quorum is present is required for the election of Trustees.
FURTHER INFORMATION REGARDING THE TRUSTEES AND EXECUTIVE OFFICERS
The following table sets forth information on beneficial ownership of
Shares of the Funds held by each Trustee, nominee for Trustee and executive
officer of the Trust as of May 12, 2000.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
SHARES OF FUND
NAME OF FUND AND BENEFICIALLY (AND
CLASS OF SHARES NAME AND ADDRESS OF BENEFICIAL OWNER OWNED* CLASS)
- --------------- ------------------------------------ ------ -----
<S> <C> <C> <C>
</TABLE>
- ----------------------------
* Shares are held by the Nationwide Insurance Enterprise Savings Plan for the
benefit of the person shown.
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<PAGE> 13
As of May 12, 2000, the Trustees and executive officers of the Trust as
a group owned beneficially fewer than 1% of the outstanding Shares of the Trust
or of any of the Funds.
During the fiscal year ended October 31, 1999, the Trust's Board of
Trustees held five meetings. Other than Mr. McFerson, each of the current
Trustees attended at least 75% of those meetings. Messrs. Allen, Hondros, Gasper
and Shisler, Ms. Chomondeley and Ms. Hennigar were not trustees of the Trust
during that period.
The following table sets forth information regarding all compensation
paid by the Trust to its Trustees for their services as such during the fiscal
year ended October 31, 1999. The Trust has no pension or retirement plans.
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE FROM THE TRUST
NAME AND POSITION COMPENSATION AND THE FUND
WITH THE TRUST FROM THE TRUST COMPLEX*
- -------------- -------------- --------
<S> <C> <C>
Dr. John C. Bryant(1) $ 9,167 $18,167
Trustee
C. Brent DeVore $ 9,167 $18,167
Trustee
Sue A. Doody(1) $ 9,167 $18,167
Trustee
Robert M. Duncan $ 9,167 $18,167
Trustee
Charles L. Fuellgraf, Jr.(4) $ 7,500 $ 7,500
Trustee
Thomas J. Kerr IV $ 9,167 $18,167
Trustee
Douglas F. Kridler $ 9,167 $18,167
Trustee
Dimon R. McFerson $ 0 $ 0
Trustee
Arden L. Shisler(2) $ 0 $ 0
Trustee
Nancy C. Thomas(3) $11,666 $11,666
Trustee
Harold W. Weihl(4) $ 7,500 $ 7,500
Trustee
David W. Wetmore $ 9,167 $18,167
Trustee
</TABLE>
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<PAGE> 14
* For purposes of this Table, Fund Complex means one or more mutual funds which
have a common investment adviser or affiliated investment advisers or which hold
themselves out to the public as being related and means here NSAT and NAAT, as
well as the Trust.
(1) Dr. Bryant and Ms. Doody are not standing for re-election as Trustees
of the Trust at the Meeting.
(2) Mr. Shisler was appointed to the Board of Trustees on February 9, 2000.
(3) Ms. Thomas retired from her position as Trustee of the Trust as of
January 3, 2000.
(4) Messrs. Fuellgraph and Weihl retired from their positions as Trustees
of the Trust as of ______, 1999.
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers of the Trust:
<TABLE>
<CAPTION>
NAME, AGE AND AN OFFICER
POSITION WITH PRINCIPAL OCCUPATION OF THE
THE TRUST DURING THE PAST FIVE YEARS TRUST SINCE
- --------- -------------------------- -----------
<S> <C> <C>
Dimon R. McFerson Mr. McFerson has been President and Chief May, 1998
Age 63 Executive Officer of the Nationwide
Chairman and Trustee Insurance and Chief Executive Officer of
Nationwide Advisory Services, Inc. since
December 1992.
James F. Laird, Jr. Since May 2000, Mr. Laird has been Senior May, 1998
Age 43 Vice President - Product Development for
Treasurer Villanova Capital, Inc., Villanova Mutual
Fund Capital Trust and Villanova SA
Capital Trust. In addition, since April,
1995, Mr. Laird has been Vice President--
General Manager of Nationwide Advisory
Services, Inc.
</TABLE>
The executive officers of the Trust are elected by the Board of
Trustees and hold office until their respective successors are duly elected.
None of the officers of the Trust receives compensation from the Trust for
serving as an officer.
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<PAGE> 15
PROPOSAL 2 - RATIFICATION OF SELECTION OF AUDITORS
The Board of Trustees of the Trust, including a majority of the Board
of Trustees who are not "interested persons" of the Trust, on May 5, 2000,
approved the selection of KPMG LLP as the auditors of the Trust for the fiscal
year ending October 31, 2000. Unless instructed in the Proxy to the contrary,
the persons named therein intend to vote in favor of the ratification of the
selection of KPMG LLP as auditors of the Trust to serve for the fiscal year
ending October 31, 2000.
Shareholders of all Funds of the Trust will vote jointly on the
proposal to ratify the selection of KPMG LLP as auditors of the Trust to serve
for the fiscal year ending October 31, 2000. Ratification requires the
affirmative vote of a majority of the Shares of the Trust who are present at the
Meeting in person or by proxy.
A representative of KPMG LLP will be available by telephone during the
Meeting with an opportunity to make a statement if the representative desires to
do so and to respond to appropriate questions.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 2.
PROPOSALS 3-7 - ADOPTION OF STANDARDIZED INVESTMENT POLICIES REGARDING
MAKING LOANS, COMMODITIES AND COMMODITIES CONTRACTS, REAL ESTATE,
BORROWING, ISSUING SENIOR SECURITIES AND DIVERSIFICATION
The primary purpose of the Proposals 3 through 7, as more fully
described below, is to revise several of the fundamental investment policies for
certain of the Funds to conform to policies which are currently, or are expected
to become, standard for all Funds of the Trust and, in some cases, for all of
the funds of NSAT, another investment company managed by VMF. VMF believes that
increased standardization will promote operating efficiencies and facilitate the
monitoring of compliance with such fundamental investment policies by
eliminating ambiguities, clarifying the Funds' investment policy limitations and
establishing uniformity among the Funds of the Trust.
Revision of the following fundamental investment policies is not
expected to have any material impact on the investment techniques employed by
any of the Funds at this time. However, VMF and the Trust believe that the
revisions will contribute to the overall objective of standardization.
The 1940 Act requires that a Fund's investment policies relating to
certain matters, including loans, commodities, real estate, borrowing and
diversification, be "fundamental" - meaning that such policies may NOT be
amended without the approval of a majority of that Fund's outstanding Shares.
For purposes of the 1940 Act, approval of a majority of a Fund's outstanding
Shares means the lesser of (a) 67% or more of the outstanding Shares of the Fund
present at the Meeting, if holders of more than 50% of the Shares are present or
presented by proxy, or (b) more than 50% of the Shares of that Fund.
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<PAGE> 16
If Proposals 3 through 7 are adopted, the fundamental policies of some
or all of the Funds relating to loans, commodities, real estate, borrowing,
issuing senior securities and diversification, as described more fully below,
will change. Shareholders of the Funds will be voting on Proposals 3 through 7
individually and not as a group. Therefore, whether a Proposal is approved or
not approved by shareholders of a particular Fund will not affect whether or not
such Proposal is approved by shareholders of another Fund. If a Proposal is not
approved for a particular Fund, that fundamental policy will remain unchanged
from its current version.
PROPOSAL 3 - AMENDMENT OF FUNDAMENTAL POLICY REGARDING LOANS
This table sets forth the current policies regarding loans for each of
the Funds and the policy on loans as proposed to be adopted by shareholders of
each Fund.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------- --------------------------------------------
FUND AND ITS CURRENT POLICY PROPOSED POLICY (FOR ALL FUNDS)
- ------------------------------------------------------------------------- --------------------------------------------
<S> <C>
o Mid Cap Growth Fund
o Growth Fund May not lend any security or make any
o Nationwide Fund other loan, except that each Fund may in
o Bond Fund accordance with its investment objective
o Tax-Free Income Fund and policies (i) lend portfolio
o Long-Term U.S. Government Bond Fund securities, (ii) purchase and hold debt
o Intermediate U.S. Government Bond Fund securities or other debt instruments,
o Money Market Fund including but not limited to loan
o S&P 500 Index Fund participations and subparticipations,
o Morley Capital Accumulation Fund assignments, and structured securities,
o Value Opportunities Fund (iii) make loans secured by mortgages on
o High Yield Bond Fund real property, (iv) enter into repurchase
o Morley Enhanced Income Fund agreements, and (v) make time deposits
o Small Cap Index Fund with financial institutions and invest in
o Mid Cap Market Index Fund instruments issued by financial
o International Index Fund institutions, and enter into any other
o Bond Index Fund: lending arrangement as and to the extent
permitted by the Investment Company Act of
1940 or any rule, order or interpretation
thereunder.
May not lend any security or make any other loan, except that
each Fund may purchase or hold debt securities and lend
portfolio securities in accordance with its investment
objective and policies, make time deposits with financial
institutions and enter into repurchase agreements.
o Large Cap Value Fund
o Large Cap Growth Fund
o Balanced Fund
o Small Cap Fund
o International Fund:
May not lend any security or make any other loan except that
each Fund may, in accordance with its investment objectives
and policies, (i) lend portfolio securities, (ii) purchase
debt securities or other debt instruments, including but not
limited to loan participations and subparticipations,
assignments, and structured securities, (iii) make loans
secured by mortgages on real property, (iv) enter into
repurchase agreements, and (v) make time deposits with
financial institutions and invest in instruments issued by
financial institutions.
- ------------------------------------------------------------------------- --------------------------------------------
</TABLE>
-12-
<PAGE> 17
The current and proposed policies on loans permit each Fund to lend
portfolio securities in accordance with its investment objectives and policies,
purchase or hold debt securities, make time deposits with banks and enter into
repurchase agreements. The significant difference between the current policies
and the proposed policy is that the proposed policy expands lending activities
of the Funds to include any other lending arrangement permitted under the 1940
Act or any rule, order or interpretation thereunder.
The Trust and VMF are not aware of any investment techniques that a
Fund might use to pursue its investment objective(s) that are not within the
current policy. However, in the future new financial products may be developed
in which a Fund may want to invest. Such products might fall outside the scope
of the current policy. Therefore, the proposed policy is intended to give the
Funds greater flexibility to enter into lending arrangements of any sort so long
as such arrangements are consistent with the applicable Fund's investment
objectives and stated policies and are permitted under the 1940 Act and the
SEC's interpretations thereof.
As is currently required, to the extent a Fund uses an investment
technique or enters into an arrangement which may involve the Fund "making a
loan," such policy and the related risks will be described in that Fund's
current prospectus and/or statement of additional information.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 3.
PROPOSAL 4 - AMENDMENT OF FUNDAMENTAL POLICY REGARDING COMMODITIES AND
COMMODITIES CONTRACTS
This table sets forth the current policies regarding commodities and
commodities contracts for each of the Funds and the policy on commodities and
commodities contracts as proposed to be adopted by shareholders of each Fund.
The type of commodities contracts most commonly used by the Funds are futures
contracts on securities and securities indices and forward currency contracts.
-13-
<PAGE> 18
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------ ---------------------------------------------
FUND AND ITS CURRENT POLICY PROPOSED POLICY (FOR ALL FUNDS)
- ------------------------------------------------------------------------ ---------------------------------------------
<S> <C>
o Mid Cap Growth Fund
o Growth Fund May not purchase or sell commodities or
o Nationwide Fund commodities contracts, except to the extent
o Bond Fund disclosed in the current Prospectus or
o Tax-Free Income Fund Statement of Additional Information of the
o Long-Term U.S. Government Bond Fund Fund.
o Intermediate U.S. Government Bond Fund
o Money Market Fund
o S&P 500 Index Fund
o Prestige Large Cap Value Fund
o Prestige Large Cap Growth Fund
o Prestige Balanced Fund
o Prestige Small Cap Fund
o Prestige International Fund
o Morley Capital Accumulation Fund:
May not purchase or sell commodities or commodities contracts,
except to the extent disclosed in the current Prospectus of
such Fund.
o Value Opportunities Fund
o High Yield Bond Fund
o Morley Enhanced Income Fund
o Small Cap Index Fund
o Mid Cap Market Index Fund
o International Index Fund
o Bond Index Fund:
May not purchase or sell commodities or commodities contracts,
except to the extent disclosed in the current Prospectus and
Statement of Additional Information of such Fund.
- ------------------------------------------------------------------------ ---------------------------------------------
</TABLE>
The current and proposed policies each permit the Funds to enter into
contracts which may be considered to be commodities contracts (e.g., futures
contracts on securities or securities indices). The significant difference
between the current and proposed policies is where the disclosure regarding a
Fund's use of commodities is required to be made. Under the current policy, such
disclosure must be in the Prospectus, and, for some Funds, also in the Statement
of Additional Information.
Recently the SEC amended its rules governing the Funds' disclosure
obligations in their Prospectuses. Under these new Rules, only those investment
techniques that are "principal" to a Fund are to be disclosed in the Prospectus.
Non-principal investment techniques are to be disclosed in the Fund's Statement
of Additional Information. The proposed policy, if adopted will allow a Fund to
disclose its use of futures contracts (and other techniques which may be
considered "commodities") in either its Prospectus or its Statement of
Additional Information depending upon whether such technique is a principal or
non-principal technique of the Fund.
-14-
<PAGE> 19
Therefore, the proposed policy changes are to make the disclosure requirements
for the Funds the same and to help the Funds comply with their disclosure
obligations under the SEC's Rules.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 4.
PROPOSAL 5 - AMENDMENT OF FUNDAMENTAL POLICY REGARDING REAL ESTATE
This table sets forth the current policies regarding real estate for
certain of the Funds and the policy on real estate as proposed to be adopted by
the shareholders of such Funds.
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
FUND AND ITS CURRENT POLICY PROPOSED POLICY (FOR ALL SUCH FUNDS)
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
o Mid Cap Growth Fund
o Growth Fund May not purchase or sell real estate, except that each
o Nationwide Fund Fund may (i) acquire real estate through ownership of
o Bond Fund securities or instruments and sell any real estate
o Tax-Free Income Fund acquired thereby, (ii) purchase or sell instruments
o Long-Term U.S. Government Bond Fund secured by real estate (including interests therein),
o Intermediate U.S. Government Bond Fund and (iii) purchase or sell securities issued by
o Money Market Fund entities or investment vehicles that own or deal in
o S&P 500 Index Fund real estate (including interests therein).
o Morley Capital Accumulation Fund
o Value Opportunities Fund
o High Yield Bond Fund
o Morley Enhanced Income Fund
o Small Cap Index Fund
o Mid Cap Market Index Fund
o International Index Fund
o Bond Index Fund:
May not purchase or sell real estate, except that
each Fund may acquire real estate through
ownership of securities or instruments and may
purchase or sell securities issued by entities or
investment vehicles that own or deal in real
estate (including interests therein) or
instruments secured by real estate (including
interests therein).
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
The significant difference between the current policy and the proposed
policy is that the proposed policy clarifies a Fund's ability to sell any real
estate that it acquires as a result of its ownership of securities secured by
real estate. While no Fund anticipates that it would ever own real estate
outright as a result of its ownership of a security, if it were to so own real
estate, such Fund would need to be able to sell such real estate promptly.
-15-
<PAGE> 20
The proposed changes for the above listed Funds will conform this
investment policy to that of the Trust's other Funds.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 5.
PROPOSAL 6 - AMENDMENT TO FUNDAMENTAL POLICY REGARDING BORROWING MONEY AND
ISSUING SENIOR SECURITIES
This table sets forth the current policy regarding borrowing money and
issuing senior securities for the Prestige Funds of the Trust and such policy as
proposed to be adopted by shareholders of the Prestige Funds.
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
FUND AND ITS CURRENT POLICY PROPOSED POLICY (FOR ALL SUCH FUNDS)
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
o Large Cap Value Fund
o Large Cap Growth Fund
o Balanced Fund
o Small Cap Fund May not borrow money or issue senior securities, except
o International Fund: that each Fund may enter into reverse repurchase
agreements and may otherwise borrow money and issue
May not borrow money or issue senior securities, senior securities as and to the extent permitted by the
except that each Fund may enter into reverse 1940 Act or any rule, order or interpretation thereunder.
repurchase agreements and may otherwise borrow money
and issue senior securities as and to the extent
permitted by the 1940 Act or any rule, order or
interpretation thereunder. In addition, each of the
Large Cap Value, Large Cap Growth, Balanced, Small Cap
and International Funds may enter into mortgage dollar
roll transactions.
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
The significant change proposed to the policy regarding borrowing money
or issuing senior securities is to delete the specific reference to the Prestige
Funds' ability to enter into mortgage dollar roll transactions. The Trust
recognizes that mortgage dollar roll transactions may be considered to be a
"borrowing" by a Fund. However, the Trust and VMF believe that a Prestige Fund's
ability to enter into dollar roll transactions is already permitted by the
language that each Fund "may otherwise borrow money and issue senior securities
as and to the extent permitted by the 1940 Act." This specific reference to
mortgage dollar roll transactions does, though, create an ambiguity as to the
intent of the Trust as to the ability of the other Funds to enter into such
transactions. The Trust believes that the other Funds do have the ability to
enter into mortgage dollar roll transactions in the absence of this specific
reference. By deleting this specific reference, any inadvertent ambiguity is
removed.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 6.
-16-
<PAGE> 21
PROPOSAL 7 - AMENDMENT TO FUNDAMENTAL POLICY REGARDING DIVERSIFICATION
The following table sets for the current policy on diversification for
each of the Value Opportunities Fund, High Yield Bond Fund and Morley Enhanced
Income Fund and the proposed policy for such Funds on diversification.
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
FUND AND ITS CURRENT POLICY PROPOSED POLICY (FOR ALL SUCH FUNDS)
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
o Value Opportunities Fund
o High Yield Bond Fund
o Morley Enhanced Income Fund:
May not purchase securities of any one issuer, other
May not purchase securities of one issuer, other than than obligations issued or guaranteed by the U.S
obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities, if,
Government, its agencies or instrumentalities, so immediately after such purchase, more than 5% of the
that (a) more than 5% of the Fund's total assets Fund's total assets would be invested in such issuer
(taken at current value) would be invested in such or the Fund would hold more than 10% of the outstanding
issuer (except that up to 75% of the Fund's total voting securities of the issuer, except that 25% or
assets may be invested without regard to such 5% less of the Fund's total assets may be invested without
limitation), and (b) more than 25% of its total regard to such limitations. There is no limit to the
assets (taken at current value) would be invested percentage of assets that may be invested in U.S.
in securities of a single issuer. There is no limit Treasury bills, notes, or other obligations issued or
to the percentage of assets that may be invested in guaranteed by the U.S. Government, its agencies or
U.S. Treasury bills, notes, or other obligations instrumentalities.
issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. (This restriction does
not apply to Funds described as nondiversified in the
Prospectus.)
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
Each of these Funds currently operates as a diversified fund within the
meaning of the 1940 Act. However, the current policy inadvertently does not
follow the exact definition of a "diversified" company as set forth in the 1940
Act. Therefore, the proposed amendment would conform the diversification policy
of these Funds to the specific language of the 1940 Act and to the
diversification policy of the other diversified Funds of the Trust.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 7.
PROPOSAL 8 - RECLASSIFICATION OF THE FUNDAMENTAL INVESTMENT OBJECTIVE(S) AS
NON-FUNDAMENTAL OF EACH OF THE MID CAP GROWTH FUND, GROWTH FUND,
NATIONWIDE FUND, BOND FUND, TAX-FREE INCOME FUND, LONG-TERM U.S.
GOVERNMENT BOND FUND, INTERMEDIATE U.S. GOVERNMENT BOND FUND, MONEY
MARKET FUND, S&P 500 INDEX FUND, PRESTIGE LARGE CAP VALUE FUND, PRESTIGE
LARGE CAP GROWTH FUND, PRESTIGE SMALL CAP FUND, PRESTIGE BALANCED FUND AND
PRESTIGE INTERNATIONAL FUND
-17-
<PAGE> 22
The investment objective or objectives for each of the Funds listed
above are "fundamental," meaning that they may not be amended, in whole or in
part, without prior shareholder approval. By reclassifying the fundamental
investment objectives of each of these Funds as non-fundamental, the Trustees of
the Trust will be able to change such a Fund's investment objective without
shareholder approval.
The investment objectives of these Funds are as follows:
<TABLE>
<CAPTION>
FUND INVESTMENT OBJECTIVE
---- --------------------
<S> <C>
Mid Cap Growth Fund Long-term capital appreciation
Growth Fund Long-term capital appreciation
Nationwide Fund Total return through a flexible combination of current
income and capital appreciation
Bond Fund As high a level of current income as is consistent with
preservation of capital
Tax-Free Income Fund As high a level of current income that is exempt from
federal income taxes as is consistent with the preservation
of capital through investing in investment-grade municipal
obligations.
Long-Term U.S. Government Bond Fund As high a level of current income as is consistent with
preservation of capital
Intermediate U.S. Government Bond Fund As high a level of current income as is consistent with
preservation of capital
Money Market Fund As high a level of current income as is consistent with
preservation of capital and maintenance of liquidity
S&P 500 Index Fund To provide investment results that correspond to the
price and yield performance of publicly traded common
stocks, as represented by the Standard & Poor's 500
Composite Stock Price Index
Prestige Large Cap Value Fund To maximize total return, consisting of both capital
appreciation and current income
Prestige Large Cap Growth Fund Long-term capital appreciation
Prestige Small Cap Fund Long-term capital appreciation
</TABLE>
-18-
<PAGE> 23
<TABLE>
<CAPTION>
<S> <C>
Prestige Balanced Fund High total return from a diversified portfolio of
equity and fixed income securities
Prestige International Fund Long-term capital appreciation
</TABLE>
VMF recommended to the Trustees that the investment objectives of each
of these Funds be reclassified as non-fundamental to provide VMF greater
flexibility and latitude in managing such Funds. If the investment objectives
are reclassified as non-fundamental, the Board of Trustees of the Trust will be
able to amend such objectives without shareholder approval.
VMF does not currently anticipate recommending to the Trust's Board of
Trustees that any of the investment objectives be modified. However, the Trust's
recent policy when creating new funds is to have the investment objectives be
non-fundamental, as is the case with the Morley Capital Accumulation Fund, the
Morley Enhanced Income Fund, and the Investor Destinations Series. The Trust
changed its policy about making investment objectives fundamental for these
newer Funds because of changes in the federal securities laws which no longer
require investment companies, such as the Trust, to comply with substantive
state regulations. Previous state securities regulations had encouraged
investment companies to adopt fundamental investment objectives. This
flexibility permits VMF to recommend to the Board, and the Board to approve,
modifications to a Fund's investment objectives without the Trust's incurring
the expense and time associated with calling a special shareholder's meeting and
soliciting proxies from shareholders. VMF may make such a recommendation in
order to modify an objective to address changing market conditions. An example
of a changing market condition might be significantly fewer available dividend
paying stocks within a Fund's target range making an objective of current income
more difficult for portfolios of equity securities. VMF could also recommend to
the Trust's Board of Trustees that a Fund's investment objective be changed
completely if it believes that such change would be in the best interests of the
Fund's shareholders.
In the event the Board of Trustees ever approves a material change to a
Fund's non-fundamental investment objective, the Trust will provide prior
written notice of the change to shareholders of that Fund.
Approval of the reclassification of a Fund's fundamental investment
objective as non-fundamental requires the affirmative vote of a majority of the
outstanding Shares of that Fund, as defined above. If the Proposal is not
approved by shareholders of a particular Fund, the current investment objective
will remain fundamental for that Fund.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 8.
PROPOSAL 9 - AMENDMENT TO THE INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST, ON BEHALF OF THE MID CAP GROWTH FUND, AND VILLANOVA
MUTUAL FUND CAPITAL TRUST, AS INVESTMENT ADVISER TO SUCH FUND,
TO INCREASE THE INVESTMENT ADVISORY FEE FOR SUCH FUND
-19-
<PAGE> 24
INTRODUCTION
The Trust, on behalf of the Mid Cap Growth Fund, initially entered into
an Investment Advisory Agreement with Nationwide Advisory Services, Inc. ("NAS")
on May 9, 1998; on September 1, 1999, the investment advisory services being
performed by NAS for the Fund were transferred to VMF, which is under common
control with NAS. Shareholder approval was not required in order to transfer the
investment advisory services from NAS to VMF because such transfer did not
result in a change in the actual control or management of the Fund's investment
adviser. Pursuant to the Investment Advisory Agreement, VMF manages the
investments of the Mid Cap Growth Fund and supervises the Fund's daily business
affairs, subject to the supervision and direction of the Board of Trustees.
For services rendered and expenses assumed under the Investment
Advisory Agreement, VMF currently is entitled to receive a fee computed daily
and paid monthly based upon the following annual rates:
0.60% on assets up to $250 million
0.0575% on assets of $250 million and more but less than $1 billion
0.55% on assets of $1 billion and more but less than $2 billion
0.525% on assets of $2 billion and more but less than $5 billion
0.50% on assets of $5 billion and more
VMF is proposing to increase such fee for the Fund under the Investment
Advisory Agreement to the following annual fee, to be computed daily and paid
monthly:
1.03% on assets up to $250 million
1.00% on assets of $250 million and more but less than $1 billion
0.97% on assets of $1 billion and more but less than $2 billion
0.94% on assets of $2 billion and more but less than $5 billion
0.91% on assets of $5 billion and more
REASONS FOR THE PROPOSED FEE INCREASE
As discussed above, in September 1999, VMF assumed responsibilities as
the investment adviser for the Trust as part of a reorganization of the asset
management activities of Nationwide Financial Services, Inc. Since that time,
VMF has implemented measures to enhance the scope and quality of services
provided to the Trust with a view toward attracting additional assets, which may
have beneficial effects on the Trust's expenses. As part of this process, VMF
has been evaluating the manner in which each of the Funds is currently being
managed and determining what are the most attractive areas of the market to
invest in; as a result, VMF recently recommended to the Trust's Board of
Trustees, and the Board agreed, that there be a significant restructuring of the
investment strategies used by the Mid Cap Growth Fund to achieve its investment
objective by focusing on growth companies that are creating fundamental changes
in the economy ("new economy companies") and a corresponding change of its name
to the Nationwide Quest Fund, which VMF believes reflects this new strategy.
Currently, the Mid Cap Growth Fund seeks to achieve its investment
objective of long-term capital appreciation by investing in the common stocks of
mid-sized companies. In following this strategy, VMF and its predecessors
previously have looked for investments that would increase in value over the
long term. Since March 1, 2000, VMF has focused more on
-20-
<PAGE> 25
faster growing mid-sized companies. However, VMF is currently revising the
investment policies of the Fund further to take advantage of what it sees as a
particularly attractive segment of the market, namely new economy companies.
Typically new economy companies are characterized by new or innovative products,
services or processes with the potential to enhance earnings growth and are
primarily in the service and information area of the global economy, such as in
telecommunications, computer systems and software, broadcasting and publishing,
health care, financial services and new age manufacturing. In order to fully
implement this change in strategy, however, VMF will need to increase the
resources available to the Fund and, for the reasons described below, is asking
for a fee increase to assist it in doing so.
In connection with this change in style, VMF advised the Board that VMF
will need to, and intends to, focus more of its resources on managing the Fund
in this new style. Already VMF has hired a new portfolio manager, Aaron Harris,
who has a substantial track record of investing in new economy companies and is
increasing the research and analytical support capabilities of VMF to assist the
new portfolio manager. Although the Fund has operated for more than 10 years
(including the operations of the Fund's predecessor), the Mid Cap Growth Fund's
assets have remained fairly small at approximately $20 million. As a result, the
Fund is not currently big enough to realize economies of scale under its current
fee schedule and as a result of the voluntary fee caps in place on the Fund, VMF
operated the Fund at a loss during 1999. VMF believes that if the transition to
focusing on the new economy companies is implemented successfully, more assets
will be attracted to the Fund and the Fund will reach economies of scale more
quickly.
VMF also believes that maintaining compensation at competitive levels
is necessary to attract and retain quality investment management and support
personnel and to continue to provide high quality investment performance to the
Fund. As a result, VMF believes that the proposed compensation under the
amendment is appropriate in light of market conditions which favor, and which
VMF expects will continue to favor, growth-oriented management styles.
As part of their recommendation to the Board of Trustees, VMF presented
information to the Trustees outlining the resources it intends to dedicate to
the management of the Fund in this new style and describing VMF's profitability
in managing the Fund using its current style. VMF also provided information on
its analysis and determination of the fee structure which it believes will allow
the Fund to be competitive with other similar funds in the current marketplace.
THE BOARD'S CONSIDERATIONS AND DETERMINATIONS
On May 5, 2000, the Board of Trustees of the Trust reviewed and
considered the proposed amendment to the current Investment Advisory Agreement
between the Trust, on behalf of the Mid Cap Growth Fund, and VMF, and approved
the amendment to the Agreement regarding the proposed increase in investment
advisory fees. The Board of Trustees, in making its determination to approve the
increased fees to be paid to VMF, considered the information provided by VMF, as
well as other information made available to it regarding the Fund, its fees and
its proposed operations. Specifically, the Trustees reviewed comparative expense
and performance information, the current investment advisory fees paid by funds
similar in size and investment style to be employed by VMF in managing the Fund,
and the need to provide VMF with adequate financial resources to provide such
services, including the hiring of a new portfolio manager.
The Board also considered the history of the Fund, noting its small
size and past performance. The Board also reviewed and considered VMF's plans to
have the Fund focus on new economy companies, the current level of fees received
by VMF versus expenses incurred by it in managing the Fund's portfolio, and the
added resources needed to employ the new,
-21-
<PAGE> 26
proposed style of management effectively. The Board also reviewed the resume of
the new portfolio manager and his experience and knowledge. The Board determined
that (1) the scope and quality of the services which VMF has provided and
expects to provide for the Fund have been and are satisfactory; (2) the
management fee rate is competitive compared to fee rates for mutual funds with
similar investment objectives and policies; and (3) the terms of the Investment
Advisory Agreement will not materially change under the amendment, except for
the increased advisory fee for the Fund. Finally the Board considered VMF's
belief that maintaining compensation at competitive levels over the long term is
necessary for VMF to provide high quality services to the Fund and how VMF's
present and future distribution and marketing strategies and commitment to
devote resources to develop new markets and attract additional assets for the
Fund in an increasingly competitive environment will impact the Fund.
After reviewing all of the information the Board considered relevant
and necessary, the Board determined that the proposed increase in investment
management fees for the Mid Cap Growth Fund was in the best interests of the
Fund and its shareholders. Specifically, the Board approved of VMF's proposed
change in investment style for the Fund and that additional compensation was
appropriate in order to implement such changes.
MORE ABOUT THE CHANGE IN FEES
The following tables illustrate the effect of the proposed investment
advisory fee increase upon holders of the different classes of Shares of the Mid
Cap Growth Fund. The tables below compare the current fees as of October 31,
1999, including investment advisory fees payable by the Fund to those fees that
would have been payable by the Fund, on a pro forma basis, if the amendment to
the Investment Advisory Agreement had been in effect:
CLASS A SHARES
<TABLE>
<CAPTION>
Shareholder Fees
(paid directly from your investment) Current Fees Pro Forma Fees
- ------------------------------------ ------------ --------------
<S> <C> <C>
Maximum Sales Charge imposed on
purchases (as a percentage of offering price)............... 5.75% 5.75%
Annual Fund Operating Expenses
(deducted from Fund assets)
- ---------------------------
Management Fees............................................. 0.60% 1.03%
Distribution and/or Service (12b-1) Fees.................... 0.25 0.25
Other Expenses.............................................. 0.98 0.98
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES(1)..................... 1.83% 2.26%
==== ====
</TABLE>
- --------------------------
(1) VMF has agreed to waive its fees or to reimburse "Other Expenses" to the
extent necessary to ensure Total Annual Fund Operating Expenses for Class A
Shares do not exceed 1.25% until further written notice to shareholders. If
shareholders approve the proposed change in investment advisory fees, VMF will
waive its fees or reimburse "Other Expenses" to the extent necessary to ensure
Total Annual Fund Operating Expenses for Class A Shares do not exceed 1.63%
until further written notice to shareholders.
This example shows what you could pay in expenses over time. The
example assume that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no expense reimbursement or waiver, and no
changes in expenses during those periods. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
-22-
<PAGE> 27
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Assuming current fees: $750 $1,117 $1,508 $2,599
Assuming pro forma fees: $791 $1,241 $1,715 $3,021
</TABLE>
CLASS B SHARES
<TABLE>
<CAPTION>
Shareholder Fees
(paid directly from your investment) Current Fees Pro Forma Fees
- ------------------------------------ ------------ --------------
<S> <C> <C>
Maximum Deferred Sales Charge imposed on
redemptions (as a percentage of original purchase
price or sale proceeds, as applicable)...................... 5.00% 5.00%
Annual Fund Operating Expenses
(deducted from Fund assets)
- ---------------------------
Management Fees............................................. 0.60% 1.03%
Distribution and/or Service (12b-1) Fees.................... 1.00 1.00
Other Expenses.............................................. 0.99 0.99
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES(1)..................... 2.59% 3.02 %
==== =====
</TABLE>
- --------------------------
(1) VMF has agreed to waive its fees or to reimburse "Other Expenses" to the
extent necessary to ensure Total Annual Fund Operating Expenses for Class B
Shares do not exceed 2.00% until further written notice to shareholders. If
shareholders approve the proposed change in investment advisory fees, VMF will
waive its fees or reimburse "Other Expenses" to the extent necessary to ensure
Total Annual Fund Operating Expenses for Class B Shares do not exceed 2.23%
until further written notice to shareholders.
This example shows what you could pay in expenses over time. The
example assume that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no expense reimbursement or waiver, and no
changes in expenses during those periods. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Assuming current fees: $762 $1,105 $1,575 $2,649
Assuming pro forma fees: $805 $1,233 $1,787 $3,071
</TABLE>
-23-
<PAGE> 28
You would pay the following expenses on the same investment if you did not sell
your Shares:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Assuming current fees: $262 $805 $1,375 $2,649
Assuming pro forma fees: $305 $933 $1,587 $3,071
</TABLE>
CLASS D SHARES
<TABLE>
<CAPTION>
Shareholder Fees
(paid directly from your investment) Current Fees Pro Forma Fees
- ------------------------------------ ------------ --------------
<S> <C> <C>
None None
Annual Fund Operating Expenses
(deducted from Fund assets)
- ---------------------------
Management Fees............................................. 0.60% 1.03%
Distribution and/or Service (12b-1) Fees.................... None None
Other Expenses.............................................. 0.95 0.95
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES(1)..................... 1.53% 1.96%
==== ====
</TABLE>
- --------------------------
(1) VMF has agreed to waive its fees or to reimburse "Other Expenses" to the
extent necessary to ensure Total Annual Fund Operating Expenses for Class D
Shares do not exceed 1.00% until further written notice to shareholders. If
shareholders approve the proposed change in investment advisory fees, VMF will
waive its fees or reimburse "Other Expenses" to the extent necessary to ensure
Total Annual Fund Operating Expenses for Class D Shares do not exceed 1.30%
until further written notice to shareholders.
This example shows what you could pay in expenses over time. The
example assume that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no expense reimbursement or waiver, and no
changes in expenses during those periods. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Assuming current fees: $599 $ 912 $1,247 $2,191
Assuming pro forma fees: $640 $1,038 $1,460 $2,632
</TABLE>
For the fiscal year ended October 31, 1999, the Trust, on behalf of the
Fund, incurred $66,283 in investment advisory fees. If the investment advisory
fee as proposed to be increased had been in effect for the year ended October
31, 1999, VMF would have earned $113,786, a 72% increase.
-24-
<PAGE> 29
MORE ABOUT THE INVESTMENT ADVISORY AGREEMENT
The current Investment Advisory Agreement was approved by the initial
shareholder of the Mid Cap Growth Fund on May __, 1998. Since then, the
Investment Advisory Agreement has not since been submitted to shareholders for
their approval.
Unless sooner terminated, the Investment Advisory Agreement by its
terms continues in effect for successive one-year periods ending May 9th of each
year so long as (1) such continuance is specifically approved at least annually
by the Trust's Board of Trustees or by a vote of a majority of the outstanding
Shares of the Fund, and (2) such renewal has been approved by the vote of a
majority of Trustees of the Trust who are not "interested persons," as that term
is defined by the 1940 Act, of any party to the Investment Advisory Agreement,
cast in person at a meeting called for the purpose of voting on such approval.
Any liability of VMF under such Agreement is limited to situations involving its
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties under the Investment Advisory Agreement. The Investment
Advisory Agreement is not assignable and may be terminated with respect to the
Fund without penalty on 60 days' written notice at the option of either party or
by a vote of the shareholders of the Fund.
FURTHER INFORMATION REGARDING VMF
VMF, Three Nationwide Plaza, Columbus, Ohio 43215, is a wholly owned
subsidiary of Villanova Capital, Inc. ("VCI"), 97% of whose outstanding common
stock is owned by Nationwide Financial Services, Inc., a holding company
("NFS"). NFS has two classes of common stock outstanding with different voting
rights enabling Nationwide Corporation (the holder of all of the outstanding
Class B Common Stock) to control NFS. All of the common stock of Nationwide
Corporation is held by Nationwide Mutual Insurance Company (95.3%) and
Nationwide Mutual Fire Insurance Company (4.7%), each of which is a mutual
company owned by its policy holders. The address for each of these entities is
One Nationwide Plaza, Columbus, Ohio 43215. Paul G. Hondros, a nominee for
trustee of the Trust and is President and Chief Executive Officer of VMF,
received 3% of the outstanding common stock of VCI as part of its organization
in 1999. In addition, Mr. Hondros own shares on options to purchase shares in
the amount of 2,500 shares of VCI. These options were granted on March 4, 1999,
pursuant to the Villanova Capital, Inc. Stock Option Agreement and vest based on
vesting schedules not later than March 4, 2004.
The name, address and principal occupation of the principal executive
officer of VMF and of VCI, the managing unitholder of VMF, are as follows:
<TABLE>
<CAPTION>
Principal Occupation
Name Position with VMF or VCI and Business Address(1)
- ----------------- ------------------------ -----------------------
<S> <C> <C>
Paul J. Hondros President and Chief Executive President and Chief Executive
Officer of VMF and VCI Officer of VMF and VCI
1200 River Road
Conshohocken, Pennsylvania 19428
Joseph J. Gasper Director and Vice Chairman of Director, President and Chief Operating
VCI Officer of NFS and Nationwide Life
Insurance Company
Dimon R. McFerson Director and Chairman of the President and Chief Executive Officer of
Board of VCI Nationwide Insurance and NAS
Robert A. Oakley Director, Executive Vice President Executive Vice President - Chief Financial
and Chief Financial Officer of VCI Officer for Nationwide Mutual Insurance Company
and NAS
Susan A. Wolken Director of VCI Senior Vice President - Product Management and
Nationwide Financial Marketing for NFS
Robert J. Woodward, Jr. Director, Executive Vice President Executive Vice President and Chief Investment
and Chief Investment Officer of VEI Officer of Nationwide Life and Annuity Insurance
Company and Nationwide Life Insurance Company
</TABLE>
- ---------------------------
(1) Unless otherwise noted, the business address for each Director is One
Nationwide Plaza, Columbus, Ohio 43215.
-25-
<PAGE> 30
Certain affiliates of VMF provide services to the Fund and are
compensated for such services. Under the terms of a Fund Administration
Agreement, Villanova SA Capital Trust ("VSA"), Three Nationwide Plaza, Columbus,
Ohio 43215, a wholly owned subsidiary of VCI, provides various administrative
and accounting services to the Fund, including daily valuation of the Fund's
Shares and preparation of financial statements, tax returns and regulatory
reports. For these services, the Mid Cap Growth Fund pays VSA the following
annual fee which is based on the Fund's average daily net assets: 0.07% on
assets up to $250 million, 0.05% on assets of $250 million up to $1 billion, and
0.04% on assets of $1 billion and more.
Prior to September 1, 1999, NAS a wholly owned subsidiary of NFS,
provided such services to the Mid Cap Growth Fund. For the fiscal year ended
October 31, 1999, the Fund paid VSA and NAS a total of $7,733 under the Fund
Administration Agreement for their respective services.
NAS also serves as the Fund's principal underwriter. In its capacity as
principal underwriter, NAS is available to receive purchase orders and
redemption requests relating to Shares of each of the Funds. As such, NAS is
entitled to any front-end sales charges or contingent deferred sales charge
imposed on purchases or sales of Shares of the Fund. NAS also receives fees from
the Fund under a Plan of Distribution adopted under Rule 12b-1 of the 1940 Act
in connection with the sale and distribution of the Fund's Class A and Class B
Shares. For the fiscal year ended October 31, 1999, NAS received from the Fund a
total of $4,782,435 in front-end and back-end sales charges and fees under the
Plan of Distribution.
In addition, Nationwide Investors Services, Inc. ("NISI"), a wholly
owned subsidiary of VSA, Three Nationwide Plaza, Columbus, Ohio 43215, serves as
transfer agent and dividend disbursing agent for the Mid Cap Growth Fund. For
these services, NISI receives an annual fee of $16 per account from the Fund.
For the fiscal year ended October 31, 1999, NISI received $24,498 from the Fund
for its services.
Approval of the amendment to the Investment Advisory Agreement with
respect to the Fund requires the affirmative vote of a majority of all votes
attributable to the outstanding Shares of the Fund, defined as the lesser of (a)
67% or more of the outstanding votes of the Fund present at such meeting, if
holders of more than 50% of the Shares are present or represented by proxy, or
(b) more than 50% of the Shares of the Fund. If the amendment to the Investment
Advisory Agreement is not approved, the current contractual fees will remain
unchanged.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 9.
PRINCIPAL SHAREHOLDERS
As of May 12, 2000, to the Trust's knowledge, the following are the
only persons who had or shared voting or investment power over more than 5% of
the outstanding shares of any class of any Fund:
<TABLE>
<CAPTION>
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Name and Address of Number of Shares Percentage of
Fund and Class Shareholder Beneficially Owned Fund Owned
- --------------------------- ------------------------------ ----------------------------------- -----------------------
<S> <C> <C> <C>
Mid Cap Growth Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
</TABLE>
-26-
<PAGE> 31
<TABLE>
<CAPTION>
- --------------------------- ------------------------------ ----------------------------------- -----------------------
<S> <C> <C> <C>
Growth Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Nationwide Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Bond Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Tax-Free Income Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Long-Term U.S. Government Nationwide Life Insurance
Bond Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Intermediate U.S. Nationwide Life Insurance
Government Bond Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Money Market Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
S&P 500 Index Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Morley Capital Nationwide Life Insurance
Accumulation Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Morley Enhanced Income Nationwide Life Insurance
Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Prestige Large Cap Value Nationwide Life Insurance
Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
</TABLE>
-27-
<PAGE> 32
<TABLE>
<CAPTION>
- --------------------------- ------------------------------ ----------------------------------- -----------------------
<S> <C> <C> <C>
Prestige Large Cap Growth Nationwide Life Insurance
Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Prestige Small Cap Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Prestige Balanced Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Prestige International Nationwide Life Insurance
Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Small Cap Index Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
International Index Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Bond Index Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Mid Cap Market Index Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Investor Destinations Nationwide Life Insurance
Aggressive Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Investor Destinations Nationwide Life Insurance
Moderately Aggressive Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Investor Destinations Nationwide Life Insurance
Moderate Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
</TABLE>
-28-
<PAGE> 33
<TABLE>
<CAPTION>
- --------------------------- ------------------------------ ----------------------------------- -----------------------
<S> <C> <C> <C>
Investor Destinations Nationwide Life Insurance
Moderately Conservative Company
Fund One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Investor Destinations Nationwide Life Insurance
Conservative Fund Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
Value Opportunities Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
High Yield Bond Fund Nationwide Life Insurance
Company
One Nationwide Plaza
Columbus, Ohio 43215
- --------------------------- ------------------------------ ----------------------------------- -----------------------
</TABLE>
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at any future Meeting
of Shareholders must be received by the Trust at its principal office a
reasonable time before the Trust begins to print and mail its proxy materials
for such meeting in order for such proposal to be considered for inclusion in
the Trust's Proxy Statement and form or forms of Proxy relating to such meeting.
Proposals received thereafter will be considered untimely and will not be
considered for inclusion in such proxy materials.
ADDITIONAL INFORMATION
With respect to the actions to be taken by the shareholders of the
Funds on the matters described in this Proxy Statement, the presence in person
or by proxy of shareholders entitled to cast a majority of the Shares of the
Trust on a particular Proposal at the Meeting shall constitute a quorum for
purposes of voting upon such Proposal at the Meeting, provided that no action
required by law or the Trust's Declaration of Trust to be taken by the holders
of a designated proportion of Shares may be authorized or taken by a lesser
proportion. Abstentions shall be treated as votes present for purposes of
determining whether a quorum exists. Broker-non-votes, as described below, will
not be treated as votes present for purposes of determining whether a quorum
exists. For purposes of determining whether Proposals 1 and 2 have been
approved, abstentions and broker non-votes will neither be counted as for or
against the particular Proposal. For purposes of determining whether Proposals 3
through 9 have been approved, abstentions and broker non-votes will be counted
as "against" that Proposal. As used above, broker non-votes are Shares for which
a broker holding such Shares for a beneficial owner has not received
instructions from the beneficial owner and may not exercise discretionary voting
power with respect thereto, although such broker may have been able to vote such
Shares on other matters at the Meeting for which it has discretionary authority
or instructions from the beneficial owner.
-29-
<PAGE> 34
The Trust will bear all costs in connection with the solicitation of
proxies from shareholders of the Trust. It is not currently expected that there
will be any solicitation other than by mail. However, the Trust may engage
Shareholder Communications Corporation ("SCC") to assist in soliciting proxies
by telephone or other means if the Trust determines that sufficient proxies to
approve one or more Proposals will not likely be received prior to the date of
the Meeting. At this time the material terms or cost of such an agreement, if
any, with SCC have not been determined.
By Order of the Trustees
June __, 2000 Elizabeth A. Davin, Secretary
-30-
<PAGE> 35
PRELIMINARY
NATIONWIDE __________________ FUND
Vote this proxy card TODAY! Your prompt response will save your Fund the expense
of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
[name]
[address]
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- -------------------------------------------------------------------------------
NATIONWIDE MUTUAL FUNDS: NATIONWIDE __________ FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Bryan Haft,
Gregory Keifer and Karen Tackett, or any one of them, attorneys, with full power
of substitution, to vote all shares of Nationwide Mutual Funds ("Trust") as
indicated above which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Trust to be held at an office of the Trust at Three
Nationwide Plaza, Columbus, Ohio 43215, on Wednesday, July 26, 2000 at __:00
a.m., E.D.S.T., and at any adjournments thereof. All powers may be exercised by
two or more of said proxy holders or substitutes voting or acting or, if only
one votes and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is
hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date:
------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
<PAGE> 36
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their best
judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- -------------------------------------------------------
<TABLE>
<S> <C> <C>
1. To elect the 12 nominees [ ] FOR all nominees listed [ ] WITHHOLD authority to
specified below as Trustees: (except as marked to the vote for all nominees.
contrary below).
Charles E. Allen, Paula H. J. Cholmondeley, C. Brent DeVore, Robert M. Duncan, Joseph J.
Gasper, Barbara Hennigar, Paul J. Hondros, Thomas J. Kerr, IV, Douglas F. Kridler, Dimon R.
McFerson, Arden L. Shisler, and David C. Wetmore
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF SUCH
NOMINEE(S) ON THE LINE
BELOW.)
- ----------------------------------------------------------------------
2. To ratify the selection of KPMG LLP FOR [ ] AGAINST [ ] ABSTAIN [ ]
as independent accountants of the Trust.
3. To amend the fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ]
policy regarding making loans for the Fund.
4. To amend the fundamental investment policy FOR [ ] AGAINST [ ] ABSTAIN [ ]
regarding commodities and commodities
contracts for the Fund.
5. To amend the fundamental investment policy FOR [ ] AGAINST [ ] ABSTAIN [ ]
regarding real estate for the Fund.
6. To amend the fundamental investment policy FOR [ ] AGAINST [ ] ABSTAIN [ ]
regarding borrowing and issuing senior
securities for the Fund.
</TABLE>
-2-
<PAGE> 37
<TABLE>
<S> <C> <C> <C>
7. To amend the fundamental investment policy FOR [ ] AGAINST [ ] ABSTAIN [ ]
with respect to diversification for the Fund.
8. To approve the reclassification of the FOR [ ] AGAINST [ ] ABSTAIN [ ]
fundamental investment objective(s) of
the Fund as nonfundamental.
9. To approve an amendment to the Investment FOR [ ] AGAINST [ ] ABSTAIN [ ]
Advisory Agreement, between the Trust, on
behalf of the Fund, and Villanova Mutual Fund
Trust to increase the investment advisory fee
for the Fund.
</TABLE>
-3-
