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Prospectus LYON STREET INSTITUTIONAL
MONEY MARKET FUND
June 1, 1999
as amended and restated January 4, 2000
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NEED INFORMATION?
Call 1-800-633-KENT (5368) or your
Investment Representative.
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THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THE SHARES DESCRIBED IN
THIS PROSPECTUS OR DETERMINED WHETHER THIS PRO-
SPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO TELLS
YOU OTHERWISE IS COMMITTING A CRIME.
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TABLE OF
CONTENTS
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Carefully review RISK/RETURN SUMMARY AND FUND EXPENSES 2
this important section,
which summarizes the
Fund's investments,
risks and fees.
Review this section INVESTMENT OBJECTIVES, STRATEGIES AND RISKS 5
for information on
investment strategies
and their risks.
FUND MANAGEMENT
Review this section Investment Adviser 7
for details on the Distributor, Administrator and Sub-Administrator 7
people and organizations
who oversee the Fund.
SHAREHOLDER INFORMATION
Review this section Pricing of Fund Shares 8
for details on how Purchasing and Adding to Your Shares 9
shares are valued, how Selling Your Shares 10
to purchase, sell and General Policies on Selling Shares 11
exchange shares, Exchanging Your Shares 12
related charges and Dividends, Distributions and Taxes 13
payments of dividends
and distributions
BACK COVER
Where to learn more about this Fund
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1
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RISK/RETURN SUMMARY AND FUND EXPENSES
The following is a summary of certain key information about the Fund. You will
find additional information about the Fund, including a detailed description of
the risks of an investment in the Fund, after this summary.
RISK/RETURN SUMMARY OF THE LYON STREET INSTITUTIONAL MONEY MARKET FUND
Investment Objectives The Fund seeks current income from short-term
securities while preserving capital and main-
taining liquidity.
Principal Investment The Fund is a money market fund that seeks to
Strategies maintain a stable net asset value of $1.00 per
share. The Fund invests in a broad range of
short-term instruments including commercial pa-
per, short-term corporate obligations and
short-term obligations issued or guaranteed by
the United States Government, its agencies or
instrumentalities.
Principal Investment Risks The Fund's performance per share will change
daily based on many factors, including, the
quality of the instruments in the Fund's in-
vestment portfolio, national and international
economic conditions and general market condi-
tions. Changes in the interest rate will affect
the yield or value of the Fund's investments in
debt securities.
. An investment in the Fund is not a deposit in
a bank and is not insured or guaranteed by
the Federal Deposit Insurance Corporation or
any other govern- ment agency.
. Although the Fund seeks to preserve the value
of your investment at $1.00 per share, it is
possible to lose money by investing in the
Fund.
. If an issuer fails to pay interest or repay
principal, the value of your investment could
decline.
. Because the Fund invests in short-term secu-
rities, a decline in interest rates will af-
fect the Fund's yield as these securities ma-
ture or are sold and the Fund purchases new
short-term securities with a lower yield.
. 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, a lack of adequate company
information, and lack of government regula-
tion.
. There can be no assurance that the investment
objective of the Fund will be achieved.
2
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RISK/RETURN SUMMARY AND FUND EXPENSES
Who may want to invest? Consider investing in the Fund if you:
. 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
3
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RISK/RETURN SUMMARY AND FUND EXPENSES
This table describes the FEES AND EXPENSES
fees and expenses that
you may pay if you buy Shareholder Fees
and hold shares of the (fees paid directly from your investment)
Lyon Street
Institutional Money Maximum Sales Charge (Load) Imposed on
Market Fund. Purchases None
Annual Fund Operating Expenses/1/
(expenses that are deducted from Fund assets)
Management Fees 0.40%
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Distribution and Service (12b-1) Fees None
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Other Expenses 0.27%
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Total Annual Fund Operating Expenses 0.67%
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Fee Waiver 0.45%
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Net Annual Fund Operating Expenses 0.22%
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/1/ The Adviser is currently limiting the Management Fee to .10% of average
daily net assets. The Administrator is waiving a portion of the administration
fee so that Other Expenses are expected to be .12% of average daily net assets.
Total Annual Fund Operating Expenses after these fee waivers are expected to be
.22% of average daily net assets. These waivers may be revised or canceled at
any time.
Example
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes:
. $10,000 investment
. 5% annual return
. redemption at the end of each period
. no changes in the Fund's operating expenses, except for the expiration of the
current contractual fee waivers on December 31, 2000
Although your actual costs may be higher or lower, based upon these
assumptions, your costs would be:
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1 3
Lyon Street Institutional Money Market Fund Year Years
$22 $168
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4
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INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
Investment Objectives, Policies and Strategies
The Fund's investment objective is to seek current income from
short-term securities while preserving capital and maintaining
liquidity. As a money market fund, the Fund must meet the
requirements of the Securities and Exchange Commission's Rule
2a-7. This rule imposes strict requirements on the investment
quality, maturity, and diversification of the Fund's
investments. Under Rule 2a-7, the Fund's investments must have
a remaining maturity of no more than 397 days, and its
investments must maintain an average weighted maturity that
does not exceed 90 days.
With respect to substantially all of its securities, the Fund
will only buy a security if it has the highest short-term
rating 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. If the money
market instrument is not rated, the Adviser must determine that
it is of comparable quality to eligible rated instruments. In
addition, the Fund considers an investment's projected rate of
return and whether the investment meets the requirements of
Rule 2a-7.
The Statement of Additional Information has more detailed
information about the investment policies and strategies of the
Fund.
Investment Risks
The Fund's primary risks are interest rate risk and credit
risk. Because the Fund invests in short-term securities, a
decline in interest rates will affect the Fund's yield as these
securities mature or are sold and the Fund purchases new short-
term securities with a lower yield. Generally, an increase in
interest rates causes the value of a debt instrument to
decrease. The change in value for shorter-term securities is
usually smaller than for securities with longer maturities.
Because the Fund invests in securities with short maturities
and seeks to maintain a stable net asset value of $1.00 per
share, it is possible, though unlikely, that an increase in
interest rates would change the value of your investment.
Credit risk is the possibility that a security's credit rating
will be downgraded or that the issuer of the security will
default (fail to make scheduled interest and principal
payments). The Fund invests in highly-rated securities to
minimize credit risk. Under Rule 2a-7, 95% of a money market
fund's holdings must be rated in the highest credit category
(e.g., A-1 or A-1+) and the remaining 5% must be rated no lower
than the second highest credit category.
The Fund's investments in U.S. dollar-denominated obligations
of foreign branches of U.S. banks and U.S. branches of foreign
banks may be subject to foreign risk. Foreign investments
subject the Fund to investment risks different from those
associated with domestic investments. Foreign securities
issuers are usually subject to less regulation than U.S.
issuers. Reporting, accounting, and auditing standards of
foreign countries are less stringent, in some cases
significantly, than U.S. standards. Foreign risk includes
nationalization, expropriation or confiscatory taxation,
currency blockage, political changes or diplomatic developments
that could adversely affect the Fund's investments.
The Fund also is subject to management risk because it is an
actively managed portfolio. The Fund's Adviser uses its
investment techniques and risk analyses in making investment
decisions for the Fund, but there is no guarantee that its
techniques will produce the intended result.
5
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INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
There can be no assurance that the investment objective of the
Fund will be achieved. In addition, the Fund's investment
policies, as well as the relatively short maturity of
obligations purchased by the Fund, may result in frequent
changes in the Fund's portfolio, which may give rise to taxable
gains.
Year 2000 Risks
Like other funds and business organizations around the world,
the Fund could be adversely affected if the computer systems
used by the Adviser and the Fund's other service providers do
not properly process and calculate date-related information for
the year 2000 and beyond. In addition, year 2000 issues may
adversely affect companies in which the Fund invests where, for
example, such companies incur substantial costs to address year
2000 issues or suffer losses caused by the failure to
adequately or timely do so.
The Fund has been assured that the Adviser and other service
providers have developed and are implementing clearly defined
and documented plans intended to minimize risks to services
critical to the Fund's operations associated with year 2000
issues. The Adviser and the Fund's service providers have
likewise sought assurances from their respective vendors and
suppliers that such entities are addressing any year 2000
issues.
Based on the information currently available, the Fund does not
anticipate any material adverse impact on the business
operations or financial conditions of the Adviser, the Fund's
service providers or the Fund due to year 2000 issues. However,
the ultimate costs or consequences of incomplete or untimely
resolution of year 2000 issues by the Adviser or the Fund's
service providers may not be fully evident as of the date of
this prospectus.
6
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FUND MANAGEMENT
INVESTMENT ADVISER
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The Fund is advised by Lyon Street Asset Management Company, a
wholly-owned subsidiary of Old Kent Bank. Lyon Street maintains
offices at 111 Lyon Street, NW, Grand Rapids, Michigan 49503.
Old Kent Bank is a wholly-owned subsidiary of Old Kent
Financial Corporation, which is a financial services company
with total assets as of September 30, 1999 of approximately
$17.6 billion. The Investment Management Group ("IMG") at Lyon
Street has managed the Kent Funds since their inception. The
Lyon Street Institutional Money Market Fund is one of fifteen
investment portfolios of the Kent Funds. Prior to 1998, IMG
managed the Kent Funds as a division of Old Kent Bank. Old Kent
Bank has managed the financial assets of individual and
institutional investors for over 100 years. Lyon Street employs
an experienced staff of professional investment analysts,
portfolio managers and traders, and uses several proprietary
computer-based systems in conjunction with fundamental analysis
to identify investment opportunities.
Lyon Street is entitled to receive management fees in the
amount of 0.40% of average daily net assets of the Fund as its
investment adviser. However, Lyon Street is waiving 0.30% of
the management fee, resulting in net management fees of 0.10%.
This waiver may be revised or cancelled at any time.
DISTRIBUTOR, ADMINISTRATOR AND SUB-ADMINISTRATOR
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Old Kent Securities Corporation ("OKSC") serves as the
Administrator of the Fund. OKSC provides management and
administrative services to the Fund, including providing office
space, equipment and clerical personnel to the Fund and
supervising custodial, auditing, valuation, bookkeeping, legal
and dividend disbursing services. OKSC is located at 111 Lyon
Street NW, Grand Rapids, Michigan 49503.
BISYS Fund Services Ohio, Inc. ("BISYS") provides certain
administrative services to the Fund pursuant to a Sub-
Administration Agreement between OKSC and BISYS. BISYS also
provides certain fund accounting and transfer agency services
to the Trust pursuant to a Sub-Fund Accounting Agreement and a
Sub-Transfer Agency Agreement between OKSC and BISYS. As
compensation for its services, BISYS receives fees from OKSC.
The fees paid to BISYS by OKSC for such services come out of
OKSC's fees and are not an additional charge to the Funds.
BISYS is located at 3435 Stelzer Road, Columbus, Ohio 43219.
Kent Fund Distributors, Inc., 3435 Stelzer Road, Columbus, Ohio
43219 (the "Distributor") serves as distributor for the Fund's
shares.
The Statement of Additional Information has more detailed
information about the Adviser and other service providers.
7
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SHAREHOLDER INFORMATION
PRICING OF FUND SHARES
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How NAV is
Calculated The Fund's net asset value, or NAV, is expected to be
The NAV is calcu- constant at $1.00 per share, although this value is
lated by adding not guaranteed. The NAV is determined at 2 p.m.
the total value of Eastern time on days the New York Stock Exchange is
a Fund's invest- open. Your order for purchase, sale or exchange of
ments and other shares is priced at the next NAV calculated after
assets, your order is received in good order by the Fund on
subtracting its any day that the New York Stock Exchange is open for
liabilities and business. For example, if you place a purchase order
then dividing that to buy shares of the Fund, it must be received in
figure by the num- good order by 2:00 p.m. Eastern time in order to
ber of outstanding receive the NAV calculated at 2:00 p.m. that day. If
shares of the your order is received in good order after 2:00 p.m.,
Fund: you will receive the NAV calculated at 2:00 p.m.
Eastern Time the next day. The Fund values its
securities at their amortized cost. The amortized
cost method involves valuing a portfolio security at
its cost and thereafter applying a constant
amortization to maturity of the difference between
the principal amount due at maturity and initial
cost.
NAV =
Total Assets -
Liabilities
---------------
Number of
Shares
Outstanding
8
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SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES
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Minimum Initial Investment
$100,000
Subsequent
investments may
be made in any
amount.
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The Fund may waive its minimum investment requirements, and the Distributor may
reject a purchase order if the Distributor considers it in the best interest of
the Fund and its shareholders.
How Can I Purchase Shares?
You can purchase shares by taking the following steps:
1. To open an account, call 1-800-633-KENT (5368) to obtain an account or
wire identification number and to place a purchase order.
2. Wire federal funds, which must be received by the Fund no later than
the close of business the day the purchase order is placed. You must
establish an account with the Fund prior to sending the wire. The wire
must include your Fund account number.
You should note that (i) a purchase of shares will not be completed until the
Fund receives the purchase proceeds and (ii) banks may charge for wiring
federal funds to the Fund. You may obtain information on how to wire funds from
any national bank and certain state banks.
Dividends and Distributions
All dividends and distributions will be automatically reinvested unless you
request otherwise.
If you wish to receive distributions in cash, notify the Fund at 1-800-633-KENT
(5368) and your distributions will be sent by electronic funds transfer
directly to your designated bank account.
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Avoid 31% Tax Withholding
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to shareholders who have not provided the
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.
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9
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SHAREHOLDER INFORMATION
SELLING YOUR SHARES
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Instructions for Selling Shares
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WITHDRAWING MONEY FROM YOUR FUND
INVESTMENT
As a mutual fund
shareholder, you are
technically selling
shares when you re-
quest a withdrawal in
cash. This is also
known as redeeming
shares or a redemp-
tion of shares.
You may sell your shares at any time.
Your sales price will be the next NAV
after your sell order is received in
good order by the Fund.
You can redeem shares on any day that
the New York
Stock Exchange is open for business. Shares will not be redeemed by the Fund
unless all required documents have been received by the Fund.
The Fund may temporarily stop redeeming shares when the New York Stock Exchange
is closed or trading on the New York Stock Exchange is restricted, when an
emergency exists and the Fund cannot sell its assets or accurately determine
the value of its assets or if the Securities and Exchange Commission orders the
Fund to stop redemptions.
If you intend to redeem shares worth more than $1,000,000, you should notify
the Fund at least one business day in advance.
Redemption proceeds will be wired in federal funds only to the commercial bank
and account number listed on your account application. To change the bank
account, you should call the Fund at 1-800-633-KENT (5368) and request the
appropriate form.
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By telephone Call 1-800-633-KENT (5368) with redemption instruc-
tions.
Redemption orders received prior to 2:00 p.m. east-
ern standard time will be settled on the same day.
- --------------------------------------------------------------------------------
By mail 1.Call 1-800-633-KENT (5368) to request redemption
forms or write a letter of instruction indicating:
. your account name and number
. amount or number of shares you wish to redeem
. address where your check should be sent
. account owner signature
. if a stock certificate has been issued, you must
sign the back of the certificate and submit it
together with the redemption request.
2.Mail to:
Lyon Street Institutional Money Market Fund
P.O. Box 182201
Columbus, Ohio 43218-2201
10
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SHAREHOLDER INFORMATION
GENERAL POLICIES ON SELLING SHARES
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General Redemption
Information During periods of unusual market activity it may
be difficult to reach the Fund by telephone. In
such cases, shareholders should follow the
procedures for redeeming by mail or through a
broker. Neither the Fund nor any of its service
providers will be liable for following telephone
instructions reasonably believed to be genuine
unless it acts with willful misfeasance, bad
faith or gross negligence. In this regard, the
Fund and its transfer agent will employ
procedures designed to provide reasonable
assurance that instructions by telephone are
genuine. Such procedures will include the
requirement that personal identification be
provided before accepting a telephone
redemption.
The Fund reserves the right to redeem an account
if its value falls below $100,000 as a result of
redemptions or exchanges (but not as a result of
a decline in net asset value). A shareholder
will be notified in writing and allowed 60 days
to increase the value of the account to the
minimum investment level.
Payment of Redemption You can generally expect to receive redemption
Proceeds proceeds within seven days of receipt of a
request. Payment for shares may be delayed under
extraordinary circumstances or as permitted by
the SEC in order to protect remaining
shareholders.
Redemption in The Fund reserves the right to make payment in
Kind securities rather than cash, known as a
"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 the
Fund's net assets). If the Fund deems it
advisable for the benefit of all shareholders, a
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.
IMPORTANT INFORMATION REGARDING STOCK
CERTIFICATES AND REDEMPTION NOTICES. Signatures
on all redemption notices and stock certificates
must be guaranteed by a U.S. stock exchange mem-
ber, a U.S. commercial bank or trust company or
other entity approved by the Fund, unless the
amount redeemed is less than $50,000 and the ac-
count address has been the same for at least 90
days. The Fund can change the above requirements
or require additional documents at any time.
11
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SHAREHOLDER INFORMATION
EXCHANGING YOUR SHARES
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Instructions for Exchanging Shares
Exchanges may be made by sending a
written request to:
Kent Funds
P.O. Box 182201
Columbus, Ohio 43218-2201
or by calling 1-800-633-KENT
(5368)
Please provide the following
information:
. Your name and telephone number
. The exact name on your account and account number
. Taxpayer identification number (or 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 and the account
number
. The name of the Fund into which the exchange is being made, and if this is
an existing account, please provide the account number
You may acquire In stitutional Shares of any other investment portfolio of the
Kent Funds by exchanging shares of the Fund for shares of the new fund. In
effect, you would be redeeming (reselling to the Fund) shares of the old fund
and purchasing shares of the new fund. Exchanges are effected at the net asset
value next determined after the exchange request is received in good order by
the Fund. Be sure to read carefully the prospectus of any fund into which you
wish to exchange shares.
You must meet the minimum investment requirements for the Fund into which you
are exchanging. Exchanges from one fund to another are taxable.
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IMPORTANT INFORMATION ABOUT EXCHANGES
Kent Funds may disallow exchanges of shares if a shareholder has made more than
five exchanges between investment portfolios offered by the Kent Funds in a
year, or more than three exchanges in a calendar quarter. Although unlikely,
the Kent Funds may reject any exchanges or change or terminate rights to ex-
change shares. The exchange privilege is available only in states where shares
of the new fund may be sold.
12
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SHAREHOLDER INFORMATION
DIVIDENDS, DISTRIBUTIONS AND TAXES
Any income the Fund receives is paid out, less expenses, in the form of
dividends to its shareholders. The Fund declares dividends from net investment
income on every business day. Dividends on the Fund are paid monthly. Capital
gains, if any, for the Fund are distributed at least annually.
The Fund contemplates declaring as dividends each year all or substantially all
of its taxable income, including its net capital gain (the excess of long-term
capital gain over short-term capital loss). You will be subject to income tax
on these distributions regardless of whether they are paid in cash or
reinvested in additional shares. Distributions attributable to the net capital
gain of the Fund will be taxable to you as long-term capital gain, regardless
of how long you have held your shares. Other Fund distributions will generally
be taxable as ordinary income.
The Fund expects the dividends will primarily consist of ordinary income or, if
any, short-term capital gains as opposed to long-term capital gains.
You should note that if you purchase shares just prior to a capital gain
distribution, the purchase price will reflect the amount of the upcoming
distribution, but you will be taxable on the entire amount of the distribution
received, even though, as an economic matter, the distribution simply
constitutes a return of capital. This is known as "buying into a dividend."
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.
Taxable dividends paid in January may be taxable as if they had been paid the
previous December. Each year you will receive in the mail federal tax
information on distributions paid by the Fund.
Generally, shareholders may also be subject to state and local taxes on
distributions and redemptions. State income taxes may not apply, however, to
the portions of the Fund's distributions, if any, that are attributable to
interest on U.S. Government securities or on securities of a particular state.
13
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The following additional information about the Fund is available to you free
upon request:
Annual/Semi-Annual Reports:
The Fund's annual and semi-annual reports to shareholders contain detailed
information on the Fund's investments. In the annual report, you will find a
discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
Statement of Additional Information (SAI):
The SAI provides more detailed information about the Fund, 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 and Semi-Annual Reports and the SAI, request
other information and discuss your questions about the Kent Funds by contacting
a broker or other financial institution that sells the Kent Funds. In addition,
you may contact the Kent Funds at: Kent Funds, P.O. Box 102201, Columbus, Ohio
43218-2201 or:
-----------------------------------
Telephone: 1-800-633-KENT (5368)
Internet: http://www.kentfunds.com*
-----------------------------------
You can review the Fund's reports and SAI at the Public Reference Room of the
Securities and Exchange Commission. You can get copies:
. For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
. At no charge from the Commission's Website at http://www.sec.gov
* The Fund's website is not part of this Prospectus.
Investment Company Act file no. 811-4824
KKF-0391 (1/00)
