<PAGE> 1
[Governor Funds Logo]
GOVERNOR FUNDS
INVESTOR SHARES OF
------------------
Prime Money Market Fund
U.S. Treasury Obligations Money
Market Fund
S SHARES OF
-----------
Prime Money Market Fund
MANAGED BY MARTINDALE ANDRES &
COMPANY, LLC
PROSPECTUS
--------------------------------------------------------------------------------
OCTOBER 30, 2000
--------------------------------------------------------------------------------
The Securities and Exchange Commission has not approved or disapproved the
shares described in this Prospectus or determined whether this Prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
QUESTIONS?
CALL 1-800-766-3960
OR YOUR INVESTMENT REPRESENTATIVE.
www.governorfunds.com
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
RISK/RETURN SUMMARY AND FUND EXPENSES
[LOGO]
Review this section for a 2 Prime Money Market Fund
summary of each Fund's 5 U.S. Treasury Obligations Money Market Fund
investments, risks, past
performance, and fees.
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
[LOGO]
Review this section for 8 Prime Money Market Fund
information on investment 9 U.S. Treasury Obligations Money Market Fund
strategies and their risks. 10 Investment Risks
FUND MANAGEMENT
[LOGO]
Review this section for 11 Reorganization
details on the people and 12 The Investment Advisor
organizations who oversee 13 The Administrators and Distributor
the Funds.
SHAREHOLDER INFORMATION
[LOGO]
Review this section for 13 Pricing of Fund Shares
details on how shares are 14 Purchasing and Adding to Your Investor Shares
valued, how to purchase, 17 Purchasing S Shares
sell and exchange shares, 18 Selling Your Investor Shares
related charges and payments 19 General Policies on Selling Shares
of dividends and 21 General Policy on Redemption of S Shares
distributions. 22 Exchanging Your Shares
23 Dividends, Distributions and Taxes
FINANCIAL HIGHLIGHTS
[LOGO]
24 Prime Money Market Fund
25 U.S. Treasury Obligations Money Market Fund
BACK COVER
[LOGO]
Where to Learn More About Governor Funds
</TABLE>
1
<PAGE> 3
[LOGO]
RISK/RETURN SUMMARY AND FUND EXPENSES
-
The following is a summary of certain key information about the Prime Money
Market and U.S. Treasury Obligations Money Market Funds of Governor Funds.
You will find additional information about the Funds, including a detailed
description of the risks of an investment in the Funds, after this summary.
Other important things for you to note:
- An investment in the Funds is not a deposit in a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
- Although the Funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the
Funds.
RISK/RETURN SUMMARY OF THE
PRIME MONEY MARKET FUND
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE The Fund seeks current income with liquidity and stability
of principal.
PRINCIPAL The Fund is a "money market fund" that seeks to maintain a
INVESTMENT STRATEGIES stable net asset value of $1.00 per share. The Fund invests
primarily in bank certificates of deposit, bankers'
acceptances, prime commercial paper, corporate obligations,
municipal obligations, securities issued or guaranteed by
the U.S. government or its agencies and repurchase
agreements backed by such obligations.
PRINCIPAL The Fund's performance per share will change daily based on
INVESTMENT RISKS many factors, including the quality of the instruments in
the Fund's investment portfolio, national and international
economic conditions and general market conditions. Changes
in interest rates will affect the yield or value of the
Fund's investments in debt securities.
WHO MAY Consider investing in the Fund if you:
WANT TO INVEST? - are seeking preservation of capital
- have a low risk tolerance
- are willing to accept lower potential returns in exchange
for a higher degree of safety
- are investing short-term reserves
This Fund will not be appropriate for anyone:
- seeking high total returns
- pursuing a long-term goal or investing for retirement
</TABLE>
2
<PAGE> 4
RISK/RETURN SUMMARY AND FUND EXPENSES PRIME MONEY MARKET FUND
-
The chart and table on this
page show how the Investor
Shares of the Prime Money
Market Fund have performed
for the last three years
and how their performance
has varied from year to
year. The S Shares
commenced operations on
April 19, 1999. Because
these shares have less than
one calendar year's
performance, no performance
is shown for that class in
this section. The bar chart
shows changes in the Fund's
Investor Shares yearly
performance since inception
to demonstrate that the
Fund has gained and lost
value at differing times.
Past performance is not
indicative of future
results.
The returns for S Shares will
be lower than the Investor
Shares' returns because
expenses of the classes
differ.
At a meeting of the Board of
Trustees held on October
27, 2000, the Board of the
Trust approved the
liquidation of the S Shares
of the Prime Money Market
Fund. It is expected that
the liquidation will be
effected on or about
December 1, 2000.
Shareholders can redeem
their S Shares of the Prime
Money Market Fund at any
time prior to liquidation.
The Trust will no longer
accept requests to purchase
S Shares of the Prime Money
Market Fund effective
October 27, 2000.
PERFORMANCE BAR CHART AND TABLE
YEAR-BY-YEAR TOTAL RETURNS AS OF
12/31
[PERFORMANCE BAR CHART AND TABLE]
<TABLE>
<S> <C>
1997 5.15%
1998 5.16%
1999 4.84%
</TABLE>
Best quarter: Q2 2000 1.45%
Worst quarter: Q2 1999 1.11%
Year-to-date total return for
the period ended September 30,
2000: 4.43%
AVERAGE ANNUAL TOTAL
RETURNS
(for the periods ending
December 31, 1999)*
<TABLE>
<CAPTION>
SINCE
PAST INCEPTION
YEAR (OCTOBER 7, 1996)
<S> <C> <C>
PRIME MONEY MARKET FUND (INVESTOR SHARES) 4.84% 5.06%
</TABLE>
* As of December 31, 1999 the 7-day yield (Investor Shares) was 5.04%. Without
expense limitations, the Fund's yield would have been 5.04% for this time
period. For current yield information on the Fund, call 1-800-766-3960. The
Prime Money Market Fund's yield appears in The Wall Street Journal each
Thursday.
Both the chart and the table assume reinvestment of dividends and distributions.
3
<PAGE> 5
RISK/RETURN SUMMARY AND FUND EXPENSES PRIME MONEY MARKET FUND
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE PRIME MONEY MARKET FUND. Shareholder transaction fees are paid
from your account. Annual Fund Operating Expenses are paid out of Fund assets,
and are reflected in the Fund's yield. The Fund's fees and expenses are based on
the Fund's operating expenses for the fiscal year ended June 30, 2000, restated
for termination of fee waivers.
<TABLE>
<S> <C> <C>
SHAREHOLDER FEES INVESTOR S*
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) SHARES SHARES
Maximum sales charge (load) imposed on
purchases None None
Annual Fund Operating Expenses
(expenses that are deducted from Fund
assets) (as a percentage of average net
assets)
Management fees .40% .40%
Distribution (12b-1) fees None None
Other expenses(1) .30% .50%
Total Annual Fund Operating Expenses(2) .70% .90%
</TABLE>
* As discussed earlier, at a meeting of the
Board of Trustees held on October 27, 2000,
the Board of the Trust approved the
liquidation of the S Shares of the Prime
Money Market Fund. It is expected that the
liquidation will be effected on or about
December 1, 2000. Shareholders can redeem
their S Shares of the Prime Money Market
Fund at any time prior to liquidation. The
Trust will no longer accept requests to
purchase S Shares of the Prime Money Market
Fund effective October 27, 2000.
(1) Other Expenses include administration
fees, transfer agency fees, and all other
ordinary operating expenses not listed
above, and the payment of a servicing fee to
various banks, trust companies,
broker-dealers (other than the Distributor)
and other financial organizations ("Service
Organizations") under an Administrative
Services Plan up to an annual rate of .25%
of the daily net assets of the Fund for
shares owned by the shareholders with whom
the Service Organization has a servicing
relationship.
(2) The Advisor and administrators will
waive a portion of their fees until October
31, 2000 pursuant to a contract with the
Fund dated October 29, 1999. Until October
31, 2000, the net annual operating expenses
after those waivers for the Fund's Investor
Shares will be .49% and for the Fund's S
Shares will be .69%.
EXAMPLE
<TABLE>
<S> <C> <C> <C> <C>
1 3 5 10
YEAR YEARS YEARS YEARS
PRIME MONEY MARKET FUND
INVESTOR SHARES $72 $224 $390 $ 871
S SHARES $92 $287 $498 $1,108
</TABLE>
Use the example at right to compare fees and expenses with those of other Funds.
It illustrates the amount of fees and expenses you would pay, assuming the
following:
- $10,000 investment
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses
Because this example is hypothetical and for comparison only, your actual costs
will be different.
4
<PAGE> 6
[LOGO]
RISK/RETURN SUMMARY AND FUND EXPENSES
-
RISK/RETURN SUMMARY OF THE
U.S. TREASURY OBLIGATIONS MONEY MARKET FUND
<TABLE>
<S> <C>
INVESTMENT OBJECTIVES The Fund seeks current income with liquidity and stability of principal.
PRINCIPAL The Fund is a "money market fund" that seeks to maintain a stable net asset
INVESTMENT STRATEGIES value of $1.00 per share. The Fund invests primarily (at least 65% of its
total assets) in securities issued by the U.S. Treasury, such as bills,
notes and bonds, and repurchase agreements backed by such securities.
PRINCIPAL The Fund's performance per share will change daily based on many factors,
INVESTMENT RISKS including the quality of the instruments in the Fund's investment portfolio,
national and international economic conditions and general market
conditions. Changes in interest rates will affect the yield or value of the
Fund's investments in debt securities.
WHO MAY Consider investing in the Fund if you:
WANT TO INVEST? - are seeking preservation of capital
- have a low risk tolerance
- are willing to accept lower potential returns in exchange for a higher
degree of safety
- are investing short-term reserves
This Fund will not be appropriate for anyone:
- seeking high total returns
- pursuing a long-term goal or investing for retirement
</TABLE>
5
<PAGE> 7
U.S. TREASURY OBLIGATIONS
RISK/RETURN SUMMARY AND FUND EXPENSES MONEY MARKET FUND
The chart and table on this
page show how the U.S.
Treasury Obligations Money
Market Fund has performed
for the last two calendar
years and how its
performance has varied from
year to year. Past
performance is not
indicative of future
results.
<TABLE>
<CAPTION>
SINCE
PAST INCEPTION
YEAR (JULY 1, 1997)
<S> <C> <C>
U.S. TREASURY OBLIGATIONS MONEY
MARKET FUND 4.21% 4.50%
</TABLE>
* As of December 31, 1999 the 7-day yield was 4.07%. Without expense
limitations, the Fund's yield would have been 3.83% for this time period. For
current yield information on the Fund, call 1-800-766-3960. The U.S. Treasury
Obligations Money Market Fund's yield appears in The Wall Street Journal each
Thursday.
Both the chart and the table assume reinvestment of dividends and distributions.
PERFORMANCE BAR CHART AND TABLE
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31
<TABLE>
<S> <C>
1998 4.62%
1999 4.21%
</TABLE>
Best quarter: Q2 2000 1.30%
Worst quarter: Q1 1999 0.98%
Year-to-date total return for the period ended September 30, 2000: 3.91%
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ending
December 31, 1999)*
6
<PAGE> 8
U.S. TREASURY OBLIGATIONS
RISK/RETURN SUMMARY AND FUND EXPENSES MONEY MARKET FUND
FEES AND EXPENSES
<TABLE>
<S> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTOR
INVESTMENT) SHARES
Maximum sales charge (load) imposed on
purchases None
Annual Fund Operating Expenses
(expenses that are deducted from Fund
assets)
(as a percentage of average net assets)
Management fees .40%
Distribution (12b-1) fees None
Other expenses(1) .55%
Total Annual Fund Operating Expenses(2) .95%
</TABLE>
(1) Other Expenses include administration
fees, transfer agency fees, and all other
ordinary operating expenses not listed
above, and the payment of a servicing fee to
Service Organizations under an
Administrative Services Plan up to an annual
rate of .25% of the daily net assets of the
Fund for shares owned by the shareholders
with whom the Service Organization has a
servicing relationship.
(2) The Advisor and administrators will
waive a portion of their fees until October
31, 2000, pursuant to a contract with the
Fund dated October 29, 1999. Until October
31, 2000, the net annual operating expenses
for the Fund's Investor Shares will be .72%.
EXAMPLE
<TABLE>
<S> <C> <C> <C> <C>
1 3 5 10
YEAR YEARS YEARS YEARS
U.S. TREASURY OBLIGATIONS
MONEY MARKET FUND $97 $303 $525 $1,166
</TABLE>
THIS TABLE DESCRIBES THE FEES
AND EXPENSES THAT YOU MAY
PAY IF YOU BUY AND HOLD
SHARES OF THE U.S.
TREASURY OBLIGATIONS MONEY
MARKET FUND. Shareholder
transaction fees are paid
from your account. Annual
Fund Operating Expenses
are paid out of Fund
assets, and are reflected
in the Fund's yield. The
Fund's fees and expenses
are based on the Fund's
operating expenses for the
fiscal year ended June 30,
2000, restated for
termination of fee
waivers.
Use the example at right to
compare fees and expenses
with those of other Funds. It
illustrates the amount of
fees and expenses you would
pay, assuming the following:
- $10,000 investment
- 5% annual return
- redemption at the end of
each period
- no changes in the Fund's
operating expenses
Because this example is
hypothetical and for
comparison only, your actual
costs will be different.
7
<PAGE> 9
[LOGO]
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
-
As a money market fund, each Fund must meet the requirements of the
Securities and Exchange Commission's Rule 2a-7. This Rule imposes
requirements on the investment quality, maturity, and diversification of the
Fund's investments. Under Rule 2a-7, each Fund's investments must have a
remaining maturity (as defined under the Rule) of no more than 397 days and
its investments must maintain a dollar-weighted average portfolio maturity
that does not exceed 90 days. Each Fund will only buy a money market
instrument if it or its issuer or guarantor has short-term ratings in the two
highest categories from at least two nationally recognized statistical rating
organizations, such as Standard & Poor's Ratings Group or Moody's Investors
Service, Inc., or only one such rating if only one organization has rated the
instrument. Or, if the money market instrument is not rated, the Advisor must
determine that it is of comparable quality to eligible rated instruments.
The investment objectives of both Funds and their related policies and
activities are not fundamental and may be changed without approval of Fund
shareholders. If there is a change in the investment objective of a Fund,
shareholders should consider whether the Fund remains an appropriate
investment in light of their then current financial position and needs.
PRIME MONEY MARKET FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to seek current income with liquidity and
stability of principal.
INVESTMENT POLICIES AND STRATEGY
The Fund pursues its objective by maintaining a portfolio of high-quality,
U.S. dollar-denominated money market instruments. The Fund may invest in:
- marketable debt obligations issued or guaranteed by the U.S.
Government or one of its agencies or instrumentalities;
- certificates of deposit and bankers' acceptances issued or guaranteed
by, or time deposits maintained at, banks (including foreign branches
of U.S. banks or U.S. or foreign branches of foreign banks) and
savings and loan associations;
- high-quality domestic and foreign commercial paper and other
high-quality short-term debt obligations, such as floating, variable
rate or variable amount U.S. dollar-denominated demand notes and
bonds;
- obligations issued or guaranteed by one or more foreign governments or
one of their agencies or instrumentalities, including obligations of
supranational entities;
- domestic or foreign bank obligations (up to 20% of the Fund's total
assets);
- securities of money market mutual funds;
- when-issued or delayed-delivery securities;
- asset-backed securities; and
- repurchase agreements collateralized by the types of securities listed
above.
The Fund buys and sells securities based on its objective of seeking current
income with liquidity and stability of principal. The Fund will attempt to
increase its yield by trading to take advantage of short-term market
variations. The Fund's Advisor evaluates investments based on credit analysis
and the Advisor's interest rate outlook.
8
<PAGE> 10
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
-
U.S. TREASURY OBLIGATIONS MONEY MARKET FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to seek current income with liquidity and
stability of principal.
INVESTMENT POLICIES AND STRATEGY
The Fund pursues its objective by investing at least 65% of its total assets
in short term obligations issued or guaranteed by the U.S. Treasury and
repurchase agreements with respect to these types of obligations.
The Fund may invest in:
- issues of the U.S. Treasury, such as bills, notes, bonds and variable
and floating rate securities;
- securities of money market mutual funds;
- when-issued or delayed delivery securities.
The Fund may also invest in issues of U.S. Government agencies and
instrumentalities established under the authority of an Act of Congress,
including obligations supported by the "full faith and credit" of the United
States (e.g., obligations guaranteed by the Export-Import Bank of the United
States, and Private Export Funding Corporation, among others) and repurchase
agreements with respect to these types of obligations.
The Fund buys and sells securities based on its objective of seeking current
income with liquidity and stability of principal. The Fund will attempt to
increase its yield by trading to take advantage of short-term market
variations. The Fund's Advisor evaluates investments based on credit analysis
and the Advisor's interest rate outlook.
9
<PAGE> 11
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
-
INVESTMENT RISKS
GENERAL RISK FACTORS: BOTH MONEY MARKET FUNDS
The Funds expect to maintain a net asset value of $1.00 per share, but there
is no assurance that the Funds will be able to do so on a continuous basis.
The Funds' performance per share will change daily based on many factors,
including fluctuation in interest rates, the quality of the instruments in
each Fund's investment portfolio, national and international economic
conditions and general market conditions.
An investment in the Funds is neither insured nor guaranteed by the U.S.
Government. Shares of a Fund are not deposits or obligations of, or
guaranteed or endorsed by, the Advisor or any bank, and the shares are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency.
There can be no assurance that the investment objective of each Fund will be
achieved. In addition, each Fund's investment policies, as well as the
relatively short maturity of obligations purchased by the Funds, may result
in frequent changes in each Fund's portfolio, which may give rise to taxable
gains.
To the extent the Funds invest in mutual funds, a pro rata portion of the
other mutual funds' expenses will be borne by the Fund.
The Funds may also be subject to credit risks. The Funds could lose money if
the issuer of a security is unable to meet its financial obligations.
SPECIFIC RISK FACTORS: PRIME MONEY MARKET FUND
Foreign investments subject the Fund to investment risks different from those
associated with domestic investments. Foreign investments may be riskier than
U.S. investments because of unstable international political and economic
conditions, foreign controls on investment and currency exchange, withholding
taxes, or a lack of adequate company information, and lack of government
regulation.
10
<PAGE> 12
[LOGO]
FUND MANAGEMENT
-
REORGANIZATION
On October 27, 2000, the Board of Trustees of the Trust approved Agreements
and Plans of Reorganization between the Trust and Vision Group of Funds, Inc.
("Vision Funds"). The Agreements and Plans of Reorganization, which provide
for the reorganization of the Trust into Vision Funds, will also be submitted
to a vote of the shareholders of the Trust at a meeting to be held on or
about December 13, 2000. If the Agreements and Plans of Reorganization are
approved by shareholders, and certain other conditions are satisfied, the
assets and liabilities of each of the Trust's Funds will be transferred to
similar Funds in Vision Funds, and the shareholders of the Trust's Funds will
become shareholders of Vision Funds. A combined proxy statement and
prospectus with respect to the proposed reorganization will be mailed to
shareholders in advance of the meeting. If the Agreements and Plans of
Reorganization are approved by shareholders, it is expected that the
reorganization will occur in mid to late December 2000.
It is proposed that each Fund will reorganize into the corresponding Vision
Fund as follows: Governor Prime Money Market Fund into the Vision
Institutional Prime Money Market Fund; and Governor U.S. Treasury Obligations
Money Market Fund into the Vision Treasury Money Market Fund.
The Vision Institutional Prime Money Market Fund has recently been organized
for the purpose of continuing the investment operations of the Governor Prime
Money Market Fund, and has no assets or prior history of investment
operations.
THE INVESTMENT ADVISOR
Martindale Andres & Company, LLC ("Martindale") is the investment advisor of
each Fund. Until October 6, 2000, the Advisor was a wholly-owned subsidiary
of Keystone Financial, Inc. ("Keystone"), 1 Keystone Plaza, Harrisburg,
Pennsylvania 17101. On May 31, 2000, the Funds' previous advisor, Governors
Group Advisors, Inc., reorganized into Martindale Andres & Company, LLC, the
Funds' previous sub-advisor, with no resulting change of actual control or
management. The Advisor assumed all of the obligations and responsibilities
of Governors Group Advisors, Inc. under the Investment Advisory Agreement
with respect to the Funds.
Subject to the general supervision of the Board of Trustees of the Funds and
in accordance with the investment objective and restrictions of each Fund,
the Advisor has agreed to manage each Fund, make decisions with respect to
and place orders for all purchases and sales of its portfolio securities, and
maintain each Fund's records relating to such purchases and sales.
For these advisory services, the Funds paid as follows during the fiscal year
ended June 30, 2000:
<TABLE>
<CAPTION>
PERCENTAGE OF
AVERAGE NET ASSETS
FOR THE YEAR ENDED 6/30/00
<S> <C>
------------------------------
Prime Money Market Fund .20%*
------------------------------
U.S. Treasury Obligations Money Market Fund .20%*
-------------------------------------------------------------------------------------
</TABLE>
* The Advisor waived a portion of its contractual fees
with regard to these Funds for the most recent fiscal
year. Contractual fees (without waivers) are .40% for
each Fund.
On October 6, 2000, Keystone merged into M&T Corp., the corporate parent of
M&T Bank (the "Bank Merger"). Consummation of the Bank Merger caused a change
in the ownership of Martindale, which
11
<PAGE> 13
FUND MANAGEMENT
-
automatically terminated the investment advisory agreement between Martindale
and the Governor Funds then in effect ("Previous Advisory Agreement") in
accordance with its terms and as required by the Investment Company Act of
1940. Since the termination of the Previous Advisory Agreement, Martindale
has been providing investment advisory services to the Funds under the terms
of an Interim Advisory Agreement approved by the Board of Trustees on
September 14, 2000. The terms and conditions of the Interim Advisory
Agreement are identical in all material respects to the Previous Advisory
Agreement, including the fees, except for its termination provisions and any
compensation payable to Martindale is to be held in an interest-bearing
escrow account with State Street Bank & Trust Company.
At the September 14, 2000 meeting, the Board also approved a New Advisory
Agreement with Martindale. The New Advisory Agreement is identical in all
material respects to the Previous Advisory Agreement, including the rate of
investment advisory fee, except for its effective and termination dates.
Specifically, the New Advisory Agreement will become effective, as to a
Governor Fund, on the date the shareholders of that Governor Fund approve it.
Shareholder approval of the New Advisory Agreement is necessary in order for
Martindale to receive the amount of fees it would have otherwise received
under the Previous Advisory Agreement for managing the Funds under the
Interim Advisory Agreement. The fees payable under both the Interim Advisory
Agreement and New Advisory Agreement are identical to the rate of advisory
fee under the Previous Advisory Agreement.
If shareholders of the Funds do not approve the New Advisory Agreement,
Martindale will be entitled to receive the lesser of the total amount held in
the escrow account or any costs it incurred in performing under the Interim
Advisory Agreement (plus interest earned on the amount while in the
interest-bearing escrow account), on behalf of that Governor Fund, and such
amount will be released to Martindale from the interest-bearing escrow
account. Any excess monies held in the interest-bearing escrow account will
be returned to the relevant Governor Fund.
As to a particular Governor Fund, if shareholders do not approve the New
Advisory Agreement, the Board of Trustees of the Governor Funds will decide
what action should be taken with respect to that Fund's investment advisory
arrangements.
THE ADMINISTRATORS AND DISTRIBUTOR
Martindale Andres & Company, LLC and BISYS Fund Services Ohio, Inc. ("BISYS
Ohio"), whose address is 3435 Stelzer Road, Columbus, Ohio 43219-3035, serve
as each Fund's administrators. As noted above, on May 31, 2000, the Funds'
previous co-administrator, Governors Group Advisors, Inc., was reorganized
into Martindale Andres & Company, LLC, with no resulting change of actual
control or management. The reorganization resulted in Martindale Andres &
Company, LLC assuming all of the obligations and responsibilities of the
Funds' previous co-administrator under the Management and Administration
Agreement with the Fund.
BISYS Fund Services Limited Partnership ("BISYS") serves as the distributor
of the Funds' shares. BISYS may provide financial assistance in connection
with pre-approved seminars, conferences and advertising to the extent
permitted by applicable state or self-regulatory agencies, such as the
National Association of Securities Dealers, Inc.
The Statement of Additional Information has more detailed information about
the Advisor and other service providers.
12
<PAGE> 14
[LOGO]
SHAREHOLDER INFORMATION
-
PRICING OF FUND SHARES
Each Fund's net asset value, or NAV, is expected to be constant at $1.00 per
share, although this value is not guaranteed. The NAV is determined at 12
noon Eastern time and the close of regular trading on the New York Stock
Exchange (generally 4:00 p.m. Eastern time) on each Business Day of that
Fund. The Funds value their securities at their amortized cost. This method
involves valuing an instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless of the impact
of fluctuating interest rates on the market value of the instrument.
---------------------------
HOW NAV IS CALCULATED
The NAV is calculated by
adding the total value of
the Fund's investments and
other assets, subtracting
its liabilities and then
dividing that figure by the
number of outstanding
shares of the Fund:
NAV =
Total Assets - Liabilities
----------------------------
Number of Shares
Outstanding
NAV is calculated
separately for the Prime
Money Market Fund's
Investor Shares and S
Shares.
---------------------------
BUSINESS DAY DEFINED -- a Business Day of a Fund is a day on which the New York
Stock Exchange is open for trading and
any other day (other than a day on
which no shares of that Fund are
tendered for redemption and no order
to purchase any shares of that Fund is
received) during which there is
sufficient trading in portfolio
instruments such that the Fund's net
asset value per share might be
materially affected. The New York
Stock Exchange will not be open in
observance of the following holidays:
New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
13
<PAGE> 15
SHAREHOLDER INFORMATION
-
PURCHASING AND ADDING TO YOUR INVESTOR SHARES
PURCHASE OF INVESTOR SHARES
You may purchase Investor
Shares of the Funds through
the Distributor or through
banks, brokers and other
investment representatives,
which may charge additional
fees and may require higher
minimum investments or
impose other limitations on
buying and selling shares.
If you purchase shares
through an investment
representative, that party
is responsible for
transmitting orders by
close of business and may
have an earlier cut-off
time for purchase and sale
requests. Consult your
investment representative
or institution for specific
information.
<TABLE>
<CAPTION>
MINIMUM MINIMUM
INITIAL SUBSEQUENT
ACCOUNT TYPE INVESTMENT INVESTMENT
<S> <C> <C>
Regular $1,000 $25
(non-retirement)
-----------------------------------------------
Retirement (IRA) $1,000 $25
-----------------------------------------------
Automatic Investment
Plan $ 250 $25
</TABLE>
If you are an employee of the Advisor, M&T Bank, or any of their affiliates, the
initial minimum investment amount is
reduced to $250.
- All purchases must be in U.S. dollars, although payment for Fund shares may be
made in the form of securities that are permissible investments for the
particular Fund at the discretion of the Advisor.
- A fee will be charged for any checks that do not clear.
- Third-party checks are not accepted.
A Fund may waive its minimum purchase requirement and the Distributor may
reject a purchase order if it considers it in the best interest of the Fund
and its shareholders.
-----------------------------------------------------------------------------
AVOID 31% TAX WITHHOLDING
The Funds are required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to shareholders who have not provided a
Fund with their certified taxpayer identification number in compliance with
IRS rules. To avoid this, make sure you provide your correct Tax
Identification Number (Social Security Number for most investors) on your
account application.
-----------------------------------------------------------------------------
14
<PAGE> 16
SHAREHOLDER INFORMATION
-
PURCHASING AND ADDING TO YOUR INVESTOR SHARES
CONTINUED
INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT -- INVESTOR SHARES
BY REGULAR MAIL OR OVERNIGHT SERVICE:
If purchasing through your financial advisor or brokerage account, simply
tell your advisor or broker that you wish to purchase shares of the Funds and
he or she will take care of the necessary documentation. For all other
purchases, follow the instructions below.
All investments made by regular mail or express delivery, whether initial or
subsequent, should be sent to:
BY REGULAR MAIL:
Governor Funds
P.O. Box 182707
Columbus, OH 43218-2707
For Initial Investment:
BY EXPRESS MAIL:
Governor Funds
c/o BISYS Fund Services
Attn: T.A. Operations
3435 Stelzer Road
Columbus, OH 43219
1. Carefully read and complete the application. Establishing your account
privileges now saves you the inconvenience of having to add them later.
2. Make check, bank draft or money order payable to the appropriate Fund.
3. Mail or deliver application and payment to the address above.
For Subsequent Investments:
1. Use the investment slip attached to your account statement. Or, if
unavailable, provide the following information:
- Fund name
- Amount invested
- Account name and number
2. Make check, bank draft or money order payable to the appropriate Fund.
3. Mail or deliver investment slip and payment to the address above.
ELECTRONIC PURCHASES
Your bank must participate in the Automated Clearing House (ACH) and must be
a United States bank. Your bank or broker may charge for this service.
Establish electronic purchase option on your account application or call
1-800-766-3960. Your account can generally be set up for electronic purchases
within 15 days.
Call 1-800-766-3960 to arrange a transfer from your bank account.
15
<PAGE> 17
SHAREHOLDER INFORMATION
-
PURCHASING AND ADDING TO YOUR INVESTOR SHARES
CONTINUED
BY WIRE TRANSFER
For Initial Investment:
Call 1-800-766-3960 to obtain a
new account number and
instructions for returning your
completed application to the
address shown above for mail
purchases; and
For All Investments:
Instruct your bank to wire
transfer your investment to:
The Bank of New York
Routing Number: ABA # 021000018
DDA# 890028418
Include: your name
your confirmation
number
ELECTRONIC VS. WIRE TRANSFER
Wire transfers allow financial institutions to send funds to each other, almost
instantaneously. With an
electronic purchase or sale, the
transaction is made through the
Automated Clearing House (ACH)
and may take up to eight days to
clear. There is generally no fee
for ACH transactions.
AFTER INSTRUCTING YOUR BANK TO WIRE THE FUNDS, CALL 1-800-766-3960 TO ADVISE
US OF THE AMOUNT BEING TRANSFERRED AND THE NAME OF YOUR BANK.
You can add to your account by using the convenient options described below.
The Fund reserves the right to change or eliminate these privileges at any
time with 60 days' notice.
Note: Your bank may charge a wire transfer fee.
AUTOMATIC INVEST PLAN
You can make automatic
investments in the Funds from
your bank account, through
payroll deduction or from your
federal employment, Social
Security or other regular
government checks. Automatic
investments can be as little as
$25, once you've invested the
$250 minimum required to open
the account.
To invest regularly from your
bank account:
- Complete the Automatic Invest
Plan portion on your Account
Application.
Make sure you note:
- Your bank name, address and
account number
- The amount you wish to invest
automatically (minimum $25)
- How often you want to invest (every month, 4 times a year, twice a year
or once a year)
- Attach a voided personal check.
To invest regularly from your paycheck or government check:
Call 1-800-766-3960 for an enrollment form.
DIRECTED DIVIDEND OPTION
By selecting the appropriate box in the Account Application, you can elect to
receive your distributions in
cash (check) or have
distributions (capital gains and
dividends) reinvested in another
Governor Fund without a sales
charge. You must maintain the
minimum balance in each Fund into
which you plan to reinvest
dividends or the reinvestment
will be suspended and your
dividends paid to you. The Funds
may modify or terminate this
reinvestment option without
notice. You can change or
terminate your participation in
the reinvestment option at any
time.
16
<PAGE> 18
SHAREHOLDER INFORMATION
-----------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions will be automatically reinvested unless you
request otherwise.
DISTRIBUTIONS ARE MADE ON A PER SHARE BASIS REGARDLESS OF HOW LONG YOU'VE
OWNED YOUR SHARES. THEREFORE, IF YOU INVEST SHORTLY BEFORE THE DISTRIBUTION
DATE, SOME OF YOUR INVESTMENT WILL BE RETURNED TO YOU IN THE FORM OF A
DISTRIBUTION.
-----------------------------------------------------------------------------
PURCHASING S SHARES
As discussed earlier, at a meeting of the Board of Trustees held on October
27, 2000, the Board of the Trust approved the liquidation of the S Shares of
the Prime Money Market Fund. It is expected that the liquidation will be
effected on or about December 1, 2000. Shareholders can redeem their S Shares
of the Prime Money Market Fund at any time prior to liquidation. The Trust
will no longer accept requests to purchase S Shares of the Prime Money Market
Fund effective October 27, 2000.
17
<PAGE> 19
SHAREHOLDER INFORMATION
SELLING YOUR INVESTOR SHARES
You may sell your shares at any
time. Your sales price will be
the next NAV after your sell
order is received by the Fund,
its transfer agent, or your
investment representative.
Normally you will receive your
proceeds within a week after
your request is received. See
section on "General Policies on
Selling Shares" below.
WITHDRAWING MONEY FROM YOUR FUND INVESTMENT
As a mutual fund shareholder, you are technically selling shares when you
request a withdrawal in cash. This is
also known as redeeming shares or a
redemption of shares.
INSTRUCTIONS FOR SELLING SHARES
If selling your shares through your financial advisor or broker, ask him or
her for redemption procedures. Your advisor and/or broker may have
transaction minimums and/or transaction times which will affect your
redemption. For all other sales transactions, follow the instructions below.
<TABLE>
<S> <C>
BY TELEPHONE 1. Call 1-800-766-3960 with instructions as to how you
(unless you have declined telephone sales wish to receive your funds (mail, wire, electronic
privileges) transfer). (See "General Policies on Selling
Shares -- Verifying Telephone Redemptions" below)
BY MAIL OR OVERNIGHT SERVICE 1. Call 1-800-766-3960 to request redemption forms or
(See "General Policies on Selling write a letter of instruction indicating:
Shares -- Redemptions in Writing - your Fund and account number
Required" below) - amount you wish to redeem
- address where your check should be sent
- account owner signature
2. Mail to:
(if by regular mail) Governor Funds
P.O. Box 182707
Columbus, OH 43218-2707
(if by overnight service) Governor Funds
c/o BISYS Fund Services
Attn: T.A. Operations
3435 Stelzer Road
Columbus, Ohio 43219
WIRE TRANSFER Call 1-800-766-3960 to request a wire transfer.
You must indicate this option on your If you call by 4 p.m. Eastern time, your payment will
account application. normally be wired to your bank on the next business day.
The Fund may charge a wire transfer fee Otherwise, it will normally be wired on the second
NOTE: Your financial institution may also business day after your call.
charge a separate fee.
ELECTRONIC REDEMPTIONS Call 1-800-766-3960 to request an electronic redemption.
Your bank must participate in the If you call by 4 p.m. Eastern time, the NAV of your shares
Automated Clearing House (ACH) and must will normally be determined on the same day and the
be a U.S. bank. proceeds will be credited within 8 days.
Your bank may charge for this service.
</TABLE>
QUESTIONS?
Call 1-800-766-3960 or
your investment representative.
18
-
<PAGE> 20
SHAREHOLDER INFORMATION
-
SELLING YOUR INVESTOR SHARES
CONTINUED
AUTO WITHDRAWAL PLAN
You can receive automatic payments from your account on a monthly, quarterly,
semi-annual or annual basis. The minimum monthly withdrawal is $50. To
activate this feature:
- Make sure you've checked the appropriate box on the Account Application.
Or call 1-800-766-3960.
- Include a voided personal check.
- Your account must have a value of $5,000 or more to start withdrawals.
- If the value of your account falls below $1,000 ($250 if you are an
employee of the Advisor, or one of its affiliates), you may be asked to
add sufficient funds to bring the account back to $1,000 (or $250), or
the Fund may close your account and mail the proceeds to you.
REDEMPTION BY CHECK WRITING
You may write checks to make payments to any person or business on your
account (in any amount not less than $500). To obtain checks, complete the
check writing section of the Account Application or contact the Funds to
obtain a signature card. Dividends and distributions will continue to be paid
up to the day the check is presented for payment. You must maintain the
minimum required account balance of $1,000 per Fund and you may not close
your account by writing a check.
GENERAL POLICIES ON SELLING SHARES
REDEMPTIONS IN WRITING REQUIRED
Redemption requests may require a signature guarantee. The signature
guarantee requirement will be waived if the following conditions apply:
- the redemption check is payable to the shareholder(s) of record.
- the redemption check is mailed to the shareholder(s) at the address of
record or mailed or wired to a commercial bank account previously
designated on the Account Registration Form.
To change the address to which a redemption check is to be mailed, a written
request must be received by the Transfer Agent. In connection with such
request, the Transfer Agent will require a signature guarantee by an eligible
guarantor institution. For purposes of this policy, the term "eligible
guarantor institution" shall include banks, brokers, dealers, credit unions,
securities exchanges and associations, clearing agencies and savings
associations as those terms are defined in the Securities Exchange Act of
1934. The Transfer Agent reserves the right to reject any signature guarantee
if (1) it has reason to believe that the signature is not genuine, (2) it has
reason to believe that the transaction would otherwise be improper, or (3)
the guarantor institution is a broker or dealer that is neither a member of a
clearing corporation nor maintains net capital of at least $100,000.
19
<PAGE> 21
SHAREHOLDER INFORMATION
-
GENERAL POLICIES ON SELLING SHARES
CONTINUED
VERIFYING TELEPHONE REDEMPTIONS
The Funds make efforts to ensure that telephone redemptions are only made by
authorized shareholders. All telephone calls are recorded for your protection
and you will be asked for information to verify your identity. Given these
precautions, unless you have specifically indicated on your application that
you do not want the telephone redemption feature, you may be responsible for
any fraudulent telephone orders. If appropriate precautions have not been
taken by the Transfer Agent, the Transfer Agent may be liable for losses due
to unauthorized transactions.
REDEMPTIONS WITHIN 10 DAYS OF INVESTMENT
When you have made an investment by check, you cannot redeem any portion of
it until the Transfer Agent is satisfied that the check has cleared (which
may require up to 10 business days). You can avoid this delay by purchasing
shares with a certified check.
REDEMPTION IN KIND
The Funds reserve the right to make payment in securities rather than cash,
known as "redemption in kind." This could occur under extraordinary
circumstances, such as a very large redemption that could affect Fund
operations (for example, more than 1% of a Fund's net assets). If a Fund
deems it advisable for the benefit of all shareholders, redemption in kind
will consist of securities equal in market value to your shares. When you
convert these securities to cash, you will pay brokerage charges.
REFUSAL OF REDEMPTION REQUEST
Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission in order to protect
remaining shareholders.
CLOSING OF SMALL ACCOUNTS
If your account falls below $1,000 ($250 if you are an employee of the
Advisor, or one of its affiliates), a Fund may ask you to increase your
balance. If it is still below $1,000 (or $250) after 60 days, the Fund may
close your account and send you the proceeds.
UNDELIVERABLE REDEMPTION CHECKS
For any shareholder who chooses to receive distributions in cash: If
distribution checks (1) are returned and marked as "undeliverable" or (2)
remain uncashed for six months, your account will be changed automatically so
that all future distributions are reinvested in your account. Checks that
remain uncashed for six months will be canceled and the money reinvested in
the appropriate Fund.
20
<PAGE> 22
SHAREHOLDER INFORMATION
-
GENERAL POLICY ON REDEMPTION OF S SHARES
If, on any Business Day that M&T Bank, any of its banking affiliates and the
particular Service Organization are open for business, withdrawals and
charges to your sweep account ("Sweep Account"), including without limitation
check transactions, exceed deposits and credits, M&T Bank, any of its banking
affiliates or the particular Service Organization, as applicable, will
transmit a redemption order on your behalf to the Prime Money Market Fund in
the dollar amount of that day's amount net of all deposits, withdrawals,
charges and credits made to and from a deposit account. If your Sweep Account
with M&T Bank, any of its banking affiliates or the particular Service
Organization, as applicable, is closed as described in the materials
explaining the various features and operations of the Sweep Account (the
"Sweep Materials"), M&T Bank, any of its banking affiliates or the particular
Service Organization, as applicable, will normally transmit a redemption
request on your behalf to the Prime Money Market Fund for the balance of the
S Shares of the Prime Money Market Fund held through your Sweep Account.
Redemptions are effected on a Business Day at the net asset value per share
next determined after receipt of the redemption order. It is the
responsibility of M&T Bank, any of its banking affiliates or the particular
Service Organization to transmit the redemption order and credit its
customer's Transaction Account with the redemption proceeds on a timely
basis. M&T Bank, any of its banking affiliates or the Service Organization
may withhold redemption proceeds pending check collection or processing or
other reasons all as set forth more fully in the Sweep Materials.
21
<PAGE> 23
SHAREHOLDER INFORMATION
-
EXCHANGING YOUR SHARES
INSTRUCTIONS FOR EXCHANGING SHARES
Exchanges may be made by sending a written request to:
Governor Funds
P.O. Box 182707
Columbus, OH 43218-2707
or by calling 1-800-766-3960
You can exchange your shares in one Fund for shares of another Fund of
Governor Funds. No transaction fees
are charged for exchanges; however,
your exchange may be subject to
sales charges.
You must meet the minimum investment requirements for the Fund into which
you are exchanging. Exchanges from
one Fund to another are taxable.
Please provide the following information:
- Your name and telephone number
- The exact name on your account and account number
- Taxpayer identification number (usually your Social Security number)
- Dollar value or number of shares to be exchanged
- The name of the Fund from which the exchange is to be made
- The name of the Fund into which the exchange is being made
See "General Policies on Selling your Shares" for important information about
telephone transactions.
NOTES ON EXCHANGES
When exchanging from a Fund that has no sales charge to a Fund with a sales
charge, you will pay the difference.
The Exchange Privilege may be changed or eliminated at any time.
Be sure to read the Prospectus carefully of any Fund into which you wish to
exchange shares.
The exchange privilege is available only in states where shares of the new
Fund may be sold.
All exchanges are based on the relative net asset value next determined after
the exchange order is received by the Funds.
SERVICE ORGANIZATIONS
Service Organizations may provide certain administrative services for its
customers who invest in the Funds through accounts maintained at that Service
Organization. The Funds, under servicing agreements with the Service
Organization, will pay the Service Organization an annual rate up to .25% of
each Fund's average daily net assets for these services, which include:
- receiving and processing shareholder orders
- performing the accounting for customers' sub-accounts
- answering questions and handling correspondence for customer accounts
- acting as the shareholder of record for customer accounts
- issuing shareholder reports and transaction confirmations
- processing dividend and distribution payments from the Funds on behalf of
customers
22
<PAGE> 24
SHAREHOLDER INFORMATION
-
SERVICE ORGANIZATIONS
CONTINUED
- providing customers with a service that invests the assets of their
accounts in shares of the Funds pursuant to specific or pre-authorized
instructions
- maintaining and supporting systems to support cash management services such
as sweep accounts for S Shares
Investors who purchase, sell or exchange shares of the Funds through a
customer account maintained at a Service Organization may be charged extra
for other services which are not specified in the servicing agreement with
the Fund but are covered under separate fee schedules provided by the Service
Organization to its customers. Customers with accounts at Service
Organizations should consult their Service Organization for information
concerning their sub-accounts. The Advisor, its affiliates or administrators
also may pay Service Organizations for rendering services to customers'
sub-accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Any income a Fund receives in the form of interest is paid out, less
expenses, to its shareholders as dividends. Each Fund declares dividends from
net investment income on every business day. Dividends on the Funds are paid
monthly. Capital gains, if any, for the Funds are distributed at least
annually.
Dividends on each share of a Fund are determined in the same manner and are
paid in the same amounts irrespective of class, except that the Investor
Shares and the S Shares of the Prime Money Market Fund each bear all expenses
of its Administrative Services Plan.
Each Fund contemplates declaring as dividends each year all or substantially
all of its taxable income. Each Fund expects that all or substantially all of
its distributions will consist of ordinary income. You will be subject to
income tax on Fund distributions regardless whether they are paid in cash or
reinvested in additional shares. You will be notified annually of the tax
status of distributions to you.
The one major exception to these tax principles is that distributions on, and
sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable.
Shareowners may also be subject to state and local taxes on distributions and
redemptions. State income taxes may not apply however, to the portions of
each Fund's distributions, if any, that are attributable to interest on
federal securities or interest on securities of the particular state or
localities within the state.
The foregoing is only a summary of certain tax considerations under current
law, which may be subject to change in the future. Shareholders who are
nonresident aliens, foreign trusts or estates, or foreign corporations or
partnerships, may be subject to different United States federal income tax
treatment. You should consult your tax adviser for further information
regarding federal, state, local and/or foreign tax consequences relevant to
your specific situation.
23
<PAGE> 25
[LOGO]
FINANCIAL HIGHLIGHTS PRIME MONEY MARKET FUND
-
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Funds'
financial performance. Certain information reflects financial results for a
single fund share. The total returns in the table represent the rate that an
investor would have earned [or lost] on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by KPMG LLP whose report, along with the Funds' financial statements,
are included in the annual report, which is available upon request.
<TABLE>
<CAPTION>
INVESTOR INVESTOR
SHARES S SHARES SHARES S SHARES
---------- ---------- ---------- ------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2000 2000 1999(b) 1999(b) 1998 1997(a)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES:
Net investment income 0.05 0.05 0.05 0.01 0.05 0.04
----------------------------------------------------------------------------------------------------------------------
Total from Investment Activities 0.05 0.05 0.05 0.01 0.05 0.04
----------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS FROM:
Net investment income (0.05) (0.05) (0.05) (0.01) (0.05) (0.04)
----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.05) (0.05) (0.05) (0.01) (0.05) (0.04)
----------------------------------------------------------------------------------------------------------------------
Net change in net asset value per
share -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------------------------------------------------------------------------------
Total Return 5.46% 5.25% 4.80% 0.85%(c) 5.19% 3.73%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, at end of period (in
thousands) $282,014 $ 3,476 $261,561 $ 685 $217,861 $95,850
Ratio of expenses to average net
assets 0.47% 0.67% 0.49% 0.68%(d) 0.48% 0.36%(d)
Ratio of net investment income to
average net assets 5.34% 5.30% 4.68% 4.23%(d) 5.14% 5.02%(d)
Ratio of expenses to average net
assets* 0.70% 0.90% 0.80% 0.91%(d) 0.76% 0.70%(d)
</TABLE>
* During the period certain fees were voluntarily reduced and/or reimbursed. If
such voluntary fee reductions and/or reimbursements had not occurred, the
ratio would have been as indicated.
(a) Commencement of operations of the Fund was October 7, 1996.
(b) Effective April 19, 1999, the Fund designated the existing shares as
Investor Shares and commenced the offering of S Shares.
(c) Not annualized.
(d) Annualized.
24
<PAGE> 26
U.S. TREASURY OBLIGATIONS
FINANCIAL HIGHLIGHTS MONEY MARKET FUND
-
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30,
2000 1999 1998(a)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES:
Net investment income 0.05 0.04 0.05
-------------------------------------------------------------------------------------------------------
Total from Investment Activities 0.05 0.04 0.05
-------------------------------------------------------------------------------------------------------
DISTRIBUTIONS FROM:
Net investment income (0.05) (0.04) (0.05)
-------------------------------------------------------------------------------------------------------
Total Distributions (0.05) (0.04) (0.05)
-------------------------------------------------------------------------------------------------------
Net change in net asset value per share -- -- --
-------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------------------------------------------
Total Return 4.76% 4.28% 4.78%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, at end of period (in thousands) $17,919 $19,575 $23,520
Ratio of expenses to average net assets 0.69% 0.72% 0.71%
Ratio of net investment income to average net
assets 4.68% 4.20% 4.64%
Ratio of expenses to average net assets* 0.95% 1.05% 1.07%
</TABLE>
* During the period certain fees were voluntarily reduced and/or reimbursed. If
such voluntary fee reductions and/or reimbursements had not occurred, the
ratio would have been as indicated.
(a) Commencement of operations of the Fund was July 1, 1997.
25
<PAGE> 27
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 28
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 29
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 30
FOR MORE INFORMATION ABOUT THE FUNDS, THE FOLLOWING
DOCUMENTS ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS:
The Funds' annual and semi-annual reports to shareholders contain detailed
information on the Funds' investments. In the annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Funds' performance during their last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Funds, including their
operations and investment policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
--------------------------------------------------------------------------------
You can get free copies of annual/semi-annual reports and the SAI, Prospectuses
of other Governor Funds, or request other information and discuss your questions
about the Funds by contacting a broker or bank that sells the Funds, or you can
contact the Funds directly at:
Governor Funds
P.O. Box 182707
Columbus, OH 43218-2707
Telephone: 1-800-766-3960
www.governorfunds.com
--------------------------------------------------------------------------------
YOU CAN REVIEW AND COPY THE FUNDS' REPORTS AND SAIS AT THE PUBLIC REFERENCE ROOM
OF THE SECURITIES AND EXCHANGE COMMISSION
You can get copies:
o For a duplicating fee, by writing the Public Reference Section of the
Commission, Washington D.C. 20549-6009 or by electronic request to
[email protected]. Information on the operation of the Public
Reference Section may be obtained by calling 1-202-942-8090.
o Free from the Commission's website at http://www.sec.gov
(Investment Company Act file no. 811-09029)
MT-1618
