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<PAGE> PAGE 2
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 9
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 15
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<PAGE> PAGE 17
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<PAGE> PAGE 18
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<PAGE> PAGE 20
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<PAGE> PAGE 21
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<PAGE> PAGE 22
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<PAGE> PAGE 23
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<PAGE> PAGE 24
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<PAGE> PAGE 25
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<PAGE> PAGE 26
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<PAGE> PAGE 28
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<PAGE> PAGE 29
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<PAGE> PAGE 30
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<PAGE> PAGE 31
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<PAGE> PAGE 32
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<PAGE> PAGE 33
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<PAGE> PAGE 34
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<PAGE> PAGE 35
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<PAGE> PAGE 36
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<PAGE> PAGE 37
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<PAGE> PAGE 38
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<PAGE> PAGE 39
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<PAGE> PAGE 40
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<PAGE> PAGE 41
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008 A000801 KEYCORP MUTUAL FUND ADVISERS, INC.
008 B000801 A
008 C000801 801-49867
008 D010801 CLEVELAND
008 D020801 OH
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008 A000802 SOCIETY ASSET MANAGEMENT, INC.
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<PAGE> PAGE 42
008 D020802 OH
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015 A000801 KEYTRUST COMPANY OF OHIO
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<PAGE> PAGE 43
039 000800 N
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<PAGE> PAGE 44
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064 A000800 N
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069 000800 N
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070 A020800 N
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070 E020800 N
070 F010800 Y
070 F020800 N
070 G010800 Y
070 G020800 N
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070 H020800 N
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070 I020800 N
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<PAGE> PAGE 45
070 L020800 N
070 M010800 N
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<PAGE> PAGE 46
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008 A000901 KEYCORP MUTUAL FUND ADVISERS, INC.
008 B000901 A
008 C000901 801-49867
008 D010901 CLEVELAND
008 D020901 OH
008 D030901 44114
008 A000902 SOCIETY ASSET MANAGEMENT, INC.
008 B000902 S
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008 D030902 44114
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<PAGE> PAGE 47
015 C020901 NY
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<PAGE> PAGE 48
034 000900 Y
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<PAGE> PAGE 49
058 C000900 N
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067 000900 N
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<PAGE> PAGE 50
070 H020900 N
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<PAGE> PAGE 51
072AA000900 5509
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008 A001001 KEYCORP MUTUAL FUND ADVISERS, INC.
008 B001001 A
008 C001001 801-49867
008 D011001 CLEVELAND
008 D021001 OH
008 D031001 44114
008 A001002 SOCIETY ASSET MANAGEMENT, INC.
<PAGE> PAGE 52
008 B001002 S
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008 D031002 44114
015 A001001 KEYTRUST COMPANY OF OHIO
015 B001001 C
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<PAGE> PAGE 53
029 001000 Y
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<PAGE> PAGE 54
048 K021000 0.000
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<PAGE> PAGE 55
070 E011000 Y
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<PAGE> PAGE 56
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<PAGE> PAGE 57
008 A001101 KEYCORP MUTUAL FUND ADVISERS, INC.
008 B001101 A
008 C001101 801-49867
008 D011101 CLEVELAND
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008 A001102 SOCIETY ASSET MANAGEMENT, INC.
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<PAGE> PAGE 58
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<PAGE> PAGE 59
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<PAGE> PAGE 60
067 001100 Y
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<PAGE> PAGE 61
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<PAGE> PAGE 62
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008 B001201 A
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008 D011201 CLEVELAND
008 D021201 OH
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008 A001202 SOCIETY ASSET MANAGEMENT, INC.
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015 A001201 KEYTRUST COMPANY OF OHIO
015 B001201 C
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<PAGE> PAGE 63
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042 F001200 0
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<PAGE> PAGE 64
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<PAGE> PAGE 65
066 A001200 Y
066 B001200 N
066 C001200 N
066 D001200 Y
066 E001200 N
066 F001200 N
066 G001200 N
067 001200 N
068 A001200 N
068 B001200 N
069 001200 N
070 A011200 Y
070 A021200 N
070 B011200 Y
070 B021200 N
070 C011200 Y
070 C021200 N
070 D011200 Y
070 D021200 N
070 E011200 Y
070 E021200 N
070 F011200 Y
070 F021200 N
070 G011200 Y
070 G021200 N
070 H011200 Y
070 H021200 N
070 I011200 Y
070 I021200 N
070 J011200 Y
070 J021200 N
070 K011200 Y
070 K021200 Y
070 L011200 Y
070 L021200 N
070 M011200 N
070 M021200 N
070 N011200 Y
070 N021200 N
070 O011200 Y
070 O021200 N
070 P011200 N
070 P021200 N
070 Q011200 N
070 Q021200 N
070 R011200 Y
070 R021200 N
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<PAGE> PAGE 66
072 A001200 12
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072 R001200 89
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072 Y001200 62
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<PAGE> PAGE 67
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008 B001301 A
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008 A001302 SOCIETY ASSET MANAGEMENT, INC.
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015 A001301 KEYTRUST COMPANY OF OHIO
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<PAGE> PAGE 68
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040 001300 N
041 001300 N
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<PAGE> PAGE 69
042 F001300 0
042 G001300 0
042 H001300 0
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045 001300 Y
046 001300 N
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<PAGE> PAGE 70
062 H001300 0.0
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062 R001300 0.0
066 A001300 Y
066 B001300 N
066 C001300 Y
066 D001300 N
066 E001300 N
066 F001300 N
066 G001300 N
067 001300 N
068 A001300 N
068 B001300 N
069 001300 Y
070 A011300 Y
070 A021300 N
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070 B021300 N
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070 D011300 Y
070 D021300 Y
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070 E021300 N
070 F011300 Y
070 F021300 N
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070 G021300 N
070 H011300 Y
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070 I011300 Y
070 I021300 N
070 J011300 Y
070 J021300 N
070 K011300 Y
070 K021300 N
070 L011300 N
070 L021300 N
070 M011300 N
070 M021300 N
070 N011300 Y
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070 O011300 Y
<PAGE> PAGE 71
070 O021300 N
070 P011300 N
070 P021300 N
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070 R011300 Y
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<PAGE> PAGE 72
074 D001300 0
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008 A001401 KEYCORP MUTUAL FUND ADVISERS, INC.
008 B001401 A
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008 D011401 CLEVELAND
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008 D031401 44114
008 A001402 SOCIETY ASSET MANAGEMENT, INC.
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008 D031402 44114
015 A001401 KEYTRUST COMPANY OF OHIO
015 B001401 C
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015 E031401 X
024 001400 Y
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<PAGE> PAGE 73
025 D001401 1860
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<PAGE> PAGE 74
037 001400 N
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055 A001400 N
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056 001400 Y
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058 A001400 N
058 B001400 N
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<PAGE> PAGE 75
060 A001400 Y
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066 A001400 Y
066 B001400 N
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066 D001400 Y
066 E001400 N
066 F001400 N
066 G001400 N
067 001400 N
068 A001400 N
068 B001400 N
069 001400 N
070 A011400 Y
070 A021400 N
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070 B021400 N
070 C011400 Y
070 C021400 N
070 D011400 Y
070 D021400 N
070 E011400 Y
070 E021400 N
070 F011400 Y
070 F021400 N
070 G011400 Y
070 G021400 N
070 H011400 Y
070 H021400 N
070 I011400 Y
070 I021400 N
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<PAGE> PAGE 76
070 J021400 N
070 K011400 Y
070 K021400 N
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070 L021400 N
070 M011400 N
070 M021400 N
070 N011400 Y
070 N021400 N
070 O011400 Y
070 O021400 N
070 P011400 N
070 P021400 N
070 Q011400 N
070 Q021400 N
070 R011400 Y
070 R021400 N
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<PAGE> PAGE 77
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008 B001501 A
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015 A001501 KEYTRUST COMPANY OF OHIO
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<PAGE> PAGE 78
015 E031501 X
024 001500 Y
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<PAGE> PAGE 79
036 B001500 0
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<PAGE> PAGE 80
059 001500 Y
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<PAGE> PAGE 81
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<PAGE> PAGE 82
072CC021500 0
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008 A001601 KEYCORP MUTUAL FUND ADVISERS, INC.
008 B001601 A
008 C001601 801-49867
008 D011601 CLEVELAND
008 D021601 OH
008 D031601 44114
008 A001602 SOCIETY ASSET MANAGEMENT, INC.
008 B001602 S
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008 D011602 CLEVELAND
<PAGE> PAGE 83
008 D021602 OH
008 D031602 44114
015 A001601 KEYTRUST COMPANY OF OHIO
015 B001601 C
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015 C021601 OH
015 C031601 44114
015 E031601 X
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<PAGE> PAGE 84
028 H001600 63
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<PAGE> PAGE 85
048 K011600 0
048 K021600 0.000
055 A001600 Y
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056 001600 Y
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064 A001600 N
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067 001600 N
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069 001600 N
070 A011600 Y
070 A021600 N
070 B011600 Y
070 B021600 N
070 C011600 Y
070 C021600 N
070 D011600 Y
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<PAGE> PAGE 86
070 E021600 N
070 F011600 Y
070 F021600 N
070 G011600 Y
070 G021600 N
070 H011600 Y
070 H021600 N
070 I011600 Y
070 I021600 N
070 J011600 Y
070 J021600 N
070 K011600 Y
070 K021600 N
070 L011600 Y
070 L021600 N
070 M011600 Y
070 M021600 N
070 N011600 Y
070 N021600 N
070 O011600 Y
070 O021600 N
070 P011600 N
070 P021600 N
070 Q011600 N
070 Q021600 N
070 R011600 Y
070 R021600 N
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<PAGE> PAGE 87
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008 A001701 KEYCORP MUTUAL FUND ADVISERS, INC.
<PAGE> PAGE 88
008 B001701 A
008 C001701 801-49867
008 D011701 CLEVELAND
008 D021701 OH
008 D031701 44114
008 A001702 SOCIETY ASSET MANAGEMENT, INC.
008 B001702 S
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008 D011702 CLEVELAND
008 D021702 OH
008 D031702 44114
015 A001701 KEYTRUST COMPANY OF OHIO
015 B001701 C
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015 E031701 X
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<PAGE> PAGE 89
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<PAGE> PAGE 90
048 G021700 0.000
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055 A001700 Y
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<PAGE> PAGE 91
070 B011700 Y
070 B021700 N
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070 D011700 Y
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070 F011700 Y
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070 G021700 N
070 H011700 Y
070 H021700 N
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070 I021700 N
070 J011700 Y
070 J021700 N
070 K011700 Y
070 K021700 N
070 L011700 Y
070 L021700 N
070 M011700 N
070 M021700 N
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070 N021700 N
070 O011700 Y
070 O021700 N
070 P011700 N
070 P021700 N
070 Q011700 N
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070 R011700 Y
070 R021700 N
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<PAGE> PAGE 92
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<PAGE> PAGE 93
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008 A001801 KEYCORP MUTUAL FUND ADVISERS, INC.
008 B001801 A
008 C001801 801-49867
008 D011801 CLEVELAND
008 D021801 OH
008 D031801 44114
015 A001801 KEYTRUST COMPANY OF OHIO
015 B001801 C
015 C011801 CLEVELAND
015 C021801 OH
015 C031801 44114
015 E031801 X
024 001800 Y
025 A001801 GENERAL ELECTRIC CAPITAL CORP.
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<PAGE> PAGE 94
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<PAGE> PAGE 95
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<PAGE> PAGE 96
070 A021800 N
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070 D011800 N
070 D021800 N
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070 G011800 N
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070 H011800 N
070 H021800 N
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<PAGE> PAGE 97
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<PAGE> PAGE 98
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008 A001901 KEYCORP MUTUAL FUND ADVISERS, INC.
008 B001901 A
008 C001901 801-49867
008 D011901 CLEVELAND
008 D021901 OH
008 D031901 44114
008 A001902 SOCIETY ASSET MANAGEMENT, INC.
008 B001902 S
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008 D031902 44114
015 A001901 KEYTRUST COMPANY OF OHIO
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<PAGE> PAGE 99
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<PAGE> PAGE 100
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<PAGE> PAGE 101
070 C021900 N
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<PAGE> PAGE 102
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<PAGE> PAGE 103
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<PAGE> PAGE 104
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<PAGE> PAGE 105
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<PAGE> PAGE 106
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<PAGE> PAGE 107
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<PAGE> PAGE 108
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<PAGE> PAGE 109
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<PAGE> PAGE 110
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<PAGE> PAGE 111
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<PAGE> PAGE 112
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<PAGE> PAGE 113
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<PAGE> PAGE 114
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<PAGE> PAGE 115
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<PAGE> PAGE 116
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<PAGE> PAGE 117
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<PAGE> PAGE 118
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<PAGE> PAGE 120
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<PAGE> PAGE 121
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<PAGE> PAGE 122
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SIGNATURE RICK CLEMENS
TITLE FINANCIAL ADMIN MGR
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<F1>Class A Shares
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<TABLE> <S> <C>
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<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
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<NAME> VICTORY DIVERSIFIED STOCK FUND
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<S> <C>
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<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
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<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
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<NUMBER> 061
<NAME> VICTORY LIMITED TERM INCOME FUND
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 071
<NAME> VICTORY OHIO MUNICIPAL BOND FUND
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<S> <C>
<PERIOD-TYPE> YEAR
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 081
<NAME> VICTORY GOVERNMENT MORTGAGE FUND
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 091
<NAME> VICTORY INTERNATIONAL GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
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<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
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<NUMBER> 092
<NAME> VICTORY INTERNATIONAL GROWTH FUND
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<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-START> NOV-01-1995
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<F1>Class B Shares
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<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
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<NAME> VICTORY GROWTH FUND
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<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
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<NAME> VICTORY BALANCED FUND
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<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
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<NAME> VICTORY BALANCED FUND
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<F1>Class B Shares
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 121
<NAME> VICTORY VALUE FUND
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<S> <C>
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<PERIOD-START> NOV-01-1995
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 131
<NAME> VICTORY STOCK INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 141
<NAME> VICTORY SPECIAL VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
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<ACCUMULATED-GAINS-PRIOR> 5442
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<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 142
<NAME> VICTORY SPECIAL VALUE FUND
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<S> <C>
<PERIOD-TYPE> YEAR
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<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 151
<NAME> VICTORY SPECIAL GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFLIOS
<SERIES>
<NUMBER> 161
<NAME> VICTORY INVESTMENT QUALITY BOND FUND
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 171
<NAME> VICTORY INTERMEDIATE INCOME FUND
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<S> <C>
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
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<NAME> VICTORY FUND FOR INCOME
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 191
<NAME> VICTORY NATIONAL MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
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<NET-INVESTMENT-INCOME> 40393
<REALIZED-GAINS-CURRENT> 2
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 40395
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7124<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1341368<F1>
<NUMBER-OF-SHARES-REDEEMED> 985374<F1>
<SHARES-REINVESTED> 5621<F1>
<NET-CHANGE-IN-ASSETS> 528650
<ACCUMULATED-NII-PRIOR> 76
<ACCUMULATED-GAINS-PRIOR> 20
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1936
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4077
<AVERAGE-NET-ASSETS> 143266<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .050<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .050<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .520<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Select Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000802716
<NAME> THE VICTORY PORTFOLIOS
<SERIES>
<NUMBER> 241
<NAME> VICTORY OHIO MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 558215
<INVESTMENTS-AT-VALUE> 558215
<RECEIVABLES> 4676
<ASSETS-OTHER> 4
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 562895
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1764
<TOTAL-LIABILITIES> 1764
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 561127
<SHARES-COMMON-STOCK> 561127
<SHARES-COMMON-PRIOR> 510395
<ACCUMULATED-NII-CURRENT> 2
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 561131
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20963
<OTHER-INCOME> 0
<EXPENSES-NET> 3801
<NET-INVESTMENT-INCOME> 17162
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 17162
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 17378
<DISTRIBUTIONS-OF-GAINS> 17
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1157311
<NUMBER-OF-SHARES-REDEEMED> 1116601
<SHARES-REINVESTED> 10022
<NET-CHANGE-IN-ASSETS> 50499
<ACCUMULATED-NII-PRIOR> 218
<ACCUMULATED-GAINS-PRIOR> 19
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2836
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5507
<AVERAGE-NET-ASSETS> 567155
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .030
<PER-SHARE-GAIN-APPREC> .000
<PER-SHARE-DIVIDEND> .030
<PER-SHARE-DISTRIBUTIONS> .000
<RETURNS-OF-CAPITAL> .000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> .670
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
To the Shareholders and Board of Trustees of
The Victory Portfolios
In planning and performing our audit of the financial
statements of The Victory Portfolios for the
year ended October 31, 1996, we considered its internal
control structure, including procedures
for safeguarding securities, in order to determine our
auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form
N-SAR, not to provide assurance on the internal control
structure.
The management of The Victory Portfolios is responsible for
establishing and maintaining an
internal control structure. In fulfilling this responsibility,
estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control
structure policies and procedures. Two objectives of an internal
control structure are to provide
management with reasonable, but not absolute, assurance that
assets are safeguarded against loss
from unauthorized use or disposition and transactions are
executed in accordance with
management's authorization and recorded properly to
permit preparation of financial statements
in conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur
and may not be detected. Also, projection of any evaluation
of the structure to future periods is
subject to the risk that it may become inadequate because
of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would
not necessarily disclose all matters in
the internal control structure that might be material
weaknesses under standards established by
the American Institute of Certified Public Accountants.
A material weakness is a condition in
which the design or operation of the specific internal
control structure elements does not reduce
to a relatively low level the risk that errors or irregularities
in amounts that would be material in
relation to the financial statements being audited may
occur and not be detected within a timely
period by employees in the normal course of performing
their assigned functions. However, we
noted no matters involving the internal control structure,
including procedures for safeguarding
securities, that we consider to be material weaknesses as
defined above as of October 31, 1996.
This report is intended solely for the information and use
of management and the Securities and
Exchange Commission.
/s/ COOPERS & LYBRAND, L.L.P.
Columbus, Ohio
December 13, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE
COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
VICTORY PORTFOLIOS
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
VICTORY PORTFOLIOS
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE
REGISTRANT)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE VICTORY PORTFOLIOS
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 1, 1995
A special meeting of the shareholders of the underlying funds (each, a
"Fund" and collectively, the "Funds") of THE VICTORY PORTFOLIOS (the "Company")
will be held at 9:30 a.m. (Eastern time) at 3435 Stelzer Road, Columbus, Ohio,
43219-3035 on December 1, 1995, for the purposes indicated below:
The following items apply to shareholders of EACH FUND:
1. To approve or disapprove a conversion of the Company to a Delaware
business trust.
2. To approve or disapprove a new investment advisory agreement between
each of the Funds and KeyCorp Mutual Fund Advisers, Inc. No fee
increase is proposed.
3. (a) To elect seven trustees to serve as members of the Board of
Trustees of the Company; and
(b) To ratify the selection of Coopers & Lybrand L.L.P. as
independent auditors for the next fiscal year of each of the
Funds.
In addition, for shareholders of all Funds, to transact such other business
as may properly come before the meeting or any adjournment thereof.
The remaining Proposals apply only to the Fund or Funds indicated in italics:
With respect to ALL FUNDS OTHER THAN THE FUND FOR INCOME AND THE SPECIAL
GROWTH
FUND:
4. To approve or disapprove a new Investment Sub-Advisory Agreement
between KeyCorp Mutual Fund Advisers, Inc. and Society Asset Management,
Inc.
With respect to the FUND FOR INCOME:
5. To approve or disapprove a new Investment Sub-Advisory Agreement
between KeyCorp Mutual Fund Advisers, Inc. and First Albany Asset
Management Corporation.
With respect to the SPECIAL GROWTH FUND:
6. To approve or disapprove a new Investment Sub-Advisory Agreement
between KeyCorp Mutual Fund Advisers, Inc. and T. Rowe Price Associates,
Inc.
With respect to the PRIME OBLIGATIONS, TAX-FREE MONEY MARKET AND U.S.
GOVERNMENT
OBLIGATIONS FUNDS:
7. To approve or disapprove a change in the maximum remaining maturity
for each portfolio security which may be purchased by the Fund, from 13
months to 397 days.
In addition, with respect to the BALANCED FUND, DIVERSIFIED STOCK FUND,
GOVERNMENT MORTGAGE FUND, GROWTH FUND, INTERMEDIATE INCOME
FUND, INTERNATIONAL
GROWTH FUND, INVESTMENT QUALITY BOND FUND, LIMITED TERM INCOME
FUND, OHIO
MUNICIPAL BOND FUND, OHIO REGIONAL STOCK FUND, PRIME OBLIGATIONS
FUND, SPECIAL
VALUE FUND, STOCK INDEX FUND, TAX-FREE MONEY MARKET FUND, U.S.
GOVERNMENT
OBLIGATIONS FUND, AND VALUE FUND (the "MODERNIZING FUNDS"), the agenda for
the
special meeting will include the additional items specified below.
With respect to each of the MODERNIZING FUNDS other than the OHIO MUNICIPAL BOND
FUND:
8. To approve or disapprove a restatement of the Fund's investment
objective; and
<PAGE> 3
With respect to the MODERNIZING FUNDS:
9. To consider the following proposals pertaining primarily to the
Funds' fundamental investment restrictions:
a. To approve or disapprove an amendment to each Fund's fundamental
investment restrictions concerning borrowing and senior securities;
b. To approve or disapprove an elimination of each Fund's
fundamental investment restriction concerning investment for the purpose
of exercising control;
c. To approve or disapprove an amendment to each Fund's fundamental
investment restriction concerning the making of loans;
d. To approve or disapprove an amendment of each Fund's fundamental
investment restriction concerning purchases of securities on margin;
e. To approve or disapprove an amendment to each Fund's fundamental
investment restriction concerning underwriting the securities of other
issuers;
f. To approve or disapprove an amendment to certain Funds'
fundamental investment restriction concerning diversification;
g. To approve or disapprove an amendment to certain Funds'
fundamental investment restriction concerning concentration of
investment;
h. To approve or disapprove an amendment to certain Funds'
fundamental investment restrictions concerning commodities and real
estate;
i. To approve or disapprove an amendment of certain Funds'
fundamental investment restriction concerning investments in other
investment companies;
j. To approve or disapprove a reclassification of certain Funds'
fundamental investment restriction regarding securities in which
affiliates have invested;
k. To approve or disapprove a reclassification of certain Funds'
fundamental investment restriction regarding securities of unseasoned
issuers;
l. To approve or disapprove an amendment of certain Funds'
fundamental investment restriction regarding investments in restricted
and illiquid securities;
m. To approve or disapprove a reclassification of certain
fundamental investment restrictions of the Tax-Free Money Market Fund
concerning the use of options;
n. To approve or disapprove of a reclassification of a fundamental
investment restriction of certain Funds concerning the use of options;
o. To approve or disapprove an amendment of the fundamental
investment restriction of the U.S. Government Obligations Fund
concerning permissible investments in government securities; and
p. To approve or disapprove a change in the status of the Ohio
Municipal Bond Fund from a diversified to a nondiversified fund.
<PAGE> 4
Shareholders of record as of the close of business on October 13, 1995 are
entitled to receive notice of, and to vote at, the Meeting and any adjournments
thereof. Your attention is called to the accompanying proxy statement.
By Order of the Board of Trustees
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
October 31, 1995
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS
TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF
YOU ARE UNABLE
TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO
THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE
ENCLOSED
ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 5
THE VICTORY PORTFOLIOS
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Trustees of THE
VICTORY PORTFOLIOS (the "Company") and pertains, to the extent set forth below,
to each of its underlying investment funds (each, a "Fund" and collectively, the
"Funds"). The Company is a registered open-end investment company having its
executive offices at 3435 Stelzer Road, Columbus, Ohio 43219-3035. The proxy is
revocable at any time before it is voted by sending written notice of the
revocation to the Company or by appearing personally at the December 1, 1995
special meeting of shareholders (the "Meeting"). The cost of preparing and
mailing the notice of meeting, the proxy card, this proxy statement and any
additional proxy material has been or is to be borne by the Funds, except that
the costs allocable to Proposals 2, 4, 5 and 6 will be borne by KeyCorp Mutual
Fund Advisers, Inc. ("KeyCorp Advisers"), Society Asset Management, Inc.
("Society") and/or their affiliates. Society is currently the investment adviser
to each of the Funds. First Albany Asset Management Corporation ("First Albany")
serves as sub-adviser for the Fund for Income and T. Rowe Price Associates, Inc.
("T. Rowe Price") serves as sub-adviser for the Special Growth Fund. Proxy
solicitations will be made primarily by mail, but may also be made by telephone,
telegraph, facsimile or personal interview conducted by certain officers or
employees of the Company, Society or Society National Bank or its affiliates,
Concord Holding Corporation ("CHC"), the Funds' administrator, or, if necessary,
a commercial firm retained for this purpose. In the event that the shareholder
signs and returns the proxy ballot, but does not indicate a choice as to any of
the items on the proxy ballot, the proxy attorneys will vote those shares in
favor of such proposal(s), including for the election of each person nominated
to the Board of Trustees of the Company.
Shareholder Communications Corporation and its agents ("SCC") may call
shareholders to ask if they would be willing to authorize SCC to execute a proxy
on their behalf authorizing the voting of their shares in accordance with the
instructions given over the telephone by the shareholders. In addition,
shareholders may call SCC at 1-800-733-8481 Ext. 495 between the hours of 9:00
a.m. and 11:00 p.m. Eastern time in order to initiate the processing of their
votes by telephone. SCC will utilize a telephone vote solicitation procedure
designed to authenticate the shareholder's identity by asking the shareholder to
provide his or her social security number (in the case of an individual) or
taxpayer identification number (in the case of an entity). The shareholder's
telephone instructions will be implemented in a proxy executed by SCC and a
confirmation will be sent to the shareholder to ensure that the vote has been
authorized in accordance with the shareholder's instructions. Although a
shareholder's vote may be solicited and cast in this manner, each shareholder
will receive a copy of this proxy statement and may vote by mail using the
enclosed proxy card. The Company believes that this telephonic voting system
complies with Massachusetts law and has reviewed an opinion of counsel to that
effect.
A copy of each Fund's Annual Report (which contains information pertaining
to the Fund) may be obtained, without charge, by calling the Fund's Transfer
Agent, Primary Funds Service Corporation, P.O. Box 9471, Providence, RI
02940-9471, at (800) 539-3863.
This proxy statement and the enclosed notice of meeting and proxy card are
first being mailed to shareholders on or about November 3, 1995.
<PAGE> 6
On October 13, 1995, the record date for determining shareholders entitled
to receive notice of and vote at the Meeting (the "Record Date"), the Funds had
the number of shares of beneficial interest ("Shares") outstanding set forth
below, each Share being entitled to one vote:
<TABLE>
<CAPTION>
TOTAL SHARES
FUND OUTSTANDING
-------------------------------------------------------------------- ---------------
<S> <C>
Prime Obligations Fund.............................................. 459,692,881.250
Ohio Municipal Money Market Fund.................................... 510,022,004.780
Tax-Free Money Market Fund.......................................... 311,592,949.180
Institutional Money Market Fund (Institutional Class)............... 504,003,681.150
Institutional Money Market (Service Class).......................... 4,146,635.870
Financial Reserves Fund............................................. 777,057,368.300
U.S. Government Obligations Fund.................................... 909,055,922.060
Government Bond Fund (Class A)...................................... 2,855,607.596
Government Bond Fund (Class B)...................................... 80,002.074
Fund For Income..................................................... 2,288,689.462
Limited Term Income Fund............................................ 17,021,161.108
Government Mortgage Fund............................................ 12,605,147.580
Intermediate Income Fund............................................ 16,675,302.918
Investment Quality Bond Fund........................................ 12,679,217.607
National Municipal Bond Fund (Class A).............................. 1,184,169.177
National Municipal Bond Fund (Class B).............................. 45,076.272
New York Tax-Free Fund (Class A).................................... 1,208,662.486
New York Tax-Free Fund (Class B).................................... 144,940.405
Ohio Municipal Bond Fund............................................ 5,331,380.748
Stock Index Fund.................................................... 12,605,525.613
Value Fund.......................................................... 24,874,229.642
Growth Fund......................................................... 8,928,592.748
Special Growth Fund................................................. 4,578,126.394
Balanced Fund....................................................... 18,300,189.332
Diversified Stock Fund.............................................. 29,706,927.998
Ohio Regional Stock Fund............................................ 2,433,977.437
Special Value Fund.................................................. 15,908,871.929
International Growth Fund........................................... 8,653,262.899
</TABLE>
For purposes of determining the presence of a quorum and counting votes on
the matters presented, Shares represented by abstentions and "broker non-votes"
will be counted as present, but not as votes cast, at the Meeting. Under the
Investment Company Act of 1940, as amended (the "1940 Act"), the affirmative
vote necessary to approve a matter under consideration may be determined with
reference to a percentage of votes present at the Meeting, which would have the
effect of treating abstentions and non-votes as if they were votes against a
proposal, if such proposal requires an approval under the 1940 Act.
INTRODUCTION
The Meeting is being called for the following purposes (the "Proposals").
With respect to each of the Funds: (1) to approve or disapprove a
conversion of the Company to a Delaware business trust; (2) to approve or
disapprove a new investment advisory agreement between each of the Funds and
KeyCorp Advisers; (3)(a) to elect seven persons to serve as members of the Board
of Trustees of the Company; and (b) to ratify the selection of Coopers & Lybrand
L.L.P. as independent auditors for the next fiscal year of each of the Funds;
and to transact such other business as may properly come before the Meeting or
any adjournment thereof.
2
<PAGE> 7
Each one of the following Proposals applies only to certain Funds (the
Funds to which each of these Proposals apply are specified below and in the
charts set forth on the next two pages): (4) to approve or disapprove a new
Investment Sub-Advisory Agreement between KeyCorp Advisers and Society (all
Funds other than Fund for Income and Special Growth Fund); (5) to approve or
disapprove a new Investment Sub-Advisory Agreement between KeyCorp Advisers and
First Albany (Fund for Income only); (6) to approve or disapprove a new
Investment Sub-Advisory Agreement between KeyCorp Advisers and T. Rowe Price
(Special Growth Fund only); (7) to approve or disapprove of a change in the
maximum remaining maturity of portfolio instruments (Prime Obligations, Tax-Free
and U.S. Government Obligations Money Market Funds only); (8) to approve or
disapprove a restatement of the Funds' investment objectives (Balanced Fund,
Diversified Stock Fund, Government Mortgage Fund, Growth Fund, Intermediate
Income Fund, International Growth Fund, Investment Quality Bond Fund, Limited
Term Income Fund, Ohio Regional Stock Fund, Prime Obligations Fund, Special
Value Fund, Stock Index Fund, U.S. Government Obligations Fund, Tax-Free Money
Market Fund and Value Fund only); and (9) to consider proposals pertaining to
the amendment, reclassification or elimination of various fundamental investment
restrictions of the Funds (each of the Funds listed under Proposal number (8)
above, with the addition of Ohio Municipal Bond Fund (collectively, the
"Modernizing Funds")).
3
<PAGE> 8
PROPOSAL NUMBER
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
NAME OF FUND 1 2 3A 3B 4 5 6 7 8 9(1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balanced x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Diversified Stock x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Government Mortgage x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Growth x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Intermediate Income x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
International Growth x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Investment Quality Bond x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Limited Term Income x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Ohio Municipal Bond x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Ohio Regional Stock x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Prime Obligations x x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Special Value x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Stock Index x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Tax-Free Money Market x x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
U.S. Government Obligations x x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Value x x x x x x x
- ----------------------------------------------------------------------------------------------------------------
Financial Reserves x x x x x
- ----------------------------------------------------------------------------------------------------------------
Fund for Income x x x x x
- ----------------------------------------------------------------------------------------------------------------
Government Bond x x x x x
- ----------------------------------------------------------------------------------------------------------------
Institutional Money Market x x x x x
- ----------------------------------------------------------------------------------------------------------------
National Municipal Bond x x x x x
- ----------------------------------------------------------------------------------------------------------------
New York Tax-Free x x x x x
- ----------------------------------------------------------------------------------------------------------------
Ohio Municipal Money Market x x x x x
- ----------------------------------------------------------------------------------------------------------------
Special Growth x x x x x
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) See sub-chart on the next page regarding Proposal 9.
4
<PAGE> 9
SUBCHART FOR PROPOSALS 9A-P
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
NAME OF FUND A B C D E F G H I J K L M N O
P
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
Balanced x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Diversified Stock x x x x x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Government Mortgage x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Growth x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Intermediate Income x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
International Growth x x x x x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Investment Quality Bond x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Limited Term Income x x x x x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Ohio Municipal Bond x x x x x x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Ohio Regional Stock x x x x x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Prime Obligations x x x x x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Special Value x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Stock Index x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Tax-Free Money Market x x x x x x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
U.S. Government Obligations x x x x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
Value x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Approval of each one of the Proposals other than the election of Trustees
(Proposal 3(a)) and the ratification of auditors (Proposal 3(b)) requires the
vote of a "majority of the outstanding voting securities," within the meaning of
the 1940 Act, of each Fund to which the Proposal is applicable. The term
"majority of the outstanding voting securities" is defined under the 1940 Act to
mean: (a) 67% or more of the outstanding Shares present at the Meeting, if the
holders of more than 50% of the outstanding Shares are present or represented by
proxy, or (b) more than 50% of the outstanding Shares of the Fund, whichever is
less. The election of each nominee for election as a Trustee (Proposal 3(a))
requires the affirmative vote of a plurality of all Shares voted at the Meeting,
and the ratification of auditors (Proposal 3(b)) requires the vote of a majority
of the Shares of each Fund present at the Meeting.
An election of Trustees under Proposal 3(a) and an approval of auditors
under Proposal 3(b) would be effective immediately. If Proposals 2, 4, 5 and 6
are approved, it is anticipated that they will become effective by January 1,
1996. If the other Proposals are approved, it is anticipated that they will
become effective as soon as practical thereafter, and in any event by March 1,
1996.
A Table of Contents for this proxy statement is set forth at the back of
this document, following the exhibits hereto.
5
<PAGE> 10
MATTERS TO BE ACTED ON
PROPOSAL 1
APPROVAL OR DISAPPROVAL OF A PROPOSED PLAN
TO CONVERT THE VICTORY PORTFOLIOS FROM A
MASSACHUSETTS BUSINESS TRUST TO A DELAWARE BUSINESS TRUST
INTRODUCTION
If the shareholders of all Funds approve this Proposal, the Company will be
converted from a Massachusetts business trust into a Delaware business trust.
The proposed conversion into a Delaware business trust (the "Conversion") would
take place pursuant to an Agreement and Plan of Conversion and Termination (the
"Conversion Plan") in the form attached as Exhibit A to this Proxy Statement.
Adoption of this Proposal for each Fund requires a vote of the "majority of the
outstanding voting securities" of each Fund, within the meaning of the 1940 Act.
On September 20, 1995, the Board of Trustees of the Company (the "Board")
unanimously approved a proposal made by Society to change the jurisdiction in
which the Company is organized. Since the Company is currently organized as a
Massachusetts business trust, certain of its affairs are governed by a
Declaration of Trust adopted under and subject to the laws of Massachusetts
(hereinafter sometimes referred to as the "Current Company"). The Conversion to
a Delaware business trust (hereinafter sometimes referred to as the "Successor
Company" in order to distinguish it from the Current Company) is being
recommended for the purpose of restating and clarifying the Company's
organizational document -- its trust instrument -- under Delaware law, which the
Board believes would result in certain advantages. These advantages would
include (i) having more flexibility and efficiency in the administration of the
Company, (ii) being subject to a clearer and more developed body of law (the law
of Delaware), (iii) eliminating the potential that may presently exist, under
certain circumstances, for shareholder liability for the obligations of the
Company, and (iv) having the potential to avoid certain expenses or obtain
certain cost savings for the Company and its shareholders. See "Evaluation by
the Current Company's Trustees" below.
DESCRIPTION OF THE CURRENT COMPANY
The Company's Declaration of Trust, pursuant to which the Company was
originally organized under the name The North Third Street Fund, was filed with
the Secretary of State of the Commonwealth of Massachusetts on February 6, 1986.
Pursuant to various amendments and restatements filed thereafter, the name of
the Company was changed to The Emblem Fund, then to The Society Funds, and then
ultimately (in connection with the merger of KeyCorp and Society Corporation in
1994) to The Victory Portfolios. The Declaration of Trust of the Current
Company, as restated and amended to date (the "Declaration of Trust"),
authorizes the Trustees to issue an unlimited number of Shares. The Company
presently has 28 series or Funds (the "Current Funds"), 4 of which are inactive
and therefore not covered by this proxy statement. The Declaration of Trust
authorizes the Trustees to issue Shares in additional series by setting or
changing their respective preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption.
Summary of Certain Disadvantages of the Current Company's Declaration of Trust
under Massachusetts Law
In the administration of the Current Company's affairs under its
Declaration of Trust, issues have arisen for which there has been a lack of
guidance under relevant provisions of Massachusetts law.
Furthermore, holders of units of interest in a Massachusetts business trust
may, under certain circumstances, be held personally liable as partners for the
obligations of the trust. Although provisions of the Declaration of Trust and
other legal documents pertaining to the Company's affairs seek to minimize the
potential for such liability, some degree of exposure, however unlikely,
continues to exist with respect to the Current Company as long as it is governed
by Massachusetts law. Substantially all written agreements, obligations,
instruments, or undertakings made by the Company must contain a provision
limiting the
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obligations created by that transaction to the Fund or Funds to which the
transaction relates, as well as related provisions to the effect that the
shareholders of the Fund or Funds and trustees of the Current Company are not
personally liable thereunder. Although the Declaration of Trust provides for
indemnification out of the Funds' property of any shareholder held personally
liable for the obligations of a Fund solely by reason of his or her being or
having been a shareholder, a shareholder could conceivably incur financial loss
exceeding any amounts indemnified on account of shareholder liability if the
circumstances were such that the Fund had insufficient assets or would otherwise
be unable to meet its obligations.
DESCRIPTION OF THE SUCCESSOR COMPANY
Advantages of a Delaware Business Trust
The Successor Company would be established pursuant to a trust instrument
under the laws of Delaware substantially in the form attached as Exhibit B (the
"Delaware Trust Instrument"). As a Delaware business trust, the Successor
Company's operations will be governed by the Delaware Trust Instrument, the
Successor Company's Bylaws and applicable Delaware law rather than by the
Current Company's Declaration of Trust, Code of Regulations and applicable
Massachusetts law. Except as described in this Proposal, the Conversion will not
affect the operations of the Funds, which will continue to have the same
investment objectives, policies and restrictions (subject to separate Proposals
pertaining thereto set forth in this Proxy Statement, which are unrelated to the
Conversion) and be subject to the provisions of the 1940 Act, the rules and
regulations of the Securities and Exchange Commission ("SEC") thereunder, and
those of applicable state securities laws.
The Delaware Business Trust Act (the "Delaware Act") provides that a
shareholder of a Delaware business trust shall be entitled to the same
limitation of personal liability extended to stockholders of Delaware
corporations. It is believed that no similar statutory or other authority
limiting business trust shareholder liability exists in Massachusetts or in most
other states. (To guard against the risk that a court of another state would
apply that state's law on this point, the Trust Instrument still provides that
every written obligation of the Company contain a statement that such obligation
may only be enforced against the assets of the Company and provides for
indemnification out of Successor Company property of any shareholder held
personally liable for the obligations of the Successor Company). In light of
Delaware law, the nature of the Successor Company's business, and the nature of
its assets, management believes that the risk of personal liability to a
Successor Company shareholder would be extremely remote.
Delaware has obtained a favorable national reputation for its business laws
and business environment. The Delaware courts, which may be called upon to
interpret the Delaware Act, are among the nation's most highly respected and
have an expertise in corporate matters which in part grew out of the fact that
Delaware corporate legal issues are concentrated in the Court of Chancery where
there are no juries and where judges issue written opinions explaining their
decisions. Thus, there is a well established body of precedent which may be
relevant in deciding issues pertaining to a Delaware business trust.
There are other advantages that may be afforded by a Delaware business
trust. For example, Delaware law authorizes electronic or telephonic
communications between shareholders and the Successor Company, and taking
advantage of this provision could improve shareholder voting procedures and
reduce costs. Under Delaware law, the Successor Company will have the
flexibility to respond to future business contingencies. For example, the
Trustees will have the power to incorporate the Company, to merge or consolidate
it with another entity, to cause each series to become a separate trust, and to
change the Company's domicile without a shareholder vote. This flexibility could
help to assure that the Successor Company operates under the most advanced form
of organization and could reduce the expense and frequency of future shareholder
meetings for non-investment related issues.
Description of the Delaware Trust Instrument
The provisions of the Delaware Trust Instrument are similar to those of the
Declaration of Trust, but various ambiguities and deficiencies have been
addressed and clarified in the Delaware Trust Instrument. In addition, the
Delaware Trust Instrument provides more details and additional flexibility as to
certain matters
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<PAGE> 12
that were not addressed by the Declaration of Trust. For example, shareholder
quorum and voting requirements, including provisions pertaining to record dates
for meetings and adjournments, have been clarified and liberalized in order to
provide increased flexibility. Ambiguities formerly existing as to voting
requirements have been removed. Shareholders will be deemed to have
preauthorized certain changes which the Board could adopt for the structural
form for each Fund (which would allow the Board to convert a Fund into
"master/feeder" format). The table set forth as Schedule 1 to this proxy
statement highlights certain similarities and differences between the provisions
of the current Declaration of Trust and the proposed Delaware Trust Instrument.
Although this summary is intended to highlight important differences, it is
based upon a summary of the Delaware Trust Instrument's provisions and is
therefore qualified by the provisions of the complete Delaware Trust Instrument.
SIMILARITIES BETWEEN THE CURRENT COMPANY AND SUCCESSOR COMPANY
Although the Conversion would result in certain changes which are described
above, most aspects of administering the Successor Company as a Delaware
business trust will remain unchanged.
Management by the Board of Trustees. The Company will continue to be
managed by or under the direction of its Trustees, who serve indefinite terms
and who shall have substantially the same responsibilities, powers, and
fiduciary duties as the Trustees of the Current Company. The Trustees of the
Successor Company are expected to be the current Trustees of the Company and
persons who are elected to serve as Trustees of the Company pursuant to Proposal
3(a). The Trustees of the Successor Company may elect the officers of the
Successor Company, some of whom may be officers of the Current Company.
Issuance of Shares in Separate Series. The Delaware Trust Instrument will
establish separate series of shares (each, a "Successor Fund") to correspond to
each of the Current Funds. As is presently the case, the Trustees of the
Successor Company may establish additional series, designate the relative rights
and preferences of each series, and may divide the shares of any series into
classes. Shares of each series shall represent equal proportionate interests in
the assets of that series only and have identical voting, dividend, liquidation,
and other rights. The liabilities of each series shall be borne solely by that
series, and no series will be responsible for the liabilities of another series.
Each series may issue an unlimited number of shares, and all shares issued will
be fully paid and non-assessable. Shares will have no subscription or preemptive
rights or other right to subscribe to any additional shares and only such
conversion or exchange rights as the Trustees may grant in their discretion.
Shareholder Meetings and Voting. Shares of the Company are entitled to one
vote per share (with proportional voting for fractional shares) on such matters
as shareholders are entitled to vote. Shareholders vote as a single class on all
matters except (i) when required by the 1940 Act, shares shall be voted by
individual series, and (ii) when the Board of Trustees has determined that the
matter affects only the interests of one or more series, then only shareholders
of such series shall be entitled to vote thereon. There will normally be no
meetings of shareholders for the purposes of electing Trustees unless and until
such time as less than a majority of the Trustees have been elected by the
shareholders, at which time the Trustees then in office will call a
shareholders' meeting for the election of Trustees. The shareholder voting
provisions of the Delaware Trust Instrument are summarized under "Shareholder
Voting" in Schedule 1.
The Successor Company, like the Current Company, will operate as an
open-end management investment company registered with the SEC and governed by
the 1940 Act. Shareholders of each Successor Fund will, therefore, have the
power to vote at special meetings with respect to matters pertaining to the
Company generally and to their Successor Fund in particular, such as any
proposed changes in fundamental investment policies of that respective Successor
Fund.
Liability of Trustees. The Delaware Trust Instrument provides that the
Trustees shall not be liable for any act or omission as Trustee, but nothing
protects a Trustee against liability to the Successor Company or to its
shareholders to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his or her office. Furthermore, a Trustee is entitled
to indemnification against liability and to all reasonable expenses, under
certain conditions, to be paid from the assets of the Successor Company;
provided that no indemnification shall be provided to
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any Trustee who has been adjudicated by a court to be liable to the Successor
Company or the shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office or not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Successor Company. The Successor Company
may advance money for expenses, provided that the Trustee undertakes to repay
the Successor Company if his or her conduct is later determined to preclude
indemnification, and one of the following conditions are met: (i) the Trustee
provides security for the undertaking; (ii) the Successor Company is insured
against losses stemming from any such advance; or (iii) there is a determination
by a majority of the Successor Company's independent non-party Trustees, or by
independent legal counsel, that there is reason to believe that the Trustee
ultimately will be entitled to indemnification.
SUMMARY OF THE CONVERSION PLAN
The following summary of the principal terms of the Conversion Plan is
qualified in its entirety by reference to the Conversion Plan itself, which is
attached as Exhibit A to this Proxy Statement.
Prior to the Conversion, a Delaware certificate of trust will be filed and
the Successor Company established as a Delaware entity. Each Successor Fund will
have only nominal assets and no liabilities.
On the closing date of the Conversion ("Closing Date"), the Current Company
will transfer all of the assets of each of its Current Funds to a corresponding
Successor Fund of the Successor Company in exchange for the assumption by each
Successor Fund of all of the corresponding Current Fund's liabilities and the
issuance of that number of shares of the Successor Fund (the "Successor Fund
Shares") equal to the number of outstanding shares of the corresponding Current
Fund (the "Current Fund Shares"). Immediately thereafter, each Current Fund will
distribute the same number of Successor Fund Shares to each Current Fund
shareholder as are then owned by the shareholder. Following the making of such a
liquidating distribution by each Current Fund, the Current Company will be
terminated and, as soon as practicable thereafter, will be wound up and
dissolved. Such transfer of assets in exchange for shares will be effected on a
class by class basis for each Current Fund which, as of the Closing Date, has
outstanding more than one class of shares, so that shareholders will receive
Successor Fund Shares of the same class as the class of shares of the Current
Fund held on the Closing Date.
UPON COMPLETION OF THE CONVERSION, EACH SHAREHOLDER WILL BE THE
OWNER OF
FULL AND FRACTIONAL SUCCESSOR FUND SHARES EQUAL IN NUMBER AND
AGGREGATE NET
ASSET VALUE TO HIS OR HER CURRENT FUND SHARES. Of course, the value of a
shareholder's investment will fluctuate thereafter, based on the investment
performance of the Successor Fund.
As described above, if the Conversion is approved, the Successor Fund
Shares will be held of record by the Current Funds on the Closing Date pending
distribution to shareholders. Approval by shareholders of this Proposal 1 will
be deemed to authorize the Current Funds (as shareholders on the Closing Date)
to vote on each of the Proposals set forth in this Proxy Statement in the same
proportion as the shareholders voted, so that the approval of the respective
Proposals may be made effective with respect to the Successor Funds and the
Successor Company as well as the Current Funds and the Current Company. In
addition, an approval of this Proposal 1 by shareholders of any Current Fund
will be deemed to authorize that Current Fund (as shareholder on the Closing
Date) to render approval on such matters as may be necessary, for regulatory
purposes, in order to adopt or enter into any agreements or plans on behalf of
the Successor Fund which had previously been approved by shareholders of the
Current Fund and are then in effect with respect to the Current Fund.
If the Conversion Plan is approved, the Closing Date of the Conversion is
expected to occur on or about February 29, 1996, unless the Trustees of the
Successor Company determine that it would not be in the best interests of the
Shareholders to do so at that time or at all. The obligations of the Current
Company and the Successor Company under the Conversion Plan are subject to
various conditions as stated therein. The Conversion Plan may be terminated or
amended at any time prior to the Conversion, but no such amendment may have a
material adverse effect on the interests of Current Company shareholders. The
Conversion Plan will only apply to those Current Funds whose shareholders render
the requisite vote to approve the Conversion
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Plan; therefore, the Current Company may (but would not be obligated to)
transfer the assets of only some of the Current Funds.
TEMPORARY WAIVER OF CERTAIN INVESTMENT POLICIES
Certain investment policies of the Company, including those which prohibit
it from acquiring more than a stated percentage of ownership of another company
and from investing more than a stated percentage of its assets in a particular
industry, could be deemed to prohibit the Company from carrying out the
Conversion. By approving this Proposal, shareholders will be agreeing that for
the purposes of effecting the Conversion, any investment policies or
restrictions that would otherwise prohibit the Conversion will be waived on a
temporary basis so as not to impede the Conversion.
FEDERAL INCOME TAX CONSEQUENCES OF THE CONVERSION
In connection with the Conversion, the Company intends to obtain an opinion
of counsel stating that, with respect to each Current Fund, for federal income
tax purposes: (i) the transfer of all of the assets of the Current Fund (except
for a cash reserve in an amount necessary for the discharge of all known and
reasonably anticipated liabilities of the Current Fund, if any) to the Successor
Fund in exchange for the assumption of all of the liabilities of the Current
Fund by the Successor Fund and the delivery to the Current Fund of shares of the
Successor Fund, and the distribution by the Current Fund pro rata to its
shareholders of such shares of the Successor Company and the termination of the
Current Fund, as described in the Conversion Plan will constitute a
reorganization within the meaning of section 368(a)(1)(C), 368(a)(1)(D), or
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"); (ii) the Current Fund will not recognize any gain or loss as a
result of the Conversion; (iii) the Successor Fund will not recognize any gain
or loss as a result of the Conversion; (iv) shareholders of the Current Fund
will not recognize any gain or loss on the exchange of their Current Fund Shares
for Successor Fund Shares in the Conversion; (v) the basis of the Successor Fund
Shares received by a shareholder will equal the basis of the shareholder's
Current Fund Shares immediately prior to the Conversion; (vi) the holding period
of Successor Fund Shares received in the Conversion by a shareholder will
include the holding period during which he held the Current Fund Shares
exchanged therefor as a capital asset as of the time of the Conversion; and
(vii) the basis and holding period of the Successor Fund in the assets of the
Current Fund received in the Conversion will equal the basis and will include
the holding period, respectively, of such assets in the hands of the Current
Fund immediately prior to the Conversion.
The Current Funds and the Current Company have not sought a tax ruling from
the Internal Revenue Service ("IRS") with respect to the tax aspects of the
Conversion, but will act in reliance upon the opinion of counsel discussed in
the preceding paragraph. Such opinion is not binding on the IRS and does not
preclude the IRS from adopting a contrary position. If for any reason the
Conversion did not qualify as a tax-free reorganization for federal income tax
purposes, then (i) the transfer of each Current Fund's assets to its
corresponding Successor Fund would be treated as a taxable sale or exchange of
those assets at fair market value, and (ii) the exchange -- by the shareholders
of each Current Fund -- of their Current Fund Shares for Successor Fund Shares
would be treated as a taxable exchange of the Current Fund Shares, also at fair
market value. Shareholders should consult their own advisers concerning that and
other potential tax consequences of the Conversion to them, including any
applicable state and local income tax consequences.
EVALUATION BY THE CURRENT COMPANY'S TRUSTEES
Based on a recommendation by Society, the Board reviewed the potential
benefits associated with the proposed Conversion and adoption of the proposed
Delaware Trust Instrument. In this regard, the Trustees considered the
following:
(1) the disadvantages described above which apply to operating the
Company as a Massachusetts business trust;
(2) the advantages described above which apply to operating the
Successor Company as a Delaware business trust;
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(3) the advantages to be gained by restating the Company's entire
trust instrument and adopting the new Trust Instrument under Delaware law;
(4) that the Conversion itself will not affect the investment advisory
arrangements applicable to the Company, the investment objectives, policies
or restrictions of any Fund, or otherwise affect in any significant manner
the general characteristics of any Fund or a shareholder's investment
therein;
(5) the expected federal tax consequences to the Current Funds, the
Successor Funds and shareholders resulting from the proposed Conversion,
and the likelihood that no recognition of income, gain or loss for federal
income tax purposes to the Current Funds, the Successor Funds or
shareholders will occur as a result thereof; and
(6) that the interests of the shareholders of the Current Funds will
not be diluted as a result of the proposed Conversion.
In considering these factors and reaching the decision to recommend that
the shareholders vote to approve this Proposal, the Board concluded that
adopting the Conversion Plan and the Delaware Trust Instrument is in the best
interests of the shareholders. Appraisal rights are not available to Current
Company shareholders. However, shareholders retain the right to redeem their
Shares at net asset value at any time.
The adoption of this Proposal, as to each Fund, requires the vote of a
"majority of the outstanding voting securities of the Fund," within the meaning
of the 1940 Act.
IN VIEW OF THE FOREGOING, THE BOARD OF TRUSTEES RECOMMENDS THAT
THE
SHAREHOLDERS VOTE FOR THE ADOPTION OF THE CONVERSION PLAN AND THE
DELAWARE TRUST
INSTRUMENT.
PROPOSAL 2
APPROVAL OR DISAPPROVAL OF A NEW INVESTMENT ADVISORY
AGREEMENT BETWEEN THE COMPANY AND KEYCORP ADVISERS
INTRODUCTION
Society, the current investment adviser of the Funds, recommended to the
Board that the Company enter into a new Investment Advisory Agreement, on behalf
of each Fund, with KeyCorp Advisers, an affiliate of Society (the "Proposed
Advisory Agreement"). The Board has approved, and recommends that the
shareholders of each Fund approve, the Proposed Advisory Agreement.
If Proposal 4 is approved, Society will continue to manage the day-to-day
affairs of each Fund (other than the Fund for Income and Special Growth Fund),
but in the capacity of sub-adviser rather than adviser. While the Proposed
Advisory Agreement is described below, the discussion is qualified by the
provisions of the complete agreement, a copy of which is attached as Exhibit C.
Certain provisions set forth in Exhibit C reflect the assumption that
shareholders of the Funds will approve Proposal 1 and the Company will be
converted into a Delaware business trust. However, since approval of this
Proposal 2 is not dependent upon an approval of Proposal 1 or a Conversion of
the Company to a Delaware business trust, and since the terms of this Proposal
(if approved) may be implemented prior to the Conversion, the Current Company
may enter into the Proposed Advisory Agreement (in which case the Proposed
Advisory Agreement will be between the Funds and the Current Company and its
provisions will reflect certain information about the Current Company rather
than the Successor Company). If the shareholders of a Fund do not approve this
Proposal, then Society will continue to act as the investment adviser to such
Fund. The Proposed Advisory Agreement should be read in conjunction with the
following.
During the last 24 months, the Company has undergone certain changes
related to the merger of KeyCorp and Society Corporation, the addition of Funds
which succeeded to the operations of The Victory Funds, and an increase in total
assets from approximately $1.1 billion to approximately $5.8 billion. In
addition, Society and its direct and indirect parents, KeyCorp Asset Management
Holdings, Inc. and Society National Bank, respectively, have undertaken to
restructure their corporate-wide investment management
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operations in order to more fully take advantage of portfolio management skills
that exist within the various corporate entities controlled by KeyCorp. As part
of this internal restructuring, KeyCorp would like to consolidate its mutual
fund supervisory functions within one entity, KeyCorp Advisers, yet retain the
ability to utilize portfolio managers employed by the various investment
management entities affiliated with KeyCorp Advisers through common ownership by
KeyCorp. KeyCorp Advisers does not yet serve as an investment adviser to any
mutual funds.
Thus, the Proposed Advisory Agreement would provide KeyCorp Advisers with
the ability to utilize the specialized portfolio skills of employees of all its
various affiliates, including Society, thereby providing the Funds with greater
opportunities and flexibility in accessing investment expertise. For the
foreseeable future, KeyCorp Advisers would employ certain members of Society's
senior management, and each Fund's portfolio manager is expected to be the same,
assuming approval of the subadvisory agreements between KeyCorp Advisers and
Society, T. Rowe Price and First Albany.
SIMILARITIES BETWEEN THE CURRENT AND PROPOSED ADVISORY AGREEMENTS
The current Investment Advisory Agreement (the "Current Advisory
Agreement") is similar in many respects to the Proposed Advisory Agreement. The
Proposed Advisory Agreement contains the material terms of the Current Advisory
Agreement, but reflects the proposed change of the investment adviser from
Society to KeyCorp Advisers, and incorporates additional provisions designed to
clarify and supplement the rights and obligations of the parties.
MOST IMPORTANTLY, THE RATE AT WHICH FEES ARE REQUIRED TO BE PAID
BY EACH
FUND FOR INVESTMENT ADVISORY SERVICES, AS A PERCENTAGE OF AVERAGE
DAILY NET
ASSETS, WILL REMAIN THE SAME. Under the provisions of both the Current and the
Proposed Advisory Agreements, each Fund is required to pay the investment
adviser a monthly fee equal to a stated percentage per annum of its average
daily net assets. These amounts are set forth below under "Fees and Fee
Waivers." The total advisory fees payable by a Fund which pays an advisory fee
at an annual rate of .75% or higher are higher than the advisory fees paid by
most mutual funds, although the Board believes that the Funds which pay advisory
fees at such rates have advisory fees which are comparable to those paid by many
mutual funds having similar objectives and policies.
The following summarizes certain additional aspects of the Current and
Proposed Advisory Agreements (collectively referred to below in this Section as
the "Agreement") which are materially the same:
In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the obligations or duties of the adviser, the investment
adviser shall not be liable to the Funds or to any shareholder for any losses
that may be sustained by the Funds in connection with its performance of the
Agreement.
The investment adviser bears all expenses in connection with the
performance of its services under the Agreement. The Funds bear the expenses
incurred in their operations.
Under the Agreement, the investment adviser must reimburse a Fund if the
aggregate expenses of the Fund in any fiscal year exceed the expense limitations
imposed by applicable state securities regulations. If applicable, the
reimbursement will be equal to the excess amount times the ratio of the fees
otherwise payable by the Fund to the adviser under the Agreement and to the
Fund's administrator under the Administration Agreement. However, the
reimbursement obligation is limited in any fiscal year to the amount of the fee
paid to the investment adviser by the Fund in that fiscal year unless otherwise
required by applicable state securities regulations. No such reimbursement was
required during the Funds' most recent fiscal years.
A Fund may terminate the Agreement as to that Fund without penalty on not
more than 60 days' written notice when authorized by either a vote of
shareholders holding a "majority of the outstanding voting securities" (within
the meaning of the 1940 Act) of the Fund or by a vote of a majority of the
Company's Board of Trustees. The investment adviser may terminate the Agreement
on 60 days' written notice to the Company. The Agreement terminates in the event
of its assignment (as defined in the 1940 Act).
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DIFFERENCES BETWEEN THE CURRENT AND PROPOSED ADVISORY AGREEMENTS
The following highlights summarize some of the additional provisions which
are included in the Proposed Advisory Agreement:
KeyCorp Advisers. KeyCorp Advisers will be the investment adviser to the
Funds rather than Society, and will continuously supervise the investment and
reinvestment of cash, securities and other property comprising the assets of the
Funds.
Details Regarding KeyCorp Advisers' Duties. The Proposed Advisory
Agreement clearly specifies the duties of Keycorp Advisers. For example, that
KeyCorp Advisers will be required to obtain and evaluate pertinent data and
other significant events and developments which affect the economy, the Funds'
investment programs, the issuers of securities and the industries in which they
engage, and furnish a continuous investment program for each Fund. KeyCorp
Advisers will be obligated to furnish such reports, evaluations, information or
analyses to the Company as the Board may request, make recommendations to the
Board with respect to Company policies, and carry out such policies as are
adopted by the Board.
Use of Affiliated Entities. The Proposed Advisory Agreement clarifies that
KeyCorp Advisers may render services through its own employees or the employees
of one or more affiliated companies that are qualified to act as an investment
adviser to the Company under applicable laws and are under the common control of
KeyCorp as long as all such persons are functioning as part of an organized
group of persons, and such organized group of persons is managed at all times by
authorized officers of KeyCorp Advisers. KeyCorp Advisers will be as fully
responsible to the Company for the acts and omissions of such persons as it is
for its own acts and omissions.
Use of a Sub-Adviser. The Proposed Advisory Agreement clarifies that
KeyCorp Advisers may from time to time employ or associate with such other
entities or persons (a "Sub-Adviser") as it believes appropriate to assist in
the performance of the Proposed Advisory Agreement with respect to a particular
Fund. However, the Funds will not pay any additional compensation for any
Sub-Adviser, and KeyCorp Advisers will be as fully responsible to the Company
for the acts and omissions of the Sub-Adviser as it is for its own acts and
omissions, and KeyCorp Advisers must review, monitor and report to the Board
regarding the performance and investment procedures of any Sub-Adviser.
Brokerage Transactions. The Proposed Advisory Agreement sets forth
specific terms as to brokerage transactions and KeyCorp Advisers' use of
broker-dealers. For example, KeyCorp Advisers will be obligated to use its best
efforts to seek to execute portfolio transactions at prices which, under the
circumstances, result in total costs or proceeds being the most favorable to the
Funds. In assessing the best overall terms available for any transaction,
KeyCorp Advisers will consider all factors it deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, research services
provided and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis.
"Soft Dollars." A provision of the Proposed Advisory Agreement explicitly
allows KeyCorp Advisers to select brokers or dealers who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to KeyCorp Advisers, the Funds and/or the other
accounts over which KeyCorp Advisers exercises investment discretion, and
provides that KeyCorp Advisers may pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for a Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if KeyCorp
Advisers determines in good faith that the total commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
overall responsibilities of KeyCorp Advisers with respect to accounts over which
it exercises investment discretion.
Aggregation of Orders. There is also a clarification of the authority of
KeyCorp Advisers to aggregate the securities to be sold or purchased with those
of other Funds or its other clients if, in KeyCorp Advisers' reasonable
judgment, such aggregation will result in an overall benefit to a Fund, taking
into consideration the advantageous selling or purchase price, brokerage
commission and other expenses, and trading requirements.
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Expenses. The Proposed Advisory Agreement sets forth details as to the
types of expenses which the Funds must pay for in connection with their
operations. Such expenses are deemed to include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Company's Trustees that are not employees of KeyCorp
Advisers; (iv) legal and audit expenses; (v) administrator, custodian, pricing
and bookkeeping, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of Shares for
distribution under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders, unless
otherwise required; (viii) all other expenses incidental to holding meetings of
shareholders, including proxy solicitations therefor, unless otherwise required;
(ix) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (x) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; (xi) insurance premiums for fidelity
bonds and other coverage to the extent approved by the Board; (xii) association
membership dues authorized by the Board; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Company may be a party (or to which the Funds'
assets may be subject) and the legal obligation which the Company may have to
provide indemnification to the Company's Trustees and officers.
Representations and Warranties. The Proposed Advisory Agreement adds
certain representations and warranties made by KeyCorp Advisers and the Company.
These include representations concerning due incorporation and registration
under applicable law, authority to enter into the Proposed Advisory Agreement,
and a representation that KeyCorp Advisers will use its best judgment and effort
in carrying out its obligations. Society agreed in the Current Advisory
Agreement that it would conform to applicable laws and regulations. The
representations of the Company are new.
Other Clarifications. The Proposed Advisory Agreement contains certain
additional provisions which are intended to clarify the status, rights or
obligations of the parties. For example, the investment adviser is deemed to be
an independent contractor and the provisions of the Proposed Advisory Agreement
are deemed to apply to the Funds severally and not jointly.
BOARD CONSIDERATIONS
In considering whether to recommend that the Proposed Advisory Agreement be
approved by shareholders, the Board considered the nature and quality of
services to be provided by KeyCorp Advisers and comparative data as to advisory
fees and expenses, and the Board requested and evaluated such other information
from KeyCorp Asset Management Holdings, Inc., KeyCorp Advisers and Society which
the Board deemed to be relevant, including, but not limited to, KeyCorp
Advisers' ability to select and utilize portfolio managers from its affiliates,
including Society; that the Funds would continue to be managed by their current
portfolio managers for the foreseeable future, thereby ensuring continuity in
management; that the rate at which advisory fees will initially be paid to
KeyCorp Advisers would be identical to the rate at which fees are now paid to
Society; and that the Proposed Advisory Agreement would include certain
provisions designed to modernize the terms of the agreement and reflect
regulatory developments, such as those concerning "soft dollars" under
regulations and releases recently issued by the SEC.
The Board, including a majority of the Trustees who are not interested
persons of the Funds, Society or KeyCorp Advisers ("Disinterested Trustees"),
unanimously approved the Proposed Advisory Agreement at a meeting held on
September 20, 1995.
ADDITIONAL INFORMATION REGARDING APPROVALS
In connection with the reorganization of the underlying investment
portfolios of The Victory Funds into the Company, the Current Advisory Agreement
was approved by shareholders of the Funds which were so reorganized into the
Company on April 28, 1995 (and was executed, as to those Funds, as of June 5,
1995). The Current Advisory Agreement was last approved by shareholders of other
Funds on February 22, 1994 (and was executed, as to those Funds, as of March 1,
1994). If approved by shareholders, the Proposed
14
<PAGE> 19
Advisory Agreement will remain in effect for two years (unless sooner
terminated), and will thereafter continue for successive one-year periods,
provided that such continuation is specifically approved at least annually by
the Board, or by the vote of a "majority of the outstanding voting securities"
(as defined under the 1940 Act) of a Fund and, in either case, by a majority of
the Disinterested Trustees by vote cast in person at a meeting called for such
purpose.
INFORMATION ABOUT KEYCORP ADVISERS
KeyCorp Advisers was organized as an Ohio corporation on July 27, 1995 and
is registered as an investment adviser under the Investment Advisers Act of
1940, as amended. It is a wholly owned subsidiary of KeyCorp Asset Management
Holdings, Inc., which is a wholly owned subsidiary of Society National Bank, a
wholly owned subsidiary of KeyCorp. Affiliates of KeyCorp Advisers manage
approximately $37 billion for numerous clients including large corporate and
public retirement plans, Taft-Hartley plans, foundations and endowments, high
net worth individuals and mutual funds.
KeyCorp, a financial services holding company, is headquartered at 127
Public Square, Cleveland, Ohio 44114. As of June 30, 1995, KeyCorp had an asset
base of $67.5 billion, with banking offices in 25 states from Maine to Alaska,
and trust and investment offices in 16 states. KeyCorp is the resulting entity
of a merger between Society Corporation, the bank holding company of which
Society National Bank was a wholly owned subsidiary, and KeyCorp, the former
bank holding company, which merger was consummated during the first quarter of
1994. KeyCorp's major business activities include providing traditional banking
and associated financial services to consumer, business and commercial markets.
Its non-bank subsidiaries include investment advisory, securities brokerage,
insurance, bank credit card processing, and mortgage leasing companies. Society
National Bank is the lead affiliate bank of KeyCorp.
KeyCorp Advisers' affiliation with Society makes accessible one of the
nation's largest in-house research facilities. Additional information about
Society is set forth under "Information About Society" in Proposal 4.
The principal executive officers and directors of KeyCorp Advisers are as
follows:
W. Christopher Maxwell, Director, Chairman and Chief Executive Officer.
Also Executive Vice President of Keycorp Management Company ("KMC").
Kathleen A. Dennis, Director and President. Also Senior Vice President
of KMC.
Martin J. Walker, Director. Also Chairman, President and Chief Executive
Officer of Society and Executive Vice President of KeyCorp.
James W. Wert, Director. Also Senior Executive Vice President and Chief
Investment Officer of KeyCorp.
William G. Spears, Director. Also Chairman, Chief Executive Officer and
Managing Director of Spears, Benzak, Salomon and Farrell, Inc. ("SBSF").
Linda A. Grandstaff, Director. Also Executive Vice President, Commercial
and International Services Group of KeyCorp.
Richard B. Ainsworth, Jr., Director. Also Executive Vice President of
Key Trust Company of Ohio, National Association.
Robert G. Jones, Director. Also Executive Vice President, Community
Banking, of KeyCorp.
Jack L. Kopnisky, Director. Also President, Key Investments, Inc.
John M. Keane, Vice President and Treasurer. Also Vice President, KMC.
Ann Kowal Smith, Secretary. Also Vice President and Senior Counsel of
KMC.
Charles G. Crane, Senior Vice President and Senior Managing Director.
Also Senior Vice President and Managing Director of SBSF.
15
<PAGE> 20
Dennis M. Grapo, Senior Vice President and Senior Managing Director.
Also Senior Vice President and Senior Managing Director of Society.
Frank J. Riccardi, Senior Vice President and Senior Managing Director.
Also Senior Vice President and Senior Managing Director of Society.
Anthony Aveni, Senior Vice President and Senior Managing Director. Also
Senior Vice President and Senior Managing Director of Society.
The business address of each of the foregoing individuals is 127
Public Square, Cleveland, Ohio 44114.
FEES AND FEE WAIVERS
Under the Current Advisory Agreement, each Fund pays Society (and under the
Proposed Advisory Agreement, each Fund would pay KeyCorp Advisers) a fee,
computed daily and paid monthly, at the annual rates set forth below as a
percentage of average daily net assets:
<TABLE>
<CAPTION>
NAME OF FUND FEE
----------------------------------------------------------------------------- -----
<S> <C>
The Victory Balanced Fund.................................................... 1.00%
The Victory Diversified Stock Fund........................................... .65%
The Victory Government Mortgage Fund......................................... .50%
The Victory Growth Fund...................................................... 1.00%
The Victory Intermediate Income Fund......................................... .75%
The Victory International Growth Fund........................................ 1.10%
The Victory Investment Quality Bond Fund..................................... .75%
The Victory Limited Term Income Fund......................................... .50%
The Victory Ohio Municipal Bond Fund......................................... .60%
The Victory Ohio Regional Stock Fund......................................... .75%
The Victory Prime Obligations Fund........................................... .35%
The Victory Special Value Fund............................................... 1.00%
The Victory Stock Index Fund................................................. .60%
The Victory Tax-Free Money Market Fund....................................... .35%
The Victory U.S. Government Obligations Fund................................. .35%
The Victory Value Fund....................................................... 1.00%
The Victory Financial Reserves Fund.......................................... .50%
The Victory Fund for Income.................................................. .50%
The Victory Government Bond Fund............................................. .55%
The Victory Institutional Money Market Fund.................................. .25%
The Victory National Municipal Bond Fund..................................... .55%
The Victory New York Tax-Free Fund........................................... .55%
The Victory Ohio Municipal Money Market Fund................................. .50%
The Victory Special Growth Fund.............................................. 1.00%
</TABLE>
16
<PAGE> 21
Under the Current Advisory Agreement, Society (and under the Proposed
Advisory Agreement, KeyCorp Advisers) may periodically reduce all or a portion
of its advisory fee with respect to any Fund. In the fiscal year ended October
31, 1994, the Funds paid to Society aggregate investment advisory fees, and
Society waived its fees and/or reimbursed expenses to a Fund, as follows:
<TABLE>
<CAPTION>
AMOUNT OF FEE
WAIVER
AND/OR
EXPENSE
NAME OF FUND FEES PAID REIMBURSEMENT
---------------------------------------------------------- ---------- -------------
<S> <C> <C>
Victory Balanced Fund..................................... $ 536,712 $ 396,767
Victory Diversified Stock Fund............................ $1,548,683 $ 82,207
Victory Government Mortgage Fund.......................... $ 800,556 $ 30,223
Victory Growth Fund....................................... $ 361,755 $ 218,180
Victory Intermediate Income Fund.......................... $ 469,249 $ 247,239
Victory International Growth Fund......................... $ 532,331 $ 90,406
Victory Investment Quality Bond Fund...................... $ 436,637 $ 240,057
Victory Limited Term Income Fund.......................... $ 421,108 $ 6,157
Victory Ohio Municipal Bond Fund.......................... $ 163,736 $ 173,917
Victory Ohio Regional Stock Fund.......................... $ 247,755 $ 10,682
Victory Prime Obligations Fund............................ $2,649,796 $ 0
Victory Special Value Fund................................ $ 588,378 $ 242,661
Victory Stock Index Fund.................................. $ 286,360 $ 100,857
Victory Tax-Free Money Market Fund........................ $ 707,270 $ 34,905
Victory U.S. Government Obligations Fund.................. $1,614,950 $ 0
Victory Value Fund........................................ $ 979,887 $ 575,355
Victory Financial Reserves Fund........................... $2,132,744 $ 584,417
Victory Ohio Municipal Money Market Fund+................. $1,517,669 $ 234,884
Victory Special Growth Fund............................... $ 152,165 $ 93,307
</TABLE>
- ---------------
+ Fiscal Year ended August 31, 1994.
Prior to June 5, 1995, Key Trust Company ("Key Trust"), an affiliate of
Society, served as the investment adviser of the predecessor funds to the Fund
for Income, Government Bond Fund, Institutional Money Market Fund, National
Municipal Bond Fund and New York Tax-Free Fund. For the fiscal years indicated
below, Key Trust Company received fees from, and Key Trust waived its fees
and/or reimbursed expenses to, such predecessor funds, as follows:
For the fiscal year ended April 30, 1995:
<TABLE>
<CAPTION>
FEE WAIVER
AND/OR
EXPENSE
NAME OF FUND FEES PAID REIMBURSEMENT
---------------------------------------------------------- ---------- -------------
<S> <C> <C>
Victory Government Bond Fund.............................. $ 608,134 $ 317,598
Victory Institutional Money Market Fund................... $1,131,754 $ 1,087,613
Victory National Municipal Bond Fund...................... $ 11,825 $ 11,825
</TABLE>
For the fiscal year ended October 31, 1994:
<TABLE>
<CAPTION>
FEE WAIVER
AND/OR
EXPENSE
NAME OF FUND FEES PAID REIMBURSEMENT
---------------------------------------------------------- ---------- -------------
<S> <C> <C>
Victory New York Tax-Free Fund............................ $ 46,945 $ 10,537
Victory Fund for Income................................... $ 82,243 $ 2,027
</TABLE>
17
<PAGE> 22
If the Proposed Advisory Agreement is approved by shareholders, KeyCorp
Advisers will continue to voluntarily waive its fees to the same extent that
Society has agreed to do so.
Society has agreed that for the periods indicated below, it will reduce its
fees to the extent that total operating expenses exceed the annual expense
ratios (as a percentage of average daily net assets) indicated below:
<TABLE>
<CAPTION>
EXPENSE RATIO
NAME OF FUND LIMITATION PERIOD LIMITATION
------------------------------------------------------- ----------------- -------------
<S> <C> <C>
Victory Fund for Income................................ 5/2/96 1.20%
Victory New York Tax-Free Fund......................... 5/2/96 1.20%
Victory Ohio Municipal Money Market Fund............... 8/31/96 .65%
Victory Special Growth Fund............................ 2/28/96 1.39%
Victory Institutional Money Market Fund................ 2/28/96 0.48%
Victory Financial Reserves Fund........................ 2/28/96 0.77%
Victory Government Bond Fund
Class A......................................... 2/28/96 1.26%
Class B......................................... 2/28/96 2.01%
Victory National Municipal Bond Fund
Class A......................................... 2/28/96 2.08%
Class B......................................... 2/28/96 2.83%
Victory Growth Fund.................................... 2/28/96 1.25%
Victory Value Fund..................................... 2/28/96 13.49%
Victory U.S. Government Obligations Fund............... 2/28/96 0.85%
Victory Limited Term Income Fund....................... 2/28/96 1.34%
Victory International Growth Fund...................... 2/28/96 2.11%
Victory Investment Quality Bond Fund................... 2/28/96 1.41%
</TABLE>
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF TRUSTEES
RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE PROPOSED ADVISORY
AGREEMENT BETWEEN
THE COMPANY AND KEYCORP ADVISERS.
PROPOSAL 3(A)
ELECTION OF TRUSTEES
It is proposed that shareholders of the Funds consider the election of the
individuals listed below (the "Nominees") to the Board of Trustees of the
Company, which is currently organized as a Massachusetts business trust. If
Proposal 1 is approved by shareholders of each Fund, the Company will be
reorganized as a Delaware business trust. The election of any Nominee will be
deemed to be effective while the Company continues to be a Massachusetts
business trust, and also will be deemed to be effective as to the initial Board
of Trustees of the new Delaware business trust, if Proposal 1 is adopted.
References to the Company should be understood as also being inclusive of both
the current Massachusetts business trust and the proposed Delaware business
trust. Biographical information about the Nominees and other relevant
information is set forth below. Each Nominee has consented to being named in
this Proxy Statement and has agreed to serve as a Board member if elected.
The persons named in the accompanying form of proxy intend to vote each
such proxy "FOR" the election of the Nominees, unless shareholders specifically
indicate on their proxies the desire to withhold authority to vote for elections
to office. It is not contemplated that any Nominee will be unable to serve as a
Board member for any reason, but if that should occur prior to the Meeting, the
proxy holders reserve the right to substitute another person or persons of their
choice as nominee or nominees.
18
<PAGE> 23
The following are the Nominees:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS YEAR FIRST BECAME
NOMINEE AGE FOR THE LAST FIVE YEARS A TRUSTEE
- ------------------------------- --- ---------------------------------------- -----------------
<S> <C> <C> <C>
Robert G. Brown................ 72 Retired; from October 1983 to November 1986
5460 N. Ocean Drive 1990, President, Cleveland Advanced
Singer Island, FL 33404 Manufacturing Program (non-profit
corporation engaged in regional economic
development); Trustee to The Victory
Funds.
Edward P. Campbell............. 45 From March 1994 to present, Executive 1994
Nordson Corporation Vice President and Chief Operating
28601 Clemens Road Officer of Nordson Corporation
Westlake, OH 44145 (manufacturer of application equipment);
from May 1988 to March 1994, Vice
President of Nordson Corporation; from
1987 to August 1994, member of the
Supervisory Committee of Society's
Collective Investment Retirement Fund;
from May 1991 to August 1994, Trustee,
Financial Reserves Fund, and from May
1993 to August 1994, Trustee, Ohio
Municipal Money Market Fund; currently,
Trustee to The Victory Funds and SBSF
Funds.
Dr. Harry Gazelle.............. 67 Retired radiologist, Drs. Hill and 1986
17822 Lake Road Thomas Corp.; Trustee to The Victory
Lakewood, Ohio 44107 Funds.
Dr. Thomas F. Morrissey........ 62 1995 Visiting Scholar, Bond University, 1994
Weatherhead School of Queensland, Australia; Professor,
Management Weatherhead School of Management, Case
Case Western Reserve University Western Reserve University; from 1989 to
10900 Euclid Avenue 1995, Associate Dean of Weatherhead
Cleveland, OH 44106-7235 School of Management; from 1987 to
August 1994, Member of the Supervisory
Committee of Society's Collective
Investment Retirement Fund; from May
1991 to August 1994, Trustee, Financial
Reserves Fund, and from May 1993 to
August 1994, Trustee, Ohio Municipal
Money Market Fund; Trustee to The
Victory Funds.
Stanley I. Landgraf............ 70 Retired; currently Trustee, Rensselaer 1994
41 Traditional Lane Polytechnic Institute; Director, Elenel
Albany, NY 12211 Corporation, Albany International
Corporation and Mechanical Technology,
Inc.; Member, Board of Overseers, School
of Management, Rensselaer Polytechnic
Institute; Member, The Fifty Group (a
Capital Region business organization);
Trustee to The Victory Funds.
Leigh A. Wilson*............... 51 From 1989 to present, Chairman and Chief 1994
River Tower Executive Officer, Glenleigh
420 East 54th Street International Limited; from 1984-1989,
Apt. 10H Chief Executive Officer, Paribas North
New York, NY 10022 America and Paribas Corporation; Trustee
to The Victory Funds and SBSF Funds.
Dr. H. Patrick Swygert......... 52 Currently, President, Howard University; 1994
Howard University Trustee to The Victory Funds; formerly
2400 6th Street, N.W. President, State University of New York
Suite 320 at Albany; Executive Vice President,
Washington, DC 20059 Temple University.
</TABLE>
- ---------------
* Mr. Wilson is deemed to be an "interested person" of The Victory Portfolios
under the 1940 Act solely by reason of his position as President.
19
<PAGE> 24
The Board presently has an Investment Policy Committee and a Business,
Legal, and Audit Committee. The members of the Investment Policy Committee are
Messrs. Morrissey, Brown and Landgraf (Chairman), who will serve until May 1996.
The function of the Investment Policy Committee is to review the existing
investment policies of the Company, including the levels of risk and types of
funds available to shareholders, and make recommendations to the Board regarding
the revision of such policies or, if necessary, the submission of such revisions
to the Company's shareholders for their consideration. The members of the
Business, Legal and Audit Committee are Messrs. Swygert (Chairman), Campbell and
Gazelle, who will serve until May 1996. The function of the Business, Legal and
Audit Committee is to recommend independent auditors and monitor accounting and
financial matters; to nominate persons to serve as Disinterested Trustees and
Trustees to serve on committees of the Board; and to review compliance and
contract matters.
The Investment Policy Committee met 4 times during the current fiscal year
commencing November 1, 1994. The Business, Legal and Audit Committee was
constituted on May 24, 1995 (and has met once since then) and replaced the Audit
Committee, the Legal Committee and the Nominating Committee, which met 3 times,
1 time and 1 time, respectively, during the current fiscal year prior to May 31,
1995.
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS
Effective June 1, 1995, each Trustee (other than Leigh A. Wilson) receives
an annual fee of $27,000 for serving as Trustee of all the Funds of the Company,
and an additional per meeting fee ($2,400 in person and $1,200 per telephonic
meeting).
Effective June 1, 1995, Leigh A. Wilson receives an annual fee of $33,000
for serving as President and Trustee for all of the Funds of the Company, and an
additional per meeting fee ($3,000 in person and $1,500 per telephonic meeting).
The following tables indicate the compensation received by each Trustee
during the fiscal year of the Funds which ends on October 31, 1995:
<TABLE>
<CAPTION>
THE THE VICTORY THE
VICTORY
THE VICTORY VICTORY GOVERNMENT THE VICTORY
THE VICTORY INTERNATIONAL
BALANCED DIVERSIFIED MORTGAGE GROWTH
INTERMEDIATE GROWTH
FUND(1) STOCK FUND FUND(1) FUND(2) INCOME
FUND FUND(2)
----------- ---------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert G. Brown, Trustee..... $1,178.91 $2,331.48 $1,126.45 $1,168.23 $980.48
$880.52
Edward P. Campbell,
Trustee.................... 1,539.75 2,009.87 1,174.17 740.45 841.67
670.63
Harry Gazelle, Trustee....... 974.79 1,929.86 919.93 987.41 809.59
735.72
John W. Kemper, Trustee*..... 541.57 1,060.05 589.95 843.06 458.81
506.60
Thomas F. Morrissey,
Trustee.................... 1,539.75 2,009.87 1,174.17 1,151.74 841.67
802.87
Stanley I. Landgraf,
Trustee.................... 1,014.75 2,009.87 949.17 842.51 841.67
708.01
Leigh A. Wilson, Trustee..... 1,112.55 2,206.35 1,021.27 1,213.17 920.59
865.44
H. Patrick Swygert,
Trustee.................... 1,014.75 2,009.87 949.17 1,151.74 841.67
802.87
John R. Young, Trustee*...... 577.04 1,132.82 621.95 750.08 488.98
494.95
John Buckingham, Trustee*.... 541.57 1,060.05 589.95 226.15 458.81
409.93
</TABLE>
- ---------------
* Resigned
(1) For certain Trustees, these amounts include payments made by the Society
Collective Investment Retirement Funds, which were reorganized into these
Funds as of December 19, 1994.
(2) For certain Trustees, these amounts include amounts paid by a Portfolio of
The Victory Funds which merged into this Fund as of June 5, 1995.
20
<PAGE> 25
<TABLE>
<CAPTION>
THE VICTORY THE VICTORY THE VICTORY THE VICTORY
THE VICTORY
INVESTMENT LIMITED TERM OHIO OHIO PRIME
THE VICTORY
QUALITY BOND INCOME MUNICIPAL REGIONAL
OBLIGATIONS SPECIAL
FUND(2) FUND(2) BOND FUND STOCK FUND
FUND VALUE FUND
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert G. Brown, Trustee.... $ 1,052.54 $ 1,155.92 $443.98 $271.80
$4,747.58 $1,091.75
Edward P. Campbell,
Trustee................... 776.01 922.20 376.72 231.79 3,921.95
942.58
Harry Gazelle, Trustee...... 876.72 969.26 364.09 223.52 3,832.26
904.37
John W. Kemper, Trustee*.... 644.08 581.73 223.59 133.11 2,818.92
489.58
Thomas F. Morrissey,
Trustee................... 966.09 1,045.87 376.72 231.79 3,921.95
942.58
Stanley I. Landgraf,
Trustee................... 827.74 960.31 376.72 231.79 3,921.95
942.58
Leigh A. Wilson, Trustee.... 1,033.38 1,143.77 407.85 252.05 4,143.70
1,036.09
H. Patrick Swygert,
Trustee................... 966.09 1,045.87 376.72 231.79 3,921.95
942.58
John R. Young, Trustee*..... 619.72 590.17 236.57 140.98 2,915.30
523.93
John Buckingham, Trustee*... 504.76 495.35 223.59 133.11 2,818.92
489.58
</TABLE>
<TABLE>
<CAPTION>
THE VICTORY THE THE VICTORY
THE VICTORY U.S. VICTORY
INSTITUTIONAL
TAX-FREE GOVERNMENT THE VICTORY THE VICTORY
GOVERNMENT MONEY THE VICTORY
MONEY OBLIGATIONS VALUE FUND FOR BOND
MARKET STOCK INDEX
MARKET FUND FUND(2) FUND(2) INCOME(3) FUND(3)
FUND(3) FUND
----------- ----------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert G. Brown, Trustee...... $1,781.03 $5,774.42 $1,842.48 $217.14 $ 773.66
$3,820.17 $797.69
Edward P. Campbell, Trustee... 1,523.27 4,324.24 1,581.23 114.18 389.76
2,204.64 689.90
Harry Gazelle, Trustee........ 1,467.67 4,922.46 1,522.01 189.79 675.74
3,425.47 661.40
John W. Kemper, Trustee*...... 853.51 3,098.06 841.91 161.55 624.83
2,554.32 356.16
Thomas F. Morrissey,
Trustee..................... 1,523.57 5,336.76 1,583.17 228.46 819.94 4,004.82
689.90
Stanley I. Landgraf,
Trustee..................... 1,523.57 4,828.66 1,580.86 157.16 535.10 2,927.66
689.90
Leigh A. Wilson, Trustee...... 1,661.60 5,902.24 1,732.57 248.70 874.92
4,397.12 759.38
H. Patrick Swygert, Trustee... 1,523.57 5,336.76 1,583.17 228.46 819.94
4,004.82 689.90
John R. Young, Trustee*....... 900.37 3,074.28 899.81 140.67 535.81
2,223.97 379.85
John D. Buckingham,
Trustee*.................... 853.51 2,478.65 840.54 82.92 318.60 1,333.87
356.16
</TABLE>
- ---------------
* Resigned
(2) For certain Trustees, these amounts include amounts paid by a Portfolio of
The Victory Funds which merged into this Fund as of June 5, 1995.
(3) For certain Trustees, these amounts include amounts paid by this Fund's
predecessor, a Portfolio of The Victory Funds, which was reorganized as the
Fund as of June 5, 1995.
21
<PAGE> 26
<TABLE>
<CAPTION>
THE VICTORY
OHIO THE VICTORY THE
VICTORY
THE VICTORY THE VICTORY MUNICIPAL SPECIAL
FINANCIAL
NATIONAL MUNICIPAL NEW YORK MONEY
GROWTH RESERVES
BOND FUND(3) TAX-FREE FUND(3) MARKET FUND(3)
FUND(2) FUND(3)
------------------ ---------------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Robert G. Brown, Trustee.......... $39.89 $ 141.29 $ 2,962.00 $ 401.99
$4,834.58
Edward P. Campbell, Trustee....... 26.78 76.45 4,899.18 272.35
3,549.91
Harry Gazelle, Trustee............ 37.48 123.38 3,548.52 341.34
5,474.20
John W. Kemper, Trustee*.......... 18.20 100.45 1,893.61 260.65
2,913.01
Thomas F. Morrissey, Trustee...... 40.09 148.08 5,602.37 388.49
4,996.26
Stanley I. Landgraf, Trustee...... 38.83 104.47 3,183.11 307.57
5,112.02
Leigh A. Wilson, Trustee.......... 49.44 162.90 3,424.84 417.32
5,729.73
H. Patrick Swygert, Trustee....... 40.09 148.08 3,102.37 388.49
4,996.26
John R. Young, Trustee*........... 18.91 88.31 1,661.29 238.89
2,709.16
John D. Buckingham, Trustee*...... 13.33 51.65 1,784.96 177.06
2,598.87
</TABLE>
<TABLE>
<CAPTION>
TOTAL COMPENSATION
PENSION OR RETIREMENT BENEFITS ESTIMATED ANNUAL
BENEFITS FROM VICTORY
ACCRUED AS FUND EXPENSES UPON RETIREMENT
"FUND COMPLEX"(4)
------------------------------ ------------------------- ------------------
<S> <C> <C> <C>
Robert G. Brown, Trustee........ -0- -0- $39,815.98
Edward P. Campbell, Trustee..... -0- -0- 39,799.68
Harry Gazelle, Trustee.......... -0- -0- 35,916.98
John W. Kemper, Trustee* ....... -0- -0- 22,567.31
Thomas F. Morrissey, Trustee.... -0- -0- 40,366.98
Stanley I. Landgraf, Trustee.... -0- -0- 34,615.98
Leigh A. Wilson, Trustee ....... -0- -0- 46,716.97
H. Patrick Swygert, Trustee..... -0- -0- 37,116.98
John R. Young, Trustee*......... -0- -0- 21,963.81
John D. Buckingham, Trustee*.... -0- -0- 18,841.89
</TABLE>
- ---------------
* Resigned
(2) For certain Trustees, these amounts include amounts paid by a Portfolio of
The Victory Funds which merged into this Fund as of June 5, 1995.
(3) For certain Trustees, these amounts include amounts paid by this Fund's
predecessor, a Portfolio of The Victory Funds, which was reorganized as the
Fund as of June 5, 1995.
(4) For certain Trustees, these amounts include compensation received from The
Victory Funds (which were reorganized into the Current Company as of June 5,
1995), the SBSF Funds (the investment adviser of which was acquired by
KeyCorp effective April 1995) and Society's Collective Investment Retirement
Funds, which were reorganized into the Balanced Fund and Government Mortgage
Fund as of December 19, 1994. There are presently 28 mutual funds from which
the above-named Trustees are compensated in the Victory "Fund Complex," but
not all of the above-named Trustees serve on the boards of each fund in the
"Fund Complex."
PRINCIPAL EXECUTIVE OFFICERS
The principal executive officers of the Company are as follows:
Leigh A. Wilson -- President
William J. Blundin -- Vice President
J. David Huber -- Vice President
Adrian J. Waters -- Assistant Treasurer
Scott A. Englehart -- Secretary
George O. Martinez -- Assistant Secretary
Martin R. Dean -- Treasurer
22
<PAGE> 27
OWNERSHIP OF SHARES OF THE FUNDS
The Trustees and officers as a group directly or beneficially own less than
1% of each Fund.
REQUIRED VOTE
The election of each of the Nominees listed above requires the affirmative
vote of a plurality of the votes entitled to be cast at the Meeting by all
shareholders of the Company.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES AS A TRUSTEE OF THE VICTORY
PORTFOLIOS.
PROPOSAL 3(B)
RATIFICATION OF COOPERS & LYBRAND L.L.P.
AS INDEPENDENT PUBLIC ACCOUNTANTS
The Board, including a majority of the Disinterested Trustees, is
recommending Coopers & Lybrand L.L.P. to serve as independent public accountants
of each Fund for each Fund's next fiscal year, subject to the right of the Fund
to terminate such employment immediately without penalty by vote of a majority
of the outstanding voting securities of the Fund at any meeting called for such
purpose. The Board's selection is hereby submitted to the shareholders for
ratification.
Coopers & Lybrand L.L.P. served as the independent auditors for each of the
Funds during its most recent fiscal year and/or its fiscal period ended October
31, 1995. Services performed by Coopers & Lybrand L.L.P. during such time have
included the audit of the financial statements of the Company and services
related to filings of the Company with the SEC. Coopers & Lybrand L.L.P. has
informed each Fund that neither Coopers & Lybrand L.L.P. nor any of its partners
has any direct or indirect financial interest in the Company except as auditors
and independent public accountants. Representatives of Coopers & Lybrand L.L.P.
are not expected to be present at the Meeting but have been given the
opportunity to make a statement if they so desire, and will be available should
any matter arise requiring their participation.
REQUIRED VOTE
The ratification of the selection of Coopers & Lybrand L.L.P. as the
independent public accountants of a Fund requires the affirmative vote of a
majority of the votes entitled to be cast at the Meeting by the shareholders of
the Fund.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF COOPERS & LYBRAND L.L.P. AS
INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE NEXT FISCAL YEAR OF EACH RESPECTIVE FUND.
23
<PAGE> 28
PROPOSAL 4
APPROVAL OR DISAPPROVAL OF A NEW SUB-ADVISORY
AGREEMENT BETWEEN KEYCORP ADVISERS AND SOCIETY
This Proposal relates to all Funds except the Fund for Income and the
Special Growth Fund.
INTRODUCTION
If shareholders approve Proposal 2, then KeyCorp Advisers will serve as the
investment adviser to the Funds pursuant to the Proposed Advisory Agreement. If,
however, shareholders of any particular Fund do not approve Proposal 2, Society
will continue to serve as the investment adviser to such Fund and the following
Proposal will not be implemented for that Fund even if approved by shareholders
of that Fund. The Proposed Advisory Agreement is described above and a copy is
attached as Exhibit C.
CONSIDERATION AND PROPOSAL OF THE SUB-ADVISORY AGREEMENT
Currently, Society serves as the investment adviser to all of the Funds,
and to no other mutual funds. In the event that shareholders approve Proposal 2
and KeyCorp Advisers becomes the investment adviser to the Funds, it is being
proposed that KeyCorp Advisers be permitted to utilize the services of Society
as a sub-adviser to KeyCorp Advisers under a proposed Investment Sub-Advisory
Agreement (the "Society Agreement") in order to maintain continuity of the
advisory services being rendered to all of the Funds, except the Fund for Income
and Special Growth Fund (which are covered by Proposals 5 and 6, under which new
sub-advisory agreements are being proposed for those Funds' current
sub-advisers).
The proposed form of the Society Agreement is attached as Exhibit D and
should be read in conjunction with the following. Certain provisions set forth
in Exhibit D reflect the assumption that shareholders of the Funds will approve
Proposal 1 and the Funds will be converted into a Delaware business trust.
However, since approval of this Proposal 4 is not dependent upon an approval of
Proposal 1 or a Conversion of the Funds to a Delaware business trust, and since
the terms of this Proposal (if approved) may be implemented prior to the
Conversion, the Current Company may enter into the Proposed Advisory Agreement
(in which case the Proposed Advisory Agreement will reflect certain information
about the Current Company rather than the Successor Company).
KeyCorp Advisers' decision to continue the services of Society in a
sub-advisory capacity was based on various considerations, including Society's
experience and record as the current investment adviser, that Society has over
$19 billion in assets under management and provides a wide range of investment
management capabilities, including the ability to discriminate among a wide
range of potential investments as part of an investment program for each of the
Funds, that risk control is integral to its methodology, that it has shown a
relative consistency in investment management performance, and the
attractiveness of the fee structure and estimated transaction costs that would
be incurred.
Based upon the foregoing, KeyCorp Advisers recommended to the Board of
Trustees of the Funds that, subject to approval by the Board and such Funds'
shareholders of (1) the Proposed Advisory Agreement and (2) the Society
Agreement, KeyCorp Advisers enter into the Society Agreement with Society. In
considering whether to recommend that the Society Agreement be approved by
shareholders, the Board requested and evaluated various information from KeyCorp
Advisers and Society relevant to KeyCorp Advisers' decision. In addition, the
Board considered various other factors which it deemed to be relevant,
including, but not limited to, the capabilities to be provided by Society, the
stability of its investment staff, the trading systems to be utilized and the
potential to minimize transaction costs, the ability to customize portfolios for
the Funds, Society's experience acting as the Funds' current investment adviser,
and KeyCorp Advisers' access to the various investment and research resources of
Society.
DESCRIPTION OF THE PROPOSED SOCIETY AGREEMENT
The proposed arrangement between KeyCorp Advisers and Society under the
Society Agreement would enable KeyCorp Advisers to manage the investment
activities of the Funds covered in the Society Agreement
24
<PAGE> 29
most effectively by delegating to Society portfolio management duties relating
to transactions in the securities held by such Funds. With respect to the day to
day management of the Funds under the Society Agreement, Society would make
decisions concerning, and place all orders for, purchases and sales of
securities and help maintain the records relating to such purchases and sales.
Society may, in its discretion, provide such services through its own employees
or the employees of one or more affiliated companies that are qualified to act
as an investment sub-adviser under applicable laws and are under the common
control of KeyCorp; provided that (i) all persons, when providing services under
the Society Agreement, are functioning as part of an organized group of persons,
and (ii) such organized group of persons is managed at all times by authorized
officers of Society.
KeyCorp Advisers and Society would bear all expenses in connection with the
performance of their respective services and the services under the Society
Agreement.
As investment adviser, KeyCorp Advisers would oversee the management of the
Funds under the Society Agreement, and, subject to the general supervision of
the Company's Board of Trustees, would make recommendations and provide
guidelines to Society based on general economic trends and macroeconomic
factors. Among the recommendations which may be provided by KeyCorp Advisers to
Society would be guidelines and benchmarks against which the Funds would be
managed.
In consideration of all investment advisory services to be provided and
expenses assumed under the Proposed Advisory Agreement and the new arrangement
with Society, KEYCORP ADVISERS WOULD BE ENTITLED TO RECEIVE ADVISORY
FEES FROM
EACH FUND AT THE RATE INDICATED ABOVE IN PROPOSAL 2, AND IN EXHIBIT C.
THE RATES
OF THESE FEES ARE THE SAME AS THE RATES AT WHICH SOCIETY IS CURRENTLY
ENTITLED
TO RECEIVE FEES AS THE INVESTMENT ADVISER OF THE RESPECTIVE FUNDS.
From the fee
paid by the Funds under the Proposed Advisory Agreement to KeyCorp Advisers,
KeyCorp Advisers will bear responsibility for payment of sub-advisory fees to
Society. Therefore, the Funds would not bear any increase in fees resulting from
the Proposed Advisory Agreement and the Society Agreement.
For its services under the Society Agreement, KeyCorp Advisers would pay
Society sub-advisory fees at rates (based on an annual percentage of average
daily net assets) which vary according to a sliding scale containing
"breakpoints" at which decreases in the rate of the sub-advisory fees correspond
to increases in the average daily net asset values of a Fund. The various
breakpoints, and rates of the sub-advisory fees payable thereat, are set forth
on Schedule A to the Society Agreement, which is attached as Exhibit D to this
Proxy Statement. Assuming current asset levels, the sub-advisory fees would be
paid at the rates indicated below:
<TABLE>
<S> <C> <C> <C>
Balanced............................. .38% Special Value........................ .51%
Diversified Stock.................... .38% Stock Index.......................... .39%
Government Mortgage.................. .24% Tax-Free Money Market................ .14%
Growth............................... .42% U.S. Government Obligations.......... .14%
Intermediate Income.................. .23% Value................................ .38%
International Growth................. .56% Financial Reserves................... .14%
Investment Quality Bond.............. .25% Government Bond...................... .34%
Limited Term Income.................. .23% Institutional Money Market........... .14%
Ohio Municipal Bond.................. .28% National Municipal Bond.............. .40%
Ohio Regional Stock.................. .69% New York Tax-Free.................... .37%
Prime Obligations.................... .14% Ohio Municipal Money Market.......... .14%
</TABLE>
The Board, including a majority of the Disinterested Trustees, unanimously
approved the Society Agreement at a meeting held on September 20, 1995. If
approved by shareholders, unless sooner terminated, the Society Agreement will
remain in effect for two years and will thereafter continue for successive
one-year periods, provided that such continuation is specifically approved at
least annually for a Fund by the Board, or by the vote of a "majority of the
outstanding voting securities" of such Fund as defined under the 1940 Act and,
in either case, by a majority of the Disinterested Trustees, by vote cast in
person at a meeting called for such purpose. The Society Agreement is terminable
at any time as to any Fund, without penalty, by vote of the Board, by KeyCorp
Advisers, by the vote of "a majority of the outstanding voting securities" of
the Fund, or
25
<PAGE> 30
by Society, upon 60 days' written notice. The Society Agreement will terminate
automatically in the event of its assignment, as defined under the 1940 Act.
In the event that both the Proposed Advisory Agreement and the Society
Agreement are not approved by shareholders of any Fund to which this Proposal
relates (i.e., all Funds other than the Fund for Income and Special Growth
Fund), neither the Proposed Advisory Agreement nor the Society Agreement will be
implemented for such Fund, and the Current Advisory Agreement between such Fund
and Society will remain in effect.
INFORMATION ABOUT SOCIETY
Society was organized as an Ohio corporation on October 23, 1981 and is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended. Society is a wholly owned subsidiary of KeyCorp Asset Management
Holdings, Inc., which is a wholly owned subsidiary of Society National Bank, a
wholly owned subsidiary of KeyCorp. Society manages approximately $19 billion
for numerous clients including large corporate and public retirement plans,
Taft-Hartley plans, foundations and endowments, high net worth individuals and
mutual funds. Information about KeyCorp and its affiliates is set forth under
"Information About KeyCorp Advisers," under Proposal 2.
Society maintains one of the nation's largest in-house research facilities.
Society National Bank and its predecessors have been providing financial
guidance to trusts, pension funds, and institutions nationwide for over 100
years.
Information about voluntary waivers of Society's advisory fees is set forth
under "Fees and Fee Waivers" under Proposal 2.
The principal executive officers and directors of Society are as follows:
Directors:
Martin J. Walker, also Chairman, President and Chief Executive Officer
of Society and Executive Vice President of KeyCorp.
James W. Wert, also Senior Executive Vice President and Chief Investment
Officer of KeyCorp.
Richard B. Ainsworth, Jr., also Executive Vice President of Key Trust
Company of Ohio, National Association.
Dennis M. Grapo, also Senior Vice President and Senior Managing Director
of Society.
Frank J. Riccardi, also Senior Vice President and Senior Managing
Director of Society.
Kenneth W. Ostrowski, also Senior Vice President and Senior Managing
Director of Society.
Anthony Aveni, also Senior Vice President and Senior Managing Director
of Society.
James S. Bingay, also Executive Vice President of KeyCorp.
John E. Kohl, also Executive Vice President of KMC.
Other Officers:
Stacy L. Bauer, Secretary, also Vice President and Associate Counsel
of KMC.
James D. Kacic, Vice President and Treasurer of Society.
The business address of each of the foregoing individuals is 127 Public
Square, Cleveland, Ohio 44114.
BUSINESS MANAGEMENT AGREEMENT
In connection with its obligations under the Society Agreement, Society
will enter into a Business Management Agreement with KeyCorp Advisers or an
affiliate thereof, pursuant to which KeyCorp Advisers, or its affiliate, will
provide certain administrative and support services to Society. Such services
include preparing reports to the Board, recordkeeping services, and services
rendered in connection with the
26
<PAGE> 31
preparation of regulatory filings and other reports, and regulatory and
compliance systems and support services.
For such services, Society would pay fees to KeyCorp Advisers (or its
affiliate) which vary according to a sliding scale containing "breakpoints" at
which decreases in the business management fees correspond to increases in the
average daily net asset values of a Fund. The various breakpoints, and the rates
of the business management fees that would be payable thereat, are set forth on
Schedule 2 to this Proxy Statement. Assuming current asset levels, the business
management fees would be paid at the rates indicated below:
<TABLE>
<S> <C> <C> <C>
Balanced............................. .18% Special Value........................ .16%
Diversified Stock.................... .03% Stock Index.......................... .04%
Government Mortgage.................. .09% Tax-Free Money Market................ .09%
Growth............................... .07% U.S. Government Obligations.......... .09%
Intermediate Income.................. .08% Value................................ .03%
International Growth................. .21% Financial Reserves................... .09%
Investment Quality Bond.............. .10% Government Bond...................... .19%
Limited Term Income.................. .08% Institutional Money Market........... .09%
Ohio Municipal Bond.................. .13% National Municipal Bond.............. .25%
Ohio Regional Stock.................. .34% New York Tax-Free.................... .22%
Prime Obligations.................... .09% Ohio Municipal Money Market.......... .09%
</TABLE>
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF TRUSTEES
RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE SOCIETY AGREEMENT
BETWEEN KEYCORP
ADVISERS AND SOCIETY.
PROPOSAL 5
APPROVAL OR DISAPPROVAL OF A NEW SUB-ADVISORY
AGREEMENT FOR THE FUND FOR INCOME BETWEEN
KEYCORP ADVISERS AND FIRST ALBANY
This Proposal relates only to the Fund for Income.
THE INVESTMENT ADVISER
If shareholders approve Proposal 2, then KeyCorp Advisers, as described
above, will serve as the investment adviser to the Funds pursuant to the
Proposed Advisory Agreement. If, however, shareholders of the Fund for Income do
not approve Proposal 2, Society will continue to serve as the investment adviser
to the Fund and the following Proposal will not be implemented even if approved
by shareholders.
CONSIDERATION AND PROPOSAL OF THE SUB-ADVISORY AGREEMENT
Currently, Society retains First Albany as the sub-adviser to the Fund for
Income. In the event that shareholders approve Proposal 2, it is being proposed
that KeyCorp Advisers be permitted to utilize the services of First Albany as a
sub-adviser to KeyCorp Advisers under the proposed Sub-Advisory Agreement (the
"First Albany Agreement") in order to maintain continuity and to improve the
effectiveness of the advisory services to be rendered to the Fund for Income.
KeyCorp Advisers' decision to continue the services of First Albany as
opposed to retaining other potential sub-advisers was based on various
considerations, including that First Albany provides extensive expertise in
selecting mortgage-related securities; that risk control is integral to its
methodology; that it has shown a relative consistency in investment management
performance; and the attractiveness of the fee structure and estimated
transaction costs that would be incurred.
Based upon the foregoing, KeyCorp Advisers recommended to the Board that,
subject to approval by the Board and the Fund for Income's shareholders of (1)
the Proposed Advisory Agreement and (2) the First Albany Agreement, KeyCorp
Advisers enter into the First Albany Agreement with First Albany. In
27
<PAGE> 32
considering whether to recommend that the First Albany Agreement be approved by
shareholders, the Board requested and evaluated various information from KeyCorp
Advisers and First Albany relevant to KeyCorp Advisers' decision. In addition,
the Board considered various other factors which it deemed to be relevant,
including, but not limited to, the capabilities to be provided by First Albany;
the consistency and stability of its investment team; the trading systems to be
utilized and the potential to minimize transaction costs; the ability to
customize a portfolio for the Fund; the proposed fee schedule and allocation of
fees between KeyCorp Advisers and First Albany; First Albany's experience acting
as a sub-adviser; and KeyCorp Advisers' access to the various resources of First
Albany.
DESCRIPTION OF THE PROPOSED FIRST ALBANY AGREEMENT
The proposed form of the First Albany Agreement is attached as Exhibit E
and should be read in conjunction with the following. Certain provisions set
forth in Exhibit E reflect the assumption that shareholders of the Fund for
Income will approve Proposal 1 and the Fund for Income will be converted into a
series of the Successor Company, a Delaware business trust. However, since
approval of this Proposal 5 is not dependent upon an approval of Proposal 1 or a
Conversion of the Funds into a Delaware business trust, and since the terms of
this Proposal (if approved) may be implemented prior to the Conversion, the Fund
for Income of the Current Company may enter into the First Albany Agreement (in
which case the First Albany Agreement will reflect certain information about the
Current Company rather than the Successor Company).
In consideration of all investment advisory services to be provided and
expenses assumed under the Proposed Advisory Agreement and the new arrangement
with First Albany, KEYCORP ADVISERS WOULD BE ENTITLED TO RECEIVE AN
ADVISORY FEE
CALCULATED AT THE ANNUAL RATE OF .50% OF THE FUND FOR INCOME'S
AVERAGE DAILY NET
ASSETS -- THE SAME RATE AT WHICH SOCIETY IS CURRENTLY ENTITLED TO
RECEIVE ITS
ADVISORY FEE. From the fee paid by the Fund for Income to KeyCorp Advisers,
KeyCorp Advisers will bear responsibility for payment of the sub-advisory fee to
First Albany (but may instruct the Fund for Income to pay such sub-advisory fee
directly to First Albany). The expenses of the Fund for Income would not be
increased as a result of the approval of the First Albany Agreement.
For its service under the First Albany Agreement, KeyCorp Advisers would
pay First Albany a sub-advisory fee at an annual rate of .20% of the average
daily net assets of the Fund for Income, which is the same rate of compensation
that is currently being paid under the First Albany Sub-Advisory Agreement with
Society.
The Board, including a majority of the Disinterested Trustees who are not
interested persons of the Fund, KeyCorp Advisers or First Albany, unanimously
approved the First Albany Agreement at a meeting held on September 20, 1995. If
approved by shareholders, unless sooner terminated, the First Albany Agreement
will remain in effect for an original term expiring April 30, 1996 and will
thereafter continue for successive one-year periods, provided that such
continuation is specifically approved at least annually by the Board, or by the
vote of a "majority of the outstanding voting securities" of the Fund for Income
as defined under the 1940 Act and, in either case, by a majority of the
Disinterested Trustees, by vote cast in person at a meeting called for such
purpose. The First Albany Agreement is terminable at any time, without penalty,
by vote of the Board, by KeyCorp Advisers, by the vote of "a majority of the
outstanding voting securities" of the Fund for Income, or by First Albany, upon
60 days' written notice. The First Albany Agreement will terminate automatically
in the event of its assignment, as defined under the 1940 Act.
In the event that both the Proposed Advisory Agreement (see Proposal 2) and
the proposed First Albany Agreement are not approved by shareholders of the Fund
for Income, neither the Proposed Advisory Agreement nor the proposed First
Albany Agreement will be implemented, and the Current Advisory Agreement with
Society and the current First Albany sub-advisory agreement will remain in
effect.
COMPARISON OF FIRST ALBANY AGREEMENT AND CURRENT SUB-ADVISORY
AGREEMENT
The First Albany Agreement between KeyCorp Advisers and First Albany and
the current sub-advisory agreement between Society and First Albany are similar.
The obligations of the parties, the rights and responsibilities of First Albany,
the portfolio managers and the fees are the same in each agreement.
28
<PAGE> 33
The agreements differ in that many of the supplemental provisions and
clarifications which have been added to the Proposed Advisory Agreement are also
included in the First Albany Agreement. For example, the First Albany Agreement
provides clarification concerning the allocation of brokerage services and "soft
dollars." In addition, the First Albany Agreement contains representations and
warranties by First Albany concerning its corporate structure and state and
federal registration as an investment adviser.
The current sub-advisory agreement was approved by shareholders at a
meeting related to the reorganization of the Funds on April 28, 1995. The
current sub-advisory agreement was executed as of June 5, 1995.
INFORMATION ABOUT FIRST ALBANY
First Albany was incorporated on July 3, 1991, as a wholly owned subsidiary
of First Albany Companies, Inc. First Albany Companies, Inc. is a publicly
traded holding company, a principal subsidiary of which is First Albany
Corporation, a registered broker-dealer.
First Albany provides investment advisory services to the Fund for Income
and to no other investment companies. First Albany also provides investment
supervisory services to other accounts, such as those of individuals,
corporations, and pension and profit sharing plans.
The following persons are directors of First Albany:
Hugh A. Johnson, Jr., is President and Chairman of the Board of
Directors of First Albany. Mr. Johnson is also Senior Vice President,
Chief Investment Officer and a director of First Albany Corporation. Mr.
Johnson is also Senior Vice President and a director of First Albany
Companies, Inc.
George C. McNamee is Chairman of the Board of Directors of First Albany
Corporation and of First Albany Companies, Inc.
Alan P. Goldberg is President and a director of First Albany Corporation
and of First Albany Companies, Inc.
In addition to Mr. Johnson, the following persons are executive officers of
First Albany:
Robert T. Hennes, Jr., is Executive Vice President and Secretary of
First Albany. Mr. Hennes was previously Chairman of Dollar Dry Dock
Investment Management Corporation and President of Investors Preference
New York Tax Free Fund, Inc. and Investors Preference Fund for Income,
Inc.
Thomas J. Curran is a Managing Director of First Albany and a Senior
Vice President of First Albany Corporation.
Paul V. Ireland is a Managing Director of First Albany and a Vice
President of First Albany Corporation.
C. Lee Liscom is a Managing Director of First Albany and a Vice
President of First Albany Corporation. Mr. Liscom was previously an
Executive Vice President of Key Trust Company.
David J. Cunningham is Treasurer of First Albany and a Senior Vice
President and Chief Financial Officer of First Albany Corporation and of
First Albany Companies, Inc.
The address of each of the above individuals is 41 State Street, Albany,
New York 12207, at which First Albany maintains its offices.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF TRUSTEES
RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE FIRST ALBANY AGREEMENT
BETWEEN KEYCORP
ADVISERS AND FIRST ALBANY.
29
<PAGE> 34
PROPOSAL 6
APPROVAL OR DISAPPROVAL OF A NEW SUB-ADVISORY
AGREEMENT FOR THE SPECIAL GROWTH FUND
BETWEEN KEYCORP ADVISERS AND T. ROWE PRICE
This Proposal relates only to the Special Growth Fund.
THE INVESTMENT ADVISER
If shareholders approve Proposal 2, then KeyCorp Advisers, as described
above, will serve as the investment adviser to the Funds pursuant to the
Proposed Advisory Agreement. If, however, shareholders of the Special Growth
Fund do not approve Proposal 2, Society will continue to serve as the investment
adviser to the Fund and the following Proposal will not be implemented even if
approved by shareholders.
CONSIDERATION AND PROPOSAL OF THE SUB-ADVISORY AGREEMENT
Currently, Society retains T. Rowe Price as the sub-adviser to the Special
Growth Fund. In the event that shareholders approve Proposal 2, it is being
proposed that KeyCorp Advisers be permitted to utilize the services of T. Rowe
Price as a sub-adviser to KeyCorp Advisers under the proposed Sub-Advisory
Agreement (the "T. Rowe Agreement") in order to maintain continuity and to
improve the effectiveness of the advisory services to be rendered to the Special
Growth Fund.
KeyCorp Advisers' decision to continue the services of T. Rowe Price as
opposed to retaining other potential sub-advisers was based on various
considerations, including that T. Rowe Price and its affiliates have over $65
billion in assets under management and provide a wide range of investment
management capabilities, including the ability to discriminate among a wide
range of potential investments as part of an investment program for the Special
Growth Fund; that risk control is integral to its methodology; that it has shown
a relative consistency in investment management performance; that it has the
flexibility to customize an application of its Systematic Equity Investing
approach for the Special Growth Fund; and the attractiveness of the fee
structure and estimated transaction costs that would be incurred, especially
since T. Rowe Price utilizes state-of-the-art trading systems, and a relatively
low turnover rate is a typical result of the strategy utilized in performing its
advisory services.
Based upon the foregoing, KeyCorp Advisers recommended to the Board that,
subject to approval by the Board and the Special Growth Fund's shareholders of
(1) the Proposed Advisory Agreement and (2) the T. Rowe Agreement, KeyCorp
Advisers enter into the proposed T. Rowe Agreement with T. Rowe Price. In
considering whether to recommend that the T. Rowe Agreement be approved by
shareholders, the Board requested and evaluated various information from KeyCorp
Advisers and T. Rowe Price relevant to KeyCorp Advisers' decision. In addition,
the Board considered various other factors which it deemed to be relevant,
including, but not limited to, the capabilities to be provided by T. Rowe Price;
the consistency and stability of its investment team; the trading systems to be
utilized and the potential to minimize transaction costs; the ability to
customize a portfolio for the Fund; the proposed fee schedule and allocation of
fees between KeyCorp Advisers and T. Rowe Price; T. Rowe Price's experience
acting as a sub-adviser; T. Rowe Price's experience as a mutual fund adviser;
and KeyCorp Advisers' access to the various resources of T. Rowe Price.
DESCRIPTION OF THE PROPOSED T. ROWE AGREEMENT
The proposed form of the T. Rowe Agreement is attached as Exhibit F and
should be read in conjunction with the following. Certain provisions set forth
in Exhibit F reflect the assumption that shareholders of the Special Growth Fund
will approve Proposal 1 and the Special Growth Fund will be converted into a
series of the Successor Company, a Delaware business trust. However, since
approval of this Proposal 6 is not dependent upon an approval of Proposal 1 or a
conversion of the Funds into a Delaware business trust, and since the terms of
this Proposal (if approved) may be implemented prior to the conversion, the
Special Growth Fund of the Current Company may enter into the T. Rowe Agreement
(in which case the T. Rowe Agreement will reflect certain information about the
Current Company rather than the Successor Company).
30
<PAGE> 35
In consideration of all investment advisory services to be provided and
expenses assumed under the Proposed Investment Advisory Agreement and the new
arrangement with T. Rowe Price, KEYCORP ADVISERS WOULD BE ENTITLED TO
RECEIVE AN
ADVISORY FEE CALCULATED AT THE ANNUAL RATE OF 1.00% OF THE SPECIAL
GROWTH FUND'S
AVERAGE DAILY NET ASSETS -- THE SAME RATE AT WHICH SOCIETY IS
CURRENTLY ENTITLED
TO RECEIVE ITS ADVISORY FEE. From the fee paid by the Special Growth Fund to
KeyCorp Advisers, KeyCorp Advisers will bear responsibility for payment of the
sub-advisory fee to T. Rowe Price (but may instruct the Special Growth Fund to
pay such sub-advisory fee directly to T. Rowe Price). The expenses of the
Special Growth Fund would not be increased as a result of the approval of the T.
Rowe Agreement.
For its services under the T. Rowe Agreement, KeyCorp Advisers would pay T.
Rowe Price a sub-advisory fee at an annual rate of .25% of the average daily net
assets of the Special Growth Fund, except that to the extent such average daily
net assets exceed $100 million, the sub-advisory fee will be paid at .20% of the
Special Growth Fund's average daily net assets over such amount, which is the
same rate of compensation that is currently being paid under the current T. Rowe
Price sub-advisory agreement with Society.
The Board, including a majority of the Disinterested Trustees who are not
interested persons of the Fund, KeyCorp Advisers or T. Rowe Price, unanimously
approved the proposed T. Rowe Agreement at a meeting held on September 20, 1995.
If approved by shareholders, unless sooner terminated, the T. Rowe Agreement
will remain in effect for an original term expiring June 4, 1996 and will
thereafter continue for successive one-year periods, provided that such
continuation is specifically approved at least annually by the Board, or by the
vote of a "majority of the outstanding voting securities" of the Special Growth
Fund as defined under the 1940 Act and, in either case, by a majority of the
Disinterested Trustees, by vote cast in person at a meeting called for such
purpose. The T. Rowe Agreement is terminable at any time, without penalty, by
vote of the Board, by KeyCorp Advisers, by the vote of "a majority of the
outstanding voting securities" of the Special Growth Fund, or by T. Rowe Price,
upon 60 days' written notice. The T. Rowe Agreement will terminate automatically
in the event of its assignment, as defined under the 1940 Act.
In the event that both the Proposed Advisory Agreement (see Proposal 2) and
the proposed T. Rowe Price Agreement are not approved by shareholders of the
Special Growth Fund, neither the Proposed Advisory Agreement nor the proposed T.
Rowe Price Agreement will be implemented, and the Current Advisory Agreement
with Society and the current T. Rowe Price sub-advisory agreement will remain in
effect.
COMPARISON OF T. ROWE AGREEMENT AND CURRENT SUB-ADVISORY
AGREEMENT
The T. Rowe Agreement between KeyCorp Advisers and T. Rowe Price and the
current sub-advisory agreement between Society and T. Rowe Price are similar.
The obligations of the parties, the rights and responsibilities of T. Rowe
Price, the portfolio managers and the fees are the same in each agreement.
The agreements differ in that many of the supplemental provisions and
clarifications which have been added to the Proposed Advisory Agreement are also
included in the T. Rowe Agreement. For example, the T. Rowe Agreement provides
clarification concerning the allocation of brokerage services and "soft
dollars." In addition, the T. Rowe Agreement contains representations and
warranties by T. Rowe Price concerning its corporate structure and state and
federal registration as an investment adviser.
The current sub-advisory agreement was approved by shareholders at a
meeting held for such purpose (and also pertaining to certain proposed changes
to investment objectives and restrictions of the Special Growth Fund) called for
May 19, 1995. The current sub-advisory agreement was executed as of June 5,
1995.
INFORMATION ABOUT T. ROWE PRICE
T. Rowe Price, which maintains its principal office at 100 East Pratt
Street, Baltimore, Maryland 21202, was founded in 1937 by the late Thomas Rowe
Price, Jr. As of September 30, 1995, the firm and its affiliates managed over
$65 billion for over 3 million individual and institutional investor accounts.
T. Rowe Price acts as the investment adviser to several mutual funds with
investment objectives similar to those of the Special Growth Fund (collectively,
the "Price Funds"). For the Price Funds, T. Rowe Price receives a fee ("Fee")
which consists of two components: a Group Management Fee ("Group Fee") and an
31
<PAGE> 36
Individual Fund Fee ("Fund Fee"). The Fee is paid monthly to T. Rowe Price on
the first business date of the next succeeding calendar month and is calculated
as described below.
The monthly Group Fee ("Monthly Group Fee") is the sum of the daily Group
Fee accruals ("Daily Group Fee Accruals") for each month. The Daily Group Fee
Accrual for any particular day is computed by multiplying the Price Funds' group
fee accrual as determined below ("Daily Price Funds' Group Fee Accrual") by the
ratio of the fund's net assets for that day to the sum of the aggregate net
assets of the Price Funds for that day. The Daily Price Funds' Group Fee Accrual
for any particular day is calculated by multiplying the fraction of one (1) over
the number of calendar days in the year by the annualized Daily Price Funds'
Group Fee Accrual for that day as determined in accordance with the following
schedule:
PRICE FUNDS'
ANNUAL GROUP BASE FEE
RATE FOR EACH LEVEL OF ASSETS
<TABLE>
<S> <C>
0.480% First $1 billion
0.450% Next $1 billion
0.420% Next $1 billion
0.390% Next $1 billion
0.370% Next $1 billion
0.360% Next $2 billion
0.350% Next $2 billion
0.340% Next $5 billion
0.330% Next $10 billion
0.320% Next $10 billion
0.310% Thereafter
</TABLE>
For the purpose of calculating the Group Fee, the Price Funds include all
the mutual funds distributed by T. Rowe Price Investment Services, Inc.
(excluding T. Rowe Price Spectrum Fund, Inc. and any institutional or private
label mutual funds). For the purpose of calculating the Daily Price Funds' Group
Fee Accrual for any particular day, the net assets of each Price Fund are
determined in accordance with the fund's prospectus as of the close of business
on the previous business day on which the fund was open for business. Based on
combined Price Funds' assets of approximately $36 billion at December 31, 1994,
the Group Fee was 0.34%.
The monthly Fund Fee ("Monthly Fund Fee") is the sum of the daily Fund Fee
accruals ("Daily Fund Fee Accruals") for each month. The Daily Fund Fee Accrual
for any particular day is computed by multiplying the fraction of one (1) over
the number of calendar days in the year by the individual Fund Fee rate and
multiplying this product by the net assets of the fund for that day, as
determined in accordance with the fund's prospectus as of the close of business
on the previous business day on which the fund was open for business. The rate
of the individual Fund Fees for each such fund with an investment objective
similar to that of the Victory Special Growth Fund is listed in the chart below,
which also sets forth the total management fees, if any, paid to T. Rowe Price
by each such fund, during 1994:
<TABLE>
<CAPTION>
TOTAL
INDIVIDUAL MANAGEMENT
PRICE FUND FUND FEES FEES
------------------------------------------------------------- --------- -----------
<S> <C> <C>
New Horizons Fund............................................ 0.35% $11,402,554
OTC Fund..................................................... 0.45% $ 1,534,235
Science and Technology Fund.................................. 0.35% $ 4,467,208
Small-Cap Value Fund......................................... 0.35% $ 3,047,508
Mid-Cap Growth Fund.......................................... 0.35% $ 544,984
</TABLE>
32
<PAGE> 37
The following chart sets forth certain expense ratio limitations and the
periods for which they are effective. For each, T. Rowe Price has agreed to bear
any fund expenses which would cause the fund's ratio of expenses to average net
assets to exceed the indicated percentage limitations. The expenses borne by T.
Rowe Price are subject to reimbursement by the fund through the indicated
reimbursement date, provided no reimbursement will be made if it would result in
the fund's expense ratio exceeding its applicable limitation.
<TABLE>
<CAPTION>
EXPENSE RATIO
PRICE FUND LIMITATION PERIOD LIMITATION
REIMBURSEMENT DATE
- --------------------------------------- ------------------ ------------- ------------------
<S> <C> <C> <C>
Science & Technology................... January 1, 1992- 1.25% December 31, 1995
December 31, 1993
Small-Cap Value........................ January 1, 1992- 1.25% December 31, 1995
December 31, 1993
Mid-Cap Growth......................... January 1, 1994- 1.25% December 31, 1997
December 31, 1995
</TABLE>
The management agreement of each of the above-referenced funds also
provides that one or more additional expense limitation periods (of the same or
different time periods) may be implemented after the expiration of the current
expense limitation, and that with respect to any such additional limitation
period, the fund may reimburse T. Rowe Price, provided the reimbursement does
not result in the fund's aggregate expenses exceeding the additional expense
limitation.
Pursuant to Mid-Cap Growth Fund's current expense limitation, $66,000 of
management fees were not accrued by the fund for the year ended December 31,
1994. Additionally, $228,000 of unaccrued 1992-93 management fees and expenses
related to a previous agreement are subject to reimbursement through December
31, 1995.
Listed below are the Directors of T. Rowe Price who have other substantial
businesses, professions, vocations, or employment aside from that of Director of
T. Rowe Price:
James E. Halbkat, Jr., President of U.S. Monitor Corporation, a provider
of public response systems. Mr. Halbkat's address is P.O. Box 23109,
Hilton Head Island, South Carolina 29925.
John W. Rosenblum, Tayloe Murphy Professor at the University of
Virginia, and a Director of: Chesapeake Corporation, a manufacturer of
paper products, Camdus Communications Corp., a provider of printing and
communication services, Comdial Corporation, a manufacturer of telephone
systems for businesses, and Cone Mills Corporation, a textiles producer.
Mr. Rosenblum's address is P.O. Box 6550, Charlottesville, Virginia
22906.
Robert L. Strickland, Chairman of Loew's Companies, Inc., a retailer of
specialty home supplies, and a Director of Hannaford Bros. Co., a food
retailer. Mr. Strickland's address is 604 Two Piedmont Plaza Building,
Winston-Salem, North Carolina 27104.
Philip C. Walsh, Consultant to Cyprus Amax Minerals Company, Englewood,
Colorado, and a Director of Piedmont Mining Company, Inc., Charlotte,
North Carolina. Mr. Walsh's address is 200 East 66th Street, Apt.
A-1005, New York, New York 10021.
With the exception of Messrs. Halbkat, Rosenblum, Strickland, and Walsh
(listed above), all Directors of T. Rowe Price are employees of T. Rowe Price.
Listed below are the additional Directors and the principal executive officer of
T. Rowe Price:
James S. Riepe, Thomas H. Broadus, Carter O. Hoffman, George A. Roche,
M. David Testa and Henry H. Hopkins -- Directors of T. Rowe Price.
George J. Collins, Chief Executive Officer and President of T. Rowe
Price.
The address of each of the above individuals is 100 East Pratt Street,
Baltimore, Maryland 21202.
FOR THE REASONS SET FORTH ABOVE, THE COMPANY'S BOARD OF TRUSTEES
RECOMMENDS
THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF THE T. ROWE
AGREEMENT BETWEEN
KEYCORP ADVISERS AND T. ROWE PRICE.
33
<PAGE> 38
PROPOSAL 7
APPROVAL OR DISAPPROVAL OF A CHANGE OF THE
MAXIMUM REMAINING MATURITY OF PORTFOLIO
INSTRUMENTS TO CONFORM WITH THE MATURITY
PERMITTED UNDER RULE 2A-7 UNDER THE 1940 ACT
This Proposal relates only to the Prime Obligations, Tax-Free and U.S.
Government Money Market Funds.
Rule 2a-7 under the 1940 Act (the "Rule") provides that various
requirements, which are set forth under the Rule, must be satisfied in order for
a fund to hold itself out as a "money market fund." The Board has made a good
faith determination that it is in the best interests of the Institutional Money
Market, Prime Obligations and Tax-Free Money Market Funds (referred to, in this
proposal only, as the "Funds") and their shareholders for such Funds to maintain
a stable net asset value per share and hold themselves out as "money market
funds." In order to do so presently, these Funds comply with the requirements of
the Rule.
The Rule contains certain requirements governing the portfolio securities
of the Funds, including, among other things, requirements as to the maturity of
each portfolio security, the dollar-weighted average maturity of the entire
portfolio, and the credit quality of the portfolio securities. With respect to
the requirements for the remaining maturity of each "eligible security," the
Rule was amended to permit money market funds to purchase and hold instruments
with a remaining maturity of up to 397 days (the "Amendment"). Previously, the
Rule had permitted only a remaining maturity of up to 13 months.
It could be deemed that the Funds are subject to a fundamental investment
policy which integrates the requirements of the Rule as to the maturity of each
security prior to the Amendment. Based on the recommendation of Society, the
Trustees have determined that it would be in the best interests of the Funds and
their shareholders for the Funds to have the ability to utilize the less
restrictive standards as to the maturity of portfolio securities which are set
forth in the Amendment, and is therefore requesting that shareholders of each of
the Funds authorize this change as to their Fund. If this Proposal is approved
by shareholders of a Fund, that Fund would be able to purchase and hold
securities with a remaining maturity of up to 397 days, rather than 13 months.
REASONS FOR THE PROPOSED CHANGE: The proposed amendment is consistent with
the current Rule and would only provide a 1 day difference in the maximum
remaining maturity. At certain times, it may be advantageous for the Fund to be
able to purchase instruments with a slightly longer remaining maturity, since
even a difference of only 1 day could result in additional flexibility for the
Funds.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF TRUSTEES
RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF THE CHANGE OF THE MAXIMUM
REMAINING MATURITY
OF PORTFOLIO INSTRUMENTS OF THE PRIME OBLIGATIONS, U.S. GOVERNMENT
AND TAX-FREE
MONEY MARKET FUNDS.
PROPOSAL 8
APPROVAL OR DISAPPROVAL OF A
RESTATEMENT OF THE INVESTMENT OBJECTIVES
This Proposal relates only to the Modernizing Funds:
At a meeting of the Board held on September 20, 1995, the Trustees,
including each of the Disinterested Trustees (who are not "interested persons,"
within the meaning of the 1940 Act, of the Company or any Fund's investment
adviser), on the recommendation of Society, considered and unanimously approved
of a restatement of the investment objective of certain of Modernizing Funds and
certain changes to certain Funds' fundamental investment policies and
restrictions (see Proposal 9).
Society has evaluated the various types of Funds that comprise the Company
and recommended to the Trustees that it would be appropriate to modernize the
investment objectives, policies and restrictions, and implement certain changes
that would provide greater flexibility and uniformity in managing the Funds. The
34
<PAGE> 39
Trustees determined that many of the Funds' investment objectives should be
restated so as to be less restrictive.
In addition, the Trustees, based on representations from Society, the
Funds' investment adviser, believe that the risks inherent in investing in each
of the respective Funds should not change from those inherent at the present
time under each Fund's current investment objective and policies, since Society
has represented that none of the proposed changes is intended or anticipated to
have an immediate impact on the day to day investment program utilized by a
Fund.
The significance of an investment policy or restriction being fundamental
is that it may be changed only with the approval of shareholders. Except for
each Fund's investment objective and any investment policies or restrictions
which are specifically identified as fundamental, each Fund's investment
policies and restrictions are non-fundamental.
In the table below, the current investment objective of each Fund is set
forth in quotations in the left hand column. In each case, it is proposed that
the investment objective be restated to read as indicated in quotations in the
right hand column. In many cases, it is proposed that certain investment
policies now included within the investment objective (and which are therefore
currently fundamental) be reclassified as non-fundamental investment policies.
In each such case, the proposed non-fundamental policies and the reason for the
proposed change, if any, are indicated in the right hand column. A description
of each of these reasons is set forth below following the table. To the extent
that certain investment styles or policies which are currently included in the
investment objective are removed from the investment objective and made non-
fundamental policies, they may be changed thereafter without the approval of
shareholders.
<TABLE>
<CAPTION>
CURRENT INVESTMENT OBJECTIVE PROPOSED INVESTMENT
OBJECTIVE
<S> <C>
BALANCED FUND
"To balance both current income and long-term "To seek to provide income and long-term
growth of capital by investing primarily in growth of capital."
common stocks and fixed income securities. As a non-fundamental policy, the Fund will
The Fund may invest in any type or class of invest primarily in common stocks and fixed
security." income securities.
Reason for the proposal: flexibility.
DIVERSIFIED STOCK FUND
"To seek long-term growth of capital by "To seek to provide long-term growth of
investing in a diversified portfolio of capital."
common stocks and securities convertible into As a non-fundamental policy, the Fund will
common stocks (i.e., warrants, convertible invest primarily in common stocks and
preferred stock, fixed- rate preferred stock, securities convertible into common stocks
convertible fixed income securities, options (i.e., warrants, convertible preferred
and rights) issued by established domestic stock, fixed-rate preferred stock,
and foreign companies in a variety of convertible preferred stock, convertible
industries which Society Asset Management, fixed income securities, options and rights)
Inc. believes represent investment value issued by established domestic and foreign
because their market prices do not reflect companies which the Fund's investment
their earnings performance or because Society adviser believes represent investment value
Asset Management, Inc. believes they are because their market prices do not reflect
selling below historical price relationships their earnings performance or because the
and/or underlying asset values." Fund's investment adviser believes they are
selling below historical price relationships
and/or underlying asset values.
Reason for the proposal: flexibility.
</TABLE>
35
<PAGE> 40
<TABLE>
<CAPTION>
CURRENT INVESTMENT OBJECTIVE PROPOSED INVESTMENT
OBJECTIVE
<S> <C>
GOVERNMENT MORTGAGE FUND
"To provide a high level of current income "To seek to provide a high level of current
and safety of principal by investing income consistent with safety of principal."
exclusively in obligations issued or As a non-fundamental policy, the Fund will
guaranteed by the U.S. Government or its invest exclusively in obligations issued or
agencies or instrumentalities." guaranteed by the U.S. Government or its
agencies or instrumentalities.
Reason for the proposal: flexibility
GROWTH FUND
"To seek long-term growth of capital by "To seek to provide long-term growth of
investing primarily in a diversified group capital."
of common stocks of issuers listed on a As a non-fundamental policy, the Fund will
nationally recognized exchange with an invest primarily in common stocks of issuers
emphasis on companies with superior prospects listed on a nationally recognized exchange
for long-term earnings growth and price with an emphasis on companies with superior
appreciation." prospects for long-term earnings growth and
price appreciation.
Reasons for the proposal: flexibility,
clarification/ standardization.
INTERMEDIATE INCOME FUND
"To provide a high level of income by "To seek to provide a high level of income."
investing in debt securities issued by As a non-fundamental policy, the Fund will
corporations and the U.S. Government and its invest in debt securities issued by
agencies or instrumentalities." corporations and the U.S. Government and its
agencies and instrumentalities.
Reason for the proposal: flexibility.
INTERNATIONAL GROWTH FUND
"To provide capital growth consistent with "To seek to provide capital growth
reasonable investment risk by investing consistent with reasonable investment risk."
principally in foreign equity securities, As a non-fundamental policy, the Fund will
most of which will be denominated in foreign invest primarily in equity securities of
currencies." foreign corporations, most of which will be
denominated in foreign currencies.
Reasons for the proposal: clarification/
standardization, flexibility.
INVESTMENT QUALITY BOND FUND
"To seek a high level of income by investing "To seek to provide a high level of income."
primarily in investment-grade bonds issued by As a non-fundamental policy, the Fund will
corporations and the U.S. Government and its invest primarily in investment-grade bonds
agencies or instrumentalities." issued by corporations and the U.S.
Government and its agencies or
instrumentalities.
Reason for the proposal: flexibility
LIMITED TERM INCOME FUND
"To seek current income as well as stability "To seek to provide income consistent with
of principal by investing in high grade, limited fluctuation of principal."
fixed income securities with a As a non-fundamental policy, the Fund will
dollar-weighted average maturity of between invest in high grade, fixed income
two and five years, based upon remaining securities with a dollar- weighted average
maturities." maturity of one to five years, based upon
remaining maturities.
Reason for the proposal: flexibility.
</TABLE>
36
<PAGE> 41
<TABLE>
<CAPTION>
CURRENT INVESTMENT OBJECTIVE PROPOSED INVESTMENT
OBJECTIVE
<S> <C>
OHIO MUNICIPAL BOND FUND
"To produce a high level of current interest No change is proposed.
income which is exempt from both federal
income tax and Ohio personal income tax."
OHIO REGIONAL STOCK FUND
"To seek capital appreciation by investing in "To seek to provide capital appreciation."
a diversified group of common stocks and As a non-fundamental policy, the Fund will
securities convertible into common stocks invest primarily in common stocks and
issued by companies whose headquarters are securities convertible into common stocks
located in the State of Ohio." issued by companies whose headquarters are
located in the State of Ohio.
Reason for the proposal: flexibility.
PRIME OBLIGATIONS FUND
"To provide current income with liquidity and "To seek to provide current income
stability of principal." consistent with liquidity and stability of
principal."
Reason for the proposal: clarification/
standardization.
SPECIAL VALUE FUND
"To seek long-term growth of capital and "To seek to provide long-term growth of
dividend income by investing primarily in capital and dividend income."
common stocks of small and medium-size As a non-fundamental policy, the Fund will
companies listed on a nationally recognized invest primarily in common stocks of small
exchange with an emphasis on companies with and medium- size companies listed on a
above average total return potential." nationally recognized exchange with an
emphasis on companies with above average
total return potential.
Reasons for the proposal: clarification/
standardization, flexibility.
STOCK INDEX FUND
"To seek to match the investment performance "To seek to provide long-term capital
of the Standard & Poor's 500 Composite appreciation by attempting to match the
Stock Index (the "S&P 500 Index" or the investment performance of the Standard &
"Index")". Poor's 500 Composite Stock Index (the "S&P
500 Index" or the "Index")."
Reason for the proposal: clarification/
standardization.
TAX-FREE MONEY MARKET FUND
"To provide current interest income free from "To seek to provide current interest income
federal income taxes consistent with relative free from federal income taxes consistent
stability of principal." with relative liquidity and stability of
principal."
Reason for the proposal: clarification/
standardization.
</TABLE>
37
<PAGE> 42
<TABLE>
<CAPTION>
CURRENT INVESTMENT OBJECTIVE PROPOSED INVESTMENT
OBJECTIVE
<S> <C>
U.S. GOVERNMENT OBLIGATIONS
"To provide current income with liquidity and "To seek to provide current income
stability of principal." consistent with liquidity and stability of
principal."
Reason for the proposal: clarification/
standardization.
VALUE FUND
"To seek long-term growth of capital and "To seek to provide long-term growth of
dividend income by investing primarily in a capital and dividend income."
diversified group of common stocks with an As a non-fundamental policy, the Fund will
emphasis on companies with above average invest primarily in a diversified group of
total return potential." common stocks with an emphasis on companies
with above average total return potential.
Reasons for the proposal: clarification/
standardization, flexibility.
</TABLE>
REASONS FOR THE PROPOSALS REGARDING THE INVESTMENT OBJECTIVES
IT IS IMPORTANT TO BEAR IN MIND THAT THE PROPOSED CHANGES TO THE
FUNDS'
INVESTMENT OBJECTIVES INVOLVE A JUDGMENT ONLY AS TO WHAT SHOULD
MAKE UP A FUND'S
FUNDAMENTAL INVESTMENT OBJECTIVE, NOT A JUDGMENT AS TO WHAT
INVESTMENT
STRATEGIES, POLICIES OR RESTRICTIONS SHOULD BE FOLLOWED IN PURSUING
THAT
OBJECTIVE. IF SHAREHOLDERS APPROVE THIS PROPOSAL, SOCIETY BELIEVES
THAT THE
CHANGES WILL HAVE NO IMMEDIATE MATERIAL EFFECT ON THE WAY IN WHICH
THE FUNDS ARE
MANAGED. CERTAIN PROPOSED CHANGES TO CERTAIN FUNDS' INVESTMENT
POLICIES AND
RESTRICTIONS ARE SET FORTH IN PROPOSALS 9A-P, BELOW.
The reasons for the proposals set forth above, pertaining to the respective
investment objectives of the Funds, involve similar considerations. The Trustees
have reviewed the proposed changes and believe that they are in the best
interests of each Fund and its shareholders for the reason(s) indicated above,
and described in greater detail below. Each of the proposals has been made for
one or more of the following reasons: flexibility or
clarification/standardization. The following discussion provides greater detail
as to what is meant, in each case, by flexibility or
clarification/standardization.
Flexibility. Under the Company's registration statement, the investment
objective of each Fund is fundamental and cannot be changed without a vote of
the "majority of the outstanding voting securities" of the relevant Fund. If a
Fund's stated investment objective contains details as to an investment strategy
to be pursued or an investment policy to be followed, or is otherwise more
restrictive than necessary, it may impose an unnecessarily rigid restraint on
management's ability to respond to certain regulatory developments or changes in
the financial markets. In order to make any changes to a strategy or policy
included as part of a Fund's investment objective, the Fund would need
shareholder approval, which is time consuming and costly to the Fund and its
shareholders. In each case, the Fund's most basic investment objective (such as
to achieve capital appreciation or to achieve a high level of income) will not
change and will continue to be fundamental, but certain strategies or policies
which need not be part of the Fund's stated investment objective have been made
non-fundamental so that the Trustees may at a future date receive and act upon
recommendations of Society (or KeyCorp Advisers) to change these non-fundamental
policies without the necessity of a meeting of shareholders and associated
costs. In all cases described in the proposals above, Society does not
anticipate that the changes will have an immediate effect on the Fund's
investment strategy, since there is no current intention of changing stated
strategy or policy. However, the Funds will have greater flexibility to respond
to future regulatory and market developments. If changes to non-fundamental
policies or restrictions are adopted by the Trustees in the future, the relevant
Fund's Prospectus and Statement of Additional Information will be amended to
reflect any such changes and notice thereof will be provided to shareholders.
Clarification/standardization. Some of the Funds' investment objectives
contain descriptive terms that are superfluous or ambiguous. Accordingly,
Society has recommended to the Trustees, and the Trustees have
38
<PAGE> 43
approved, that these Funds change the description of their investment
objectives, where appropriate, to eliminate any ambiguities. In addition, the
terms used in some of the Fund's investment objectives differ from the
description of the terms used in the stated investment objective of a similar
Fund. Society has recommended, and the Trustees have approved, the
standardization, to the extent possible, of the description of an investment
objective, or an aspect thereof, as between Funds for which the investment
objective or aspect thereof is not intended to differ. By doing so, potential
investors may be expected to have a clearer understanding of the similarities or
differences in the investment objectives of the respective Funds.
RISK FACTORS: Because each of the Proposals involves only a change to the
stated investment objective and is not expected to alter the primary
characteristics of a Fund or its operations for the foreseeable future, for each
Fund, the adoption of the Proposal is not expected to have any effect on the
risk factors to be considered in making or continuing an investment in the Fund.
In the future, however, the Board may, without shareholder approval, change a
nonfundamental investment policy or restriction in a way that may create more
risk. The Fund will notify shareholders of such changes. In addition, there is
no assurance that any Fund will achieve its investment objective, and the share
price and total return of each Fund other than the Tax-Free Money Market,
Financial Reserves, Institutional Money Market, Ohio Municipal Money Market, and
Prime Obligations Funds (the "Money Market Funds") will fluctuate, so that an
investment may be worth more or less than its original cost upon redemption.
With respect to the Money Market Funds, although the Funds seek to maintain a
stable net asset value per share, there can be no guaranty that they in fact
will be able to do so, so that an investment may be worth more or less than its
original cost upon redemption.
PROPOSALS 9A-P
APPROVAL OR DISAPPROVAL OF CERTAIN CHANGES TO
THE FUNDAMENTAL INVESTMENT POLICIES
OF THE FUNDS
INTRODUCTION TO PROPOSALS 9A-P
Proposals 9a-p concern proposed changes to the current fundamental
investment policies and restrictions ("Restrictions") of the Funds. Each of
these Proposals relate to Restrictions of a Fund which are presently classified
as "fundamental," which means that they can only be changed by a vote of the
relevant Fund's shareholders. Investment restrictions classified as
"nonfundamental" may be changed or eliminated without shareholder approval.
Society recommended to the Trustees that it be authorized to analyze each
Fund's current Restrictions and, where practical and appropriate for each Fund's
current and proposed investment objective, recommend to the Trustees whether,
subject to shareholder approval, certain changes should be adopted. Based on
Society's review and recommendations, the Trustees believe that certain changes
should be implemented for each Fund. These changes fall within the following
categories:
Modification. The Proposal involves a modification of certain
Restrictions, for reasons outlined below.
Elimination. The Proposal involves an elimination of certain Restrictions,
for reasons outlined below.
Reclassification. The Proposal involves a reclassification of certain
Restrictions as nonfundamental restrictions, which could thereafter be changed
with the approval of the Company's Board of Trustees, without a shareholder
vote.
Based on the recommendations of Society, the Trustees have approved the
proposed changes and believe that they are in the best interests of the Funds
and their shareholders for the following reasons:
Standardization. Some of the Funds' Restrictions differ in form and
substance from similar restrictions of other Funds. Increased standardization in
Restrictions among all Victory mutual funds will help promote operational
efficiencies and facilitate the monitoring of portfolio compliance.
Standardization may also involve making policies or restrictions consistent with
the terms of SEC exemptive relief obtained on behalf of the
39
<PAGE> 44
Funds. In all cases, the adoption of the new or revised restriction is not
likely to have any impact on the investment techniques employed by a Fund at
this time.
Modernization. The Funds' Restrictions have been in effect, without
changes, for many years. The Trustees, acting on Society's recommendation,
recommend that certain Funds modernize their Restrictions to conform to current
regulation and authorize the use of currently available financial instruments
and investment techniques.
Clarification. Some of the Funds' Restrictions contain ambiguities that,
if interpreted in a narrow way, might prevent the Fund from following the
original intent of the Restriction. Accordingly, the Trustees, acting on
Society's recommendation, recommend that the Fund change the Restriction, where
appropriate, to eliminate any ambiguities. Some of these proposals include the
proposed division of a Restriction which currently covers multiple topics into
two or more distinct restrictions.
Flexibility. Several of the Funds' Restrictions may be changed to allow
the Funds to respond to recent and future regulatory developments and changes in
the financial markets. In addition, Restrictions prohibiting certain
transactions have been or may be changed or eliminated by a federal or state
securities regulator. In order to take advantage of such changes, the Funds
would need shareholder approval, which is time consuming and costly to the Fund
and its shareholders. Society believes that in most cases, the proposed changes
are not likely to have any immediate effect on the Funds' investment strategy,
since the Funds may not have a current intention of changing the Restriction.
However, in order to give the Fund more flexibility in responding to regulatory
and market developments, the Trustees, acting on Society's recommendations,
recommend changing, reclassifying or eliminating some of the Restrictions
described below so that they can be changed by the Trustees without a
shareholder vote. In the future, when changes to nonfundamental policies or
restrictions of a Fund are adopted, the Fund's prospectus and statement of
additional information will be amended to reflect the changes and shareholders
will be notified thereof.
The Proposals regarding the Restrictions are presented in the Proposals
9a-p, below, categorized by topic (e.g., diversification, concentration, etc.).
These Proposals relate only to the Modernizing Funds, as the other Funds'
investment policies and restrictions have recently been updated and amended. In
each case, the current Restriction is set forth in the left hand column under
"Current" and, for the Fund(s) to which the current Restriction applies, it is
proposed that the Restriction be restated, eliminated, reclassified, or
otherwise changed as indicated in the right hand column under "Proposed." In
each case, the reason for, and an explanation of, the proposed change, is set
forth below the comparison.
40
<PAGE> 45
INTRODUCTION TO PROPOSALS 9A-E.
Proposals 9a-e each apply to each one of the respective Modernizing Funds:
PROPOSAL 9A
AMENDMENT TO EACH FUND'S FUNDAMENTAL INVESTMENT
RESTRICTIONS CONCERNING BORROWING AND SENIOR SECURITIES
<TABLE>
<S> <C>
CURRENT: PROPOSED:
No Fund may borrow money or issue senior FUNDAMENTAL RESTRICTION --
securities, except that each Fund may borrow SENIOR SECURITIES
from banks or enter into reverse repurchase No Fund may issue any senior security (as
agreements for temporary purposes in amounts defined in the 1940 Act), except that (a)
up to 10% of the value of its total assets at each Fund may engage in transactions that
the time of such borrowing; or mortgage, may result in the issuance of senior
pledge, or hypothecate any assets, except in securities to the extent permitted under
connection with any such borrowing and in applicable regulations and interpretations
amounts not in excess of the lesser of the of the 1940 Act or an exemptive order; (b)
dollar amounts borrowed or 10% of the value each Fund may acquire other securities, the
of the Fund's total assets at the time of its acquisition of which may result in the
borrowing. No Fund will purchase securities issuance of a senior security, to the extent
while its borrowings (including reverse permitted under applicable regulations or
repurchase agreements) exceed 5% of the total interpretations of the 1940 Act; (c) subject
assets of that Fund. to the restrictions set forth below, each
Fund may borrow money as authorized under
the 1940 Act.
FUNDAMENTAL RESTRICTION -- BORROWING
No fund may borrow money, except that (a)
each Fund may enter into commitments to
purchase securities in accordance with its
investment program, including
delayed-delivery and when-issued securities
and reverse repurchase agreements, provided
that the total amount of any such borrowing
does not exceed 33 1/3% of the Fund's total
assets; and (b) each Fund may borrow money
for temporary or emergency purposes in an
amount not exceeding 5% of the value of its
total assets at the time when the loan is
made. Any borrowings representing more than
5% of a Fund's total assets must be repaid
before the Fund may make additional
investments.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGES:
SENIOR SECURITIES: Under the 1940 Act, an open-end investment company
(such as the Company) cannot issue senior securities except under certain very
limited conditions. The proposed amendment clarifies and modernizes the language
concerning senior securities to conform to provisions of the 1940 Act. It is
proposed that this restriction exclude those transactions which are allowed by
current regulatory interpretations and policies, and which are consistent with
current investment marketplace practices. Therefore, the proposed fundamental
restrictions will allow, for example, the following investments even though they
may result in the issuance of senior securities: the Funds could, to the extent
permitted by applicable law or exemptive order (a) enter into commitments,
including reverse repurchase agreements and delayed-delivery and when-issued
securities; (b) engage in transactions that may result in the issuance of a
senior security;
41
<PAGE> 46
(c) engage in short sales of securities; (d) purchase and sell futures contracts
and related options; (e) borrow money, subject to any other applicable
restrictions described below; and (f) issue multiple classes of securities.
BORROWING: The proposed amendment clarifies and modernizes the restriction
on borrowing by treating borrowings for temporary or emergency purposes
separately from other borrowings. Borrowing for emergency purposes may be
necessary to address excessive or unanticipated liquidations of Fund shares that
exceed available cash. To increase flexibility, reverse repurchase agreements
would be allowable outside the context of borrowings implemented for temporary
purposes, and would be subject to a limitation of 33 1/3% (rather than 10%) of a
Fund's assets. Leveraging by means of borrowing would exaggerate the effect of
any increase or decrease in the value of portfolio securities on a Fund's net
asset value; however, the Funds do not presently intend to borrow for purposes
of leverage. Money borrowed will be subject to interest and other costs.
PROPOSAL 9B
ELIMINATION OF EACH FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION CONCERNING INVESTMENT
FOR THE PURPOSE OF EXERCISING CONTROL
<TABLE>
<S> <C>
CURRENT: PROPOSED:
No Fund may invest in any issuer for the Except as provided below under PROPOSAL 9F,
purposes of exercising control or this Restriction would be eliminated.
management or invest more than 10% of its
assets in the voting securities of any one
issuer.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGES: The Funds have no current intention
of investing in any issuer for the purpose of exercising control. In the event
that at some point in time a Fund has an intention of investing for the purpose
of exercising control, the Fund's Prospectus and Statement of Additional
Information will be revised accordingly. The proposed elimination of this
fundamental Restriction would give the Funds additional flexibility in taking,
or adding to, certain investment positions.
PROPOSAL 9C
AMENDMENT TO EACH FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION CONCERNING THE MAKING OF LOANS
<TABLE>
<S> <C>
CURRENT: PROPOSED:
No Fund may make loans, except that each Fund FUNDAMENTAL RESTRICTION
may purchase or hold debt instruments in No Fund may lend any security or make any
accordance with its investment objective other loan if, as a result, more than
and policies, may lend portfolio securities 33 1/3% of its total assets would be lent to
in accordance with its investment objective other parties, but this limitation does not
and policies, and may enter into repurchase apply to purchases of publicly issued debt
agreements. securities or to repurchase agreements.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: The proposed amendment is intended to
clarify the basic limitation on securities lending, and would also exclude those
transactions that current regulatory interpretations and policies allow. The
investment adviser will not make loans of a Fund's portfolio securities (or
enter into repurchase agreements) unless it receives collateral that is at least
equal to the value of the loan, including accrued interest. If the recipient of
the loan (or the seller of the instrument to be repurchased) defaults and the
value of the collateral securing the loan (or the repurchase agreement)
declines, the Fund could incur a loss.
42
<PAGE> 47
PROPOSAL 9D
AMENDMENT OF EACH FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION CONCERNING PURCHASES OF SECURITIES ON MARGIN
<TABLE>
<S> <C>
CURRENT: PROPOSED:
No Fund may purchase securities on margin NON-FUNDAMENTAL RESTRICTION
(except that the International Growth Fund No Fund will make short sales of securities,
may make margin payments in connection with other than short sales "against the box," or
transactions in currency futures contracts). purchase securities on margin except for
short-term credits necessary for clearance
of portfolio transactions, provided that
this restriction will not be applied to
limit the use of options, futures contracts
and related options, in the manner otherwise
permitted by the investment restrictions,
policies and investment program of the Fund.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE. The proposed change modernizes and
clarifies the circumstances under which a Fund may make margin purchases. The
reclassification as non-fundamental could enable the Funds to respond more
quickly to changes in financial markets.
PROPOSAL 9E
AMENDMENT TO EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING UNDERWRITING THE SECURITIES OF OTHER ISSUERS
<TABLE>
<S> <C>
CURRENT: PROPOSED:
No Fund may underwrite the securities of FUNDAMENTAL RESTRICTION
other issuers. No Fund may underwrite securities issued by
others, except to the extent that the Fund
may be considered an underwriter within the
meaning of the Securities Act of 1933 in the
disposition of restricted securities.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: The proposed fundamental restriction
is substantively the same as the current fundamental restriction, except that
there is a clarification of its application with respect to restricted
securities. Since the definition of an underwriter, under the Securities Act of
1933 (the "1933 Act"), includes "any person who has purchased from an issuer
with a view to . . . distribution" and any person who "participates . . . in any
such undertaking," it had historically been unclear whether purchasers in
certain private placements might be deemed underwriters, even though such
transactions do not involve a "public offering" and are therefore exempt from
registration. The promulgation of Rules 144 and 144A under the 1933 Act provide
the sellers of privately placed (restricted) securities with exemptions from
characterization as underwriters under certain circumstances. However, to the
extent that a Fund may sell restricted securities in a transaction which is not
covered by Rule 144 or Rule 144A, the proposed amendment would clarify that the
Fund would not be prohibited from doing so merely because it may technically be
deemed to be an underwriter as to the restricted securities involved in the
transaction.
43
<PAGE> 48
PROPOSAL 9F
AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTION
CONCERNING DIVERSIFICATION
<TABLE>
<S> <C>
CURRENT: PROPOSED:
For the Balanced, Diversified Stock, Growth, Intermediate Income, Investment Quality
Bond, Limited Term Income, Ohio Regional Stock, Special Value, Stock Index and Value
Funds:
No Fund may purchase securities of an issuer, FUNDAMENTAL RESTRICTION
other than securities issued or guaranteed With respect to 75% of a Fund's total
by the U.S. government or any of its agencies assets, the Fund may not purchase the
or instrumentalities if, immediately after securities of any issuer (other than
such purchase, more than 5% of the value of securities issued or guaranteed by the U.S.
the Fund's total assets would be invested in government or any of its agencies or instru-
such issuer, except that up to 25% of the mentalities) if, as a result, (a) more than
Fund's assets may be invested without regard 5% of the Fund's total assets would be
to such 5% limitation. invested in the securities of that issuer,
or (b) the Fund would hold more than 10% of
the outstanding voting securities of that
issuer.
For the Prime Obligations Fund:
The Fund will not purchase securities of any FUNDAMENTAL RESTRICTION
one issuer, other than obligations issued With respect to 75% of a Fund's total
or guaranteed by the U.S. Government or its assets, the Fund may not purchase the
agencies or instrumentalities, if, securities of any issuer (other than
immediately after such purchase, more than 5% securities issued or guaranteed by the U.S.
of the value of the Fund's total assets would government or any of its agencies or instru-
be invested in such issuer, except that 25% mentalities) if, as a result, (a) more than
or less of the value of the Fund's total 5% of the Fund's total assets would be
assets may be invested without regard to such invested in the securities of that issuer,
5% limitation. The Fund will not purchase or (b) the Fund would hold more than 10% of
more than 10% of the outstanding voting the outstanding voting securities of that
securities of any one issuer. There is no issuer.
limit to the percentage of assets that may be However, as a money market fund, this Fund
invested in U.S. Treasury bills, notes, or is currently subject to provisions of Rule
other obligations issued or guaranteed by the 2a-7 under the 1940 Act which generally
U.S. Government or its agencies or limit investments in the securities of any
instrumentalities. issuer to 5% of the Fund's total assets.
For the International Growth Fund:
The Fund will not purchase securities of any FUNDAMENTAL RESTRICTION
one issuer if, immediately after such With respect to 75% of a Fund's total
purchase, (a) more than 5% of the value of assets, the Fund may not purchase the
the Fund's total assets would be invested in securities of any issuer (other than
such issuer, or (b) the Fund would hold more securities issued or guaranteed by the U.S.
than 10% of the outstanding voting securities government or any of its agencies or instru-
of the issuer, except that up to 25% of the mentalities) if, as a result, (a) more than
value of the Fund's total assets may be 5% of the Fund's total assets would be
invested without regard to such limitations. invested in the securities of that issuer,
There is no limit to the percentage of assets or (b) the Fund would hold more than 10% of
that may be invested in U.S. Treasury bills, the outstanding voting securities of that
notes, or other obligations issued or issuer.
guaranteed by the U.S. Government or its
agencies or instrumentalities.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: The proposed amendment would clarify,
for these Funds, that the Restriction involving a 10% limitation on investments
in any issuer is a limitation based upon the outstanding voting securities of
the issuer and would not be applicable outside the diversification requirements
which are
44
<PAGE> 49
applicable only to 75% of a Fund's assets. This restatement of the Restriction
would clarify and help standardize the Restriction and provide additional
flexibility for the investment of the Fund's assets.
PROPOSAL 9G
AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTION
CONCERNING CONCENTRATION OF INVESTMENT
<TABLE>
<CAPTION>
CURRENT: PROPOSED:
<S> <C>
For the Balanced, Diversified Stock, Growth, Intermediate Income, Investment Quality
Bond, Limited Term Income, Ohio Regional Stock, Special Value, Stock Index and Value
Funds:
No Fund may purchase any security which would FUNDAMENTAL RESTRICTION
cause 25% or more of the Fund's total assets, No Fund may purchase the securities of any
at the time of purchase, to be invested in issuer (other than securities issued or
the securities of one or more issuers guaranteed by the U.S. Government or any of
conducting their principal business its agencies or instrumentalities, or
activities in the same industry. repurchase agreements secured thereby) if,
as a result, more than 25% of the Fund's
total assets would be invested in the
securities of companies whose principal
business activities are in the same
industry. In the utilities category, the
industry shall be determined according to
the service provided. For example, gas,
electric, water and telephone will be
considered as separate industries.
For the International Growth Fund:
The Fund may not purchase any securities FUNDAMENTAL RESTRICTION
which would cause 25% or more of the value No Fund may purchase the securities of any
of the Fund's total assets, at the time of issuer (other than securities issued or
purchase, to be invested in securities of one guaranteed by the U.S. Government or any of
or more issuers conducting their principal its agencies or instrumentalities, or
business activities in the same industry; repurchase agreements secured thereby) if,
provided that there is no limitation with as a result, more than 25% of the Fund's
respect to obligations issued or guaranteed total assets would be invested in the
by the U.S. Government or its agencies or securities of companies whose principal
instrumentalities and repurchase agreements business activities are in the same
secured by obligations of the U.S. Government industry. In the utilities category, the
or its agencies or instrumentalities. industry shall be determined according to
the service provided. For example, gas,
electric, water and telephone will be
considered as separate industries.
</TABLE>
45
<PAGE> 50
<TABLE>
<CAPTION>
CURRENT: PROPOSED:
<S> <C>
For the Prime Obligations Fund:
The Fund may not purchase any securities FUNDAMENTAL RESTRICTION
which would cause 25% or more of the value No Fund may purchase the securities of any
of the Fund's total assets, at the time of issuer (other than securities issued or
purchase, to be invested in securities of one guaranteed by the U.S. government or any of
or more issuers conducting their principal its agencies or instrumentalities, or
business activities in the same industry; repurchase agreements secured thereby) if,
provided that (a) there is no limitation with as a result, more than 25% of the Fund's
respect to obligations issued or guaranteed total assets would be invested in the
by the U.S. Government or its agencies or securities of companies whose principal
instrumentalities, domestic bank certificates business activities are in the same
of deposit or bankers' acceptances, and industry. Notwithstanding the foregoing,
repurchase agreements secured by bank there is no limitation with respect to
instruments or obligations of the U.S. certificates of deposit and bankers'
Government or its agencies or acceptances issued by domestic banks, or
instrumentalities; (b) wholly owned finance repurchase agreements secured thereby. In
companies will be considered to be in the the utilities category, the industry shall
industries of their parents if their be determined according to the service
activities are primarily related to financing provided. For example, gas, electric, water
the activities of their parents; and (c) and telephone will be considered as separate
utilities will be divided according to their industries.
services. For example, gas, gas transmission,
electric and gas, electric, and telephone
will each be considered a separate industry.
For the Tax-Free Money Market Fund:
The Fund may not purchase any securities FUNDAMENTAL RESTRICTION
which would cause 25% or more of the value No Fund may purchase the securities of any
of the Fund's total assets, at the time of issuer (other than securities issued or
purchase, to be invested in securities of one guaranteed by the U.S. government or any of
or more issuers conducting their principal its agencies or instrumentalities, or
business activities in the same industry; repurchase agreements secured thereby) if,
provided that this limitation shall not apply as a result, more than 25% of the Fund's
to Municipal Securities or governmental total assets would be invested in the
guarantees of Municipal Securities; and securities of companies whose principal
provided, further, that for the purpose of business activities are in the same
this limitation only, industrial development industry; provided that this limitation
bonds that are backed only by the assets and shall not apply to Municipal Securities or
revenues of a non-governmental user shall not governmental guarantees of Municipal
be deemed to be Municipal Securities. Securities; but for these purposes only,
industrial development bonds that are backed
by the assets and revenues of a non-
governmental user shall not be deemed to be
Municipal Securities. Notwithstanding the
foregoing, there is no limitation with
respect to certificates of deposit and
bankers' acceptances issued by domestic
banks, or repurchase agreements secured
thereby. In the utilities category, the
industry shall be determined according to
the service provided. For example, gas,
electric, water and telephone will be
considered as separate industries.
</TABLE>
46
<PAGE> 51
<TABLE>
<CAPTION>
CURRENT: PROPOSED:
<S> <C>
For the Ohio Municipal Bond Fund:
The Fund may not purchase any securities FUNDAMENTAL RESTRICTION
which would cause 25% or more of the value The Fund may not purchase the securities of
of the Fund's total assets, at the time of any issuer (other than securities issued or
purchase, to be invested in securities of one guaranteed by the U.S. government or any of
or more issuers conducting their principal its agencies or instrumentalities, or
business activities in the same industry. In repurchase agreements secured thereby) if,
the utilities category, gas, electric, water as a result, more than 25% of the Fund's
and telephone companies will be considered as total assets would be invested in the
separate industries. securities of companies whose principal
business activities are in the same
industry; provided that this limitation
shall not apply to Municipal Securities or
governmental guarantees of Municipal
Securities; but for these purposes only,
industrial development bonds that are backed
only by the assets and revenues of a non-
governmental user shall not be deemed to be
Municipal Securities. In the utilities
category, the industry shall be determined
according to the service provided. For
example, gas, electric, water and telephone
will be considered as separate industries.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGES: The proposed changes would clarify
the exclusion of government securities from the 25% restriction on investments
concentrated in the same industry and standardize the Restrictions among the
Funds.
47
<PAGE> 52
PROPOSAL 9H
AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS CONCERNING COMMODITIES AND REAL ESTATE
<TABLE>
<CAPTION>
CURRENT: PROPOSED:
- --------------------------------------------- --------------------------------------------
<S> <C>
For all Funds other than the Growth, Balanced, Value, Special Value and U.S. Governmental
Obligations Funds:
No Fund may purchase or sell commodities, FUNDAMENTAL RESTRICTION --
COMMODITIES
commodity contracts (including futures No Fund may purchase or sell physical
contracts), direct participation in oil, gas, commodities unless acquired as a result of
or mineral exploration or development ownership of securities or other instruments
programs, or real estate . . . (investments (but this shall not prevent a Fund from
by [the] Fund in securities backed by mort- purchasing or selling options and futures
gages on real estate or in marketable contracts or from investing in securities or
securities of companies engaged in such other instruments backed by physical
activities are not hereby precluded). commodities).
FUNDAMENTAL RESTRICTION -- REAL ESTATE
No Fund may purchase or sell real estate
unless acquired as a result of ownership of
securities or other instruments (but this
shall not prevent a Fund from investing in
securities or other instruments backed by
real estate or securities of companies
engaged in the real estate business).
Investments by a Fund in securities backed
by mortgages on real estate or in marketable
securities of companies engaged in such
activities are not hereby precluded.
For the Growth, Balanced, Value and Special Value Funds:
No Fund may purchase or sell commodities, FUNDAMENTAL RESTRICTION --
COMMODITIES
commodity contracts (including futures No Fund may purchase or sell physical
contracts), direct participation in oil, gas, commodities unless acquired as a result of
or mineral exploration or development ownership of securities or other
programs, or real estate, except that the instruments.
[Funds] may purchase futures consistent with FUNDAMENTAL RESTRICTION -- REAL
ESTATE
their respective investment objective and No Fund may purchase or sell real estate
policies . . . (investments by [a] Fund in unless acquired as a result of ownership of
securities backed by mortgages on real estate securities or other instruments (but this
or in marketable securities of companies shall not prevent a Fund from investing in
engaged in such activities are not hereby securities or other instruments backed by
precluded.) real estate or securities of companies
engaged in the real estate business).
Investments by a fund in securities backed
by mortgages on real estate or in marketable
securities of companies engaged in such
activities are not hereby precluded.
</TABLE>
48
<PAGE> 53
<TABLE>
<CAPTION>
CURRENT: PROPOSED:
- --------------------------------------------- --------------------------------------------
<S> <C>
For the U.S. Government Obligations Fund:
The Fund may not purchase or sell FUNDAMENTAL RESTRICTION --
COMMODITIES
commodities, commodity contracts (including The Fund may not purchase or sell physical
futures contracts), direct participation in commodities unless acquired as a result of
oil, gas, or mineral exploration or ownership of securities or other
development programs, or real estate. instruments.
FUNDAMENTAL RESTRICTION -- REAL ESTATE
The Fund may not purchase or sell real
estate unless acquired as a result of
ownership of securities or other
instruments.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGES: The proposed changes modernize and
clarify the application of the Restrictions pertaining to commodities and real
estate, and to a large extent would standardize the Restrictions applicable to
each of the respective Funds.
The Restriction pertaining to commodities would permit investments in
futures. Since these Funds have no current intention of investing in futures,
this would only be changed so that there would be flexibility to use futures at
some later point in time.
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of a specific security, class of securities,
or an index at a specified future time and at a specified price. These Funds
will only sell futures contracts to protect securities they own against price
declines or purchase contracts to protect against an increase in the price of
securities they intend to purchase. None of the Funds will enter into futures
contract transactions to the extent that, immediately thereafter, the sum of its
initial margin deposits on open contracts exceeds 5% of the market value of the
respective Fund's total assets. In addition, none of the Funds will enter into
futures contracts to the extent that the value of the futures contracts held
would exceed 1/3 of the respective Fund's total assets. In addition to these
margin restrictions, transactions in futures contracts may involve the
segregation of funds pursuant to requirements imposed by the SEC. Under those
requirements, where a fund has a long position in a futures contract, it may be
required to establish a segregated account containing cash or certain liquid
assets equal to the purchase price of the contract (less any margin on deposit).
For a short position in futures or forward contracts held by a Fund, those
requirements may mandate the establishment of a segregated account with cash or
certain liquid assets that, when added to the amounts deposited as margin, equal
the market value of the instruments underlying the futures contracts (but are
not less than the price at which the short positions were established).
Positions in futures contracts may be closed out only on an exchange which
provides a secondary market for such futures. However, there can be no assurance
that a liquid secondary market will exist for any particular futures contract at
any specific time. Thus, it may not be possible to close a futures position. In
the event of adverse price movements, a Fund would continue to be required to
make daily cash payments to maintain the required margin. In such situations, if
a Fund has insufficient cash, it may have to sell portfolio securities to meet
daily margin requirements at a time when it may be disadvantageous to do so. In
addition, the inability to close options and futures positions also could have
an adverse impact on the ability to effectively hedge them. Utilization of
futures transactions by a Fund does involve the risk of imperfect correlation
where the securities underlying the futures contracts have different maturities
than the portfolio securities being hedged, and it is also possible that a Fund
could both lose money on futures contracts and also experience a decline in
value of its portfolio securities. There is also the risk of loss by a Fund of
margin deposits in the event of bankruptcy of a broker with whom the Fund has an
open position in a futures contract or related option.
49
<PAGE> 54
The Restriction pertaining to direct participation in oil, gas or mineral
development programs is proposed to be reclassified as non-fundamental so that
it may be changed without shareholder approval. This would have no immediate
effect on a Fund's investment program, since each Fund will continue to be
subject to a similar non-fundamental investment restriction. So long as any
Fund's shares are registered under the securities laws of the State of Texas and
such restrictions are required as a consequence of such registration, the Fund
is subject to the following non-fundamental policy:
"The Company has represented to the Texas State Securities
Board, on behalf of the investment portfolios of The Victory
Portfolios registered in that state, that those investment
portfolios will not invest in oil, gas or mineral leases or
purchase or sell real property (including limited partnership
interests, but excluding readily marketable securities of
companies which invest in real estate)."
INTRODUCTION TO PROPOSALS 9I-K. Proposals 9i-k are applicable to the
Diversified Stock, International Growth, Limited Term Income, Ohio Municipal
Bond, Ohio Regional Stock, Prime Obligations, Tax-Free Money Market and U.S.
Government Obligations Funds, as it is only these Funds which currently have the
Restrictions set forth below in each of these Proposals:
PROPOSAL 9I
AMENDMENT OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTION
CONCERNING INVESTMENTS IN OTHER INVESTMENT COMPANIES
<TABLE>
<S> <C>
CURRENT: PROPOSED:
No Fund may own more than 3% of the voting NON-FUNDAMENTAL RESTRICTION
securities of any one investment company, Each Fund may invest up to 5% of its total
invest more than 5% of its assets in the assets in the securities of any one
securities of any one investment company or investment company, but may not own more
invest more than 10% of its assets in than 3% of the securities of any one
securities issued by investment companies. investment company or invest more than 10%
of its total assets in the securities of
other investment companies. Pursuant to an
exemptive order received by The Victory
Portfolios from the SEC, the Funds may
invest in the Money Market Funds of The
Victory Portfolios. With respect to any such
investment, fees are waived to the extent
required under State requirements. For
example, a Texas undertaking currently
requires a disclosure that advisory fees
pertaining to any such investments will be
waived by Society.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: The proposed amendment to restate this
policy and reclassify it as non-fundamental would modernize and clarify the
Restriction on investments in other investment companies by giving the Funds the
broadest possible freedom to make such investments consistent with the
provisions of the 1940 Act. The proposed non-fundamental policy also takes into
account the fact that the Funds have obtained exemptive relief to allow
investments in affiliated money market funds. An undertaking made to a state
securities regulator currently requires that Society waive its investment
advisory fee from the Funds on all assets invested in other investment
companies.
50
<PAGE> 55
PROPOSAL 9J
RECLASSIFICATION OF CERTAIN FUNDS' FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING SECURITIES IN
WHICH AFFILIATES HAVE INVESTED
<TABLE>
<S> <C>
CURRENT: PROPOSED:
No Fund will purchase or retain securities of NON-FUNDAMENTAL RESTRICTION
any issuer if the Trustees of The Victory This Restriction would be made
Portfolios or the officers or directors of non-fundamental.
its investment adviser owning beneficially
more than one-half of 1% of the securities of
such issuer together own beneficially more
than 5% of such securities.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: The proposed reclassification of this
Restriction as non-fundamental would give the Funds additional flexibility and
remove an impediment which could be detrimental to the Funds' ability to take
advantage of certain investments in which certain affiliated persons may have
invested, to the extent that the investment would not otherwise be prohibited by
applicable provisions of the 1940 Act.
PROPOSAL 9K
RECLASSIFICATION OF CERTAIN FUNDS' FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING
SECURITIES OF UNSEASONED ISSUERS
<TABLE>
<S> <C>
CURRENT: PROPOSED:
No Fund may invest more than 10% of its total NON-FUNDAMENTAL RESTRICTION
assets in the securities of issuers which This Restriction would be made
together with any predecessors have a non-fundamental.
record of less than three years of continuous
operation.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: The proposed reclassification of this
Restriction as non-fundamental would give the Funds additional flexibility and
remove a restriction which could be detrimental to the Funds' having the ability
to take advantage of certain investments which a Fund's investment adviser might
deem to be desirable or advantageous.
51
<PAGE> 56
PROPOSAL 9L
AMENDMENT OF CERTAIN FUNDS' FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING INVESTMENTS
IN RESTRICTED AND ILLIQUID SECURITIES
This Proposal 9l is applicable to the International Growth, Ohio Municipal
Bond, Prime Obligations, Tax-Free Money Market and U.S. Government Obligations
Funds, as it is only these Funds which currently have a Restriction within this
category. The terms of the current Restrictions of these Funds vary somewhat, as
indicated below:
<TABLE>
<CAPTION>
CURRENT: PROPOSED:
<S> <C>
For the Prime Obligations, Tax-Free Money Market and U.S. Government Obligations Funds:
The Fund may not enter into repurchase NON-FUNDAMENTAL RESTRICTION
agreements with maturities in excess of seven The Fund will not invest more than 10% of
days if such investment, together with its net assets in illiquid securities.
other instruments in the fund which are not
readily marketable, exceeds 10% of the Fund's
total assets.
For the International Growth Fund:
The Fund may not enter into repurchase NON-FUNDAMENTAL RESTRICTION
agreements with maturities in excess of seven The Fund will not invest more than 15% of
days if such investment, together with its net assets in illiquid securities.
other instruments in the Fund, including
over-the-counter hedging transactions and
securities subject to legal or contractual
restrictions for which market quotes are not
readily available, exceeds more than 15% of
the Fund's total assets.
For the Ohio Municipal Bond Fund:
The Fund may not invest (except with respect NON-FUNDAMENTAL RESTRICTION
to variable or floating rate notes subject The Fund will not invest more than 15% of
to a seven-day or less demand feature) more its net assets in illiquid securities.
than 15% of its total assets in securities
subject to legal or contractual restrictions
[or] for which market quotes are not readily
available, including repurchase agreements
providing for settlement more than seven days
after notice. Variable and floating rate
notes are described in the Fund's Prospectus.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGES: Illiquid securities are securities
that are not readily marketable or cannot be disposed of promptly within seven
days and in the usual course of business at approximately the price at which a
Fund has valued them. Such securities include, but are not limited to, time
deposits and repurchase agreements with maturities longer than seven days.
Securities that may be resold under Rule 144A or securities offered pursuant to
Section 4(2) of the 1933 Act shall not be deemed illiquid solely by reason of
being unregistered. Each Fund's investment adviser determines whether a
particular security is deemed to be liquid based on the trading markets for the
specific security and other factors.
The proposed changes would standardize, among all Funds within the same
category (i.e., all Money Market Funds and all non-Money Market Funds), the
applicable investment restriction, and would remove from all of the descriptions
certain interpretations of what may constitute illiquid securities. By doing
this, each Fund would be subject to the same current interpretations, from time
to time, of what constitutes an illiquid security under SEC releases and other
relevant authority. The defundamentalization of these
52
<PAGE> 57
restrictions would avoid the delay and expense of a shareholder vote in the
event that the permissible guidelines for investments in illiquid securities
changes at some time in the future.
PROPOSAL 9M
RECLASSIFICATION OF CERTAIN FUNDAMENTAL
INVESTMENT RESTRICTIONS OF THE TAX-FREE MONEY MARKET FUND
CONCERNING THE USE OF OPTIONS
For the Tax-Free Money-Market Fund only:
<TABLE>
<S> <C>
CURRENT: PROPOSED:
The Fund may not acquire a put if, NON-FUNDAMENTAL RESTRICTION
immediately after such acquisition, more The Fund may not acquire an over the counter
than 5% of the total amortized cost value of put if, immediately after such acquisition,
the Fund's assets would be subject to puts more than 5% of the value of the Fund's
from the same institution except that (i) up total assets would be subject to over the
to 25% of the value of the Fund's total counter puts from the same institution
assets may be subject to puts without regard except that (i) up to 25% of the value of
to such 5% limitation and (ii) the 5% the Fund's total assets may be subject to
limitation is inapplicable to puts that, by puts without regard to such 5% limitation
their terms, would be readily exercisable in and (ii) the 5% limitation is inapplicable
the event of a default in payment of to puts that, by their terms, would be
principal or interest on the underlying readily exercisable in the event of a
securities. In applying the above-described default in payment of principal or interest
limitation, the Fund will aggregate on the underlying securities. In applying
securities subject to puts from any one the above- described limitation, the Fund
institution with the Fund's investments, if will aggregate securities subject to over
any, in securities issued or guaranteed by the counter puts from any one institution
that institution. In addition, for the with the Fund's investments, if any, in
purpose of this investment restriction and securities issued or guaranteed by that
the investment restriction below, a put will institution.
be considered to be from the party to whom
the Fund will look for payment of the
exercise price.
The Fund may not acquire a put that, by its NON-FUNDAMENTAL RESTRICTION
terms, would be readily exercisable in the The Fund may not acquire an over the counter
event of a default in payment of principal or put that, by its terms, would be readily
interest on the underlying security or exercisable in the event of a default in
securities if, immediately after that payment of principal or interest on the
acquisition, the amortized cost value of the underlying security or securities if,
security or securities underlying that put, immediately after that acquisition, the
when aggregated with the amortized cost value value of the security or securities
of any other securities issued or guaranteed underlying that put, when aggregated with
by the issuer of the put, would exceed 10% of the value of any other securities issued or
the total amortized cost value of the Fund's guaranteed by the issuer of the put, would
total assets. exceed 10% of the value of the Fund's total
assets.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: The proposed reclassification of these
Restrictions as non-fundamental would avoid the delay and expense of a
shareholder vote in the event that the permissible guidelines for such
investments changes at some time in the future. The terms of these Restrictions
are consistent with general restrictions applicable to money market funds,
including limitations on liquidity and portfolio diversification. Therefore, no
foreseeable impact on the Fund is anticipated by the proposed reclassification.
53
<PAGE> 58
PROPOSAL 9N
RECLASSIFICATION OF A FUNDAMENTAL INVESTMENT RESTRICTION
OF CERTAIN FUNDS CONCERNING THE USE OF OPTIONS
For the Diversified Stock, Limited Term Income, Ohio Municipal Bond, Ohio
Regional Stock and Tax-Free Money-Market Funds:
<TABLE>
<S> <C>
CURRENT: PROPOSED:
The Fund may not write or sell puts, NON-FUNDAMENTAL RESTRICTION
straddles, spreads or combinations thereof This Restriction would be made
(except that each of the Tax-Free Money non-fundamental.
Market Fund and the Ohio Municipal Bond Fund
may acquire puts with respect to Municipal
Securities and Ohio Tax-Exempt Obligations,
respectively, in its respective portfolios
and sell those puts in conjunction with a
sale of such Municipal Securities or Ohio
Tax-Exempt Obligations).
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: There is no current intention to write
or sell puts, straddles, spreads or combinations thereof. The proposed
reclassification of this Restriction as non-fundamental would avoid the delay
and expense of a shareholder vote in the event that the investment
considerations or permissible guidelines for such investments changes at some
time in the future. In the event of such a change, appropriate disclosure will
be added to the Funds' Prospectuses and Statements of Additional Information.
PROPOSAL 9O
AMENDMENT OF THE FUNDAMENTAL INVESTMENT RESTRICTION OF THE
U.S.
GOVERNMENT OBLIGATIONS FUND CONCERNING THE
PERMISSIBLE INVESTMENTS IN GOVERNMENT SECURITIES
For the U.S. Government Obligations Fund:
<TABLE>
<S> <C>
CURRENT: PROPOSED:
The Fund may not purchase securities other FUNDAMENTAL RESTRICTION
than U.S. Treasury bills, notes, and other The Fund may not purchase securities other
obligations issued or guaranteed by the U.S. than U.S. Treasury bills, notes, and other
Government or its agencies or obligations issued or guaranteed by the U.S.
instrumentalities, some of which may be Government or its agencies or
subject to repurchase agreements. instrumentalities whose obligations are
backed by the full faith and credit of the
U.S. Treasury, some of which may be subject
to repurchase agreements.
</TABLE>
EXPLANATION OF THE PROPOSED CHANGE: The proposed amendment of this
Restriction clarifies that as a matter of fundamental policy, the Fund may not
invest in any government securities which are not guaranteed as to payment by
the U.S. Treasury.
54
<PAGE> 59
PROPOSAL 9P
CHANGE OF THE OHIO MUNICIPAL BOND FUND'S STATUS
FROM DIVERSIFIED TO NONDIVERSIFIED UNDER THE 1940 ACT
For the Ohio Municipal Bond Fund:
The Ohio Municipal Bond Fund is currently classified as a "diversified"
fund under the provisions of the 1940 Act. Under the 1940 Act, a "diversified"
fund is defined to mean one which meets the following requirements:
At least 75 percentum of the value of its total assets is
represented by cash and cash items (including receivables),
Government securities, securities of other investment
companies, and other securities for the purposes of this
calculation limited in respect of any one issuer to an amount
not greater in value than 5 percentum of the value of the
total assets of the fund and to not more than 10 percentum of
the outstanding voting securities of such issuer.
The 1940 Act provides that a fund may not change its status from a
diversified to a nondiversified fund without the requisite approval from the
Fund's shareholders. The Board is hereby proposing that the shareholders of the
Ohio Municipal Bond Fund approve of this change with respect to such Fund.
REASONS FOR THE PROPOSED CHANGE:
Currently, with respect to 75% of the Fund's assets, no more than 5% of the
Fund's assets may be invested in one issuer. With respect to municipal
securities, the issuers consist of either a particular state (for a general
obligations bond or note) or the particular facility which backs the payment
obligation under a revenue bond. At certain times, the Fund may wish to take
advantage of certain favorable investments of any such issuer, involving more
than 5% of the Fund's assets. This would help provide additional flexibility for
the investment of the Fund's assets.
This Proposal relates only to the Fund's status under, and the related
requirement of, the 1940 Act. If this proposal is approved, the Fund would still
be subject to certain asset diversification requirements (as well as other
requirements) under Subchapter M under the Internal Revenue Code. These
requirements apply because the Fund has elected to be taxed as a "regulated
investment company," and receive the benefits provided to such entities under
Subchapter M. One such benefit is "flow-through tax treatment" -- in other
words, that income and gains received by the Fund are not taxed to the Fund, but
are taxed to shareholders when distributed by the Fund. The asset
diversification requirements under Subchapter M are similar to the requirements
for a "diversified" status under the 1940 Act, except that the Subchapter M
diversification requirements limiting investments in the same issuer to no more
than 5% of a fund's assets and to 10% of the issuer's voting securities are
applicable only with respect to 50% (rather than 75% of the total assets of the
Fund).
ADDITIONAL INFORMATION REGARDING PROPOSALS 9A-P
Unless otherwise noted, whenever an amended or restated investment policy
or limitation states a maximum percentage of a Fund's assets that may be
invested, such percentage limitation will be determined immediately after and as
a result of the acquisition of such security or other asset, except in the case
of borrowing (or other activities that may be deemed to result in the issuance
of a "senior security" under the 1940 Act). Any subsequent change in values,
assets, or other circumstances will not be considered when determining whether
the investment complies with the Fund's investment policies and limitations. If
the value of a Fund's holdings of illiquid securities at any time exceeds the
percentage limitation applicable at the time of acquisition (see Proposal 9l)
due to subsequent fluctuations in value or other reasons, the Board will
consider what actions, if any, are appropriate to maintain adequate liquidity.
If any of Proposals 9a-p are not approved by shareholders, the current
Restriction will remain unchanged. Each of the above Proposals to change a
Fund's Restriction requires the approval of a "majority of the outstanding
voting securities" of the Fund, as defined under the 1940 Act.
FOR THE REASONS INDICATED ABOVE, THE BOARD OF TRUSTEES
RECOMMENDS THAT
SHAREHOLDERS VOTE FOR EACH OF THE PROPOSED CHANGES TO THE FUNDS'
RESTRICTIONS
SET FORTH IN PROPOSALS 9A-P ABOVE.
55
<PAGE> 60
OTHER INFORMATION
The Fund's present administrator is CHC. The following are officers of the
Company who may be deemed to have an interest in CHC by virtue of their status
as employees and/or executive officers of CHC:
<TABLE>
<CAPTION>
POSITION WITH OFFICER OF THE
NAME THE COMPANY AGE COMPANY SINCE
----------------------------------------------------- ---------------- --- --------------
<S> <C> <C> <C>
William B. Blundin................................... Vice President 57 1995
J. David Huber....................................... Vice President 49 1988
Scott A. Englehart................................... Secretary 33 1993
George O. Martinez................................... Asst. Treasurer 36 1995
Martin R. Dean....................................... Treasurer 31 1995
Adrian Waters........................................ Asst. Treasurer 32 1995
</TABLE>
VOTING INFORMATION AND DISCRETION
OF ATTORNEYS NAMED IN THE PROXY
While the Meeting is called to act upon the Proposals set forth in this
proxy statement as well as any other business that may properly come before it,
at the date of this proxy statement the only business which the management
intends to present or knows that others will present is the business mentioned
in the Notice of Meeting and this proxy statement. If any other matters lawfully
come before the Meeting, and in all procedural matters at the Meeting, it is the
intention that the enclosed proxy shall be voted in accordance with the best
judgment of the attorneys named therein, or their substitutes, present and
acting at the Meeting.
If at the time any session of the Meeting is called to order a quorum is
not present, in person or by proxy, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of one or more of
the Proposals have not been received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies with respect to any such Proposal. All such adjournments will require
the affirmative vote of a majority of the Shares present in person or by proxy
at the session of the Meeting to be adjourned. The persons named as proxies will
vote those proxies which they are entitled to vote in favor of a Proposal in
favor of such an adjournment, and will vote those proxies required to be voted
against the Proposal against any such adjournment. A vote may be taken on one or
more of the Proposals in this proxy statement prior to any such adjournment if
sufficient votes for its approval have been received and it is otherwise
appropriate.
As of the Record Date, the Company believed that Key Trust and its
affiliates were shareholders of record of the following outstanding Shares of
the following Funds:
<TABLE>
<CAPTION>
NAME OF FUND SHARES
----------------------------------------------------------- -----------------
<S> <C>
Institutional Money Market Fund............................ 501,967,823.010
Tax-Free Money Market Fund................................. 276,453,690.900
Limited Term Income Fund................................... 16,966,613.881
Government Mortgage Fund................................... 12,564,984.309
Intermediate Income Fund................................... 16,668,409.715
Investment Quality Bond Fund............................... 12,601,879.556
Financial Reserves Fund.................................... 724,320,179.150
Ohio Municipal Money Market Fund........................... 411,895,944.260
Balanced Fund.............................................. 18,270,284.913
Stock Index Fund........................................... 12,585,502.210
Diversified Stock Fund..................................... 29,524,090.892
Growth Fund................................................ 8,720,509.827
Special Value Fund......................................... 15,818,464.485
</TABLE>
56
<PAGE> 61
<TABLE>
<CAPTION>
NAME OF FUND SHARES
----------------------------------------------------------- -----------------
<S> <C>
Value Fund................................................. 24,865,009.482
Special Growth Fund........................................ 4,565,169.105
Ohio Regional Stock Fund................................... 2,406,582.347
International Growth Fund.................................. 8,514,692.054
U.S. Government Obligations Fund........................... 759,582,712.150
Prime Obligations Fund..................................... 130,062,426.120
New York Tax-Free Fund..................................... 425,723.834
National Muni Bond Fund.................................... 742,188.579
Government Bond Fund....................................... 2,725,872.318
Fund for Income............................................ 182,631.000
Ohio Municipal Bond Fund................................... 5,278,977.877
-----------------
Total............................................ 2,997,710,361.997
</TABLE>
As of the Record Date, Key Trust and its affiliates were believed to
possess voting power with respect to the following percentages of the
outstanding Shares, in view of which such Shares could be deemed to be
beneficially owned by Key Trust and its affiliates as of such date:
<TABLE>
<CAPTION>
VICTORY FUND % OF OUTSTANDING SHARES
-------------------------------------------------- --------------------------
<S> <C>
Prime Obligations Fund............................ 6.79%
Ohio Municipal Money Market Fund.................. 13.14%
Tax-Free Money Market Fund........................ 36.92%
Institutional Money Market Fund................... 42.18%
Financial Reserves Fund........................... 44.66%
U.S. Government Obligations Fund.................. 48.51%
Government Bond Fund (Class A).................... 88.62%
Fund For Income................................... 0.69%
Limited Term Income Fund.......................... 95.01%
Government Mortgage Fund.......................... 85.91%
Intermediate Income Fund.......................... 91.65%
Investment Quality Bond Fund...................... 92.34%
National Municipal Bond Fund (Class A)............ 40.43%
New York Tax-Free Fund (Class A).................. 8.15%
Ohio Municipal Bond Fund.......................... 77.11%
Stock Index Fund.................................. 80.87%
Value Fund........................................ 96.26%
Growth Fund....................................... 94.42%
Special Growth Fund............................... 94.26%
Balanced Fund..................................... 85.31%
Diversified Stock Fund............................ 85.68%
Ohio Regional Stock Fund.......................... 78.59%
Special Value Fund................................ 91.30%
International Growth Fund......................... 87.61%
</TABLE>
However, Key Trust and its affiliates have advised the Company that Key Trust
and its affiliates intend to vote any Shares over which they have voting power
at the Meeting (i) in the manner instructed by the customers for which such
shares are held, or (ii) in the event that such instructions are not received,
in the same proportion as the votes cast by other shareholders (including Key
Trust and its affiliate's customers who
57
<PAGE> 62
furnish voting instructions). As of the Record Date, the Company believed that
the following persons beneficially owned more than 5% of a class of Shares of
the Funds:
<TABLE>
<CAPTION>
PERCENTAGE
OF SHARES OF
NAME OF VICTORY FUND CLASS
(AND CLASS OF SHARES) NAME AND ADDRESS NO. OF SHARES
OUTSTANDING
- -------------------------------- --------------------------------- --------------- ------------
<S> <C> <C> <C>
Ohio Municipal Money
Market Fund................... Kevan Millstein 25,528,057.09 5.00%
Norman Millstein
37040 Cedar Road
Cleveland, OH 44122
Institutional Money Market Fund
(Service Class)............... Murphy Realty Co., Inc. 1,000,574.08 24.13%
Attn: Peter Murphy
20 Hastings St.
St. Johnsburg, VT 05819
Institutional Money Market Fund
(Service Class)............... Shelter Components Corp. 3,000,000.00 72.35%
27217 Country Road 6
Elkhart, IN 46514-5601
Institutional Money Market Fund
(Institutional Class)......... Centerior Energy Retirement Plan 36,943,447.23 7.27%
Centerior Energy
6200 Oak Tree Blvd.
Independence, OH 44131
Institutional Money Market Fund
(Institutional Class)......... KeyCorp 401(k) Plan 81,753,764.34 16.09%
127 Public Square
Cleveland, OH 44114
Limited Term Income Fund........ Aultman Health Services 1,613,132.86 9.41%
2600 Sixth Street SW
Canton, OH 44710
Limited Term Income Fund........ KeyCorp 401(k) Plan Bond Fund 7,835,086.69
45.70%
127 Public Square
Cleveland, OH 44114
U.S. Government Obligations
Fund.......................... Marion Merrell Dow, Inc. 46,376,960.19 5.10%
9300 Ward Parkway
Kansas City, MO 64114-0480
Value Fund...................... KeyCorp 401(k) Plan Equity Fund 12,193,608.24 49.05%
127 Public Square
Cleveland, OH 44114
Stock Index Fund................ Eaton SPIP Victory Stock Index 848,848.74 6.75%
Eaton Corporation
Eaton Center
Cleveland, OH 44114
Special Value Fund.............. KeyCorp Cash Balance Mutual 1,980,984.85 12.49%
Equity Fund
127 Public Square
Cleveland, OH 44114
Special Growth Fund............. KeyCorp Cash Balance Mutual 1,856,580.00 40.65%
Equity Fund
127 Public Square
Cleveland, OH 44114
Special Growth Fund............. La-Z-Boy Chair Company 229,887.79 5.03%
1284 North Telegraph Road
Monroe, MI 48161-3390
</TABLE>
58
<PAGE> 63
<TABLE>
<CAPTION>
PERCENTAGE
OF SHARES OF
NAME OF VICTORY FUND CLASS
(AND CLASS OF SHARES) NAME AND ADDRESS NO. OF SHARES
OUTSTANDING
- -------------------------------- --------------------------------- --------------- ------------
<S> <C> <C> <C>
International Growth Fund....... KeyCorp Cash Pen. International 729,941.05 8.45%
127 Public Square
Cleveland, OH 44114
Growth Fund..................... KeyCorp Cash Balance 2,269,063.51 25.42%
Mutual/Equity Fund
127 Public Square
Cleveland, OH 44114
Balanced Fund................... KeyCorp Plan Balanced Fund 1,835,152.73 10.04%
127 Public Square
Cleveland, OH 44114
Stock Index Fund................ Northern Trust 814,133.10 6.47%
Attn: Mutual Funds
P.O. Box 92956
Chicago, IL 60675-2956
Stock Index Fund................ Aultman Hospital 1,082,050.84 8.61%
2600 6th Street SW
Canton, OH 44710
</TABLE>
SUBMISSION OF PROPOSALS FOR THE
NEXT MEETING OF SHAREHOLDERS
Under the Current Company's Declaration of Trust and By-Laws (and under the
provisions of the proposed Delaware Trust Instrument for the Successor Company),
annual meetings of shareholders are not required to be held unless necessary
under the 1940 Act (for example, when fewer than a majority of the Trustees have
been elected by shareholders). Therefore, the Company does not hold shareholder
meetings on an annual basis. A shareholder proposal intended to be presented at
any meeting hereafter called should be sent to the Company at 3435 Stelzer Road,
Columbus, Ohio 43219-3035, and must be received by the Company within a
reasonable time before the solicitation relating thereto is made in order to be
included in the notice or proxy statement related to such meeting. The
submission by a shareholder of a proposal for inclusion in a proxy statement
does not guarantee that it will be included. Shareholder proposals are subject
to certain regulations under federal securities law.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. IF YOU DO NOT
EXPECT TO
ATTEND THE MEETING, PLEASE SIGN YOUR PROXY CARD PROMPTLY AND
RETURN IT IN THE
ENCLOSED ENVELOPE TO AVOID UNNECESSARY EXPENSE AND DELAY. NO
POSTAGE IS
NECESSARY.
BY ORDER OF THE BOARD OF TRUSTEES OF
THE VICTORY PORTFOLIOS
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
October 31, 1995
59
<PAGE> 64
SCHEDULE 1
The following is a comparison of shareholder voting rights and other
aspects of the provisions of the existing Declaration of Trust and Code of
Regulations of the Company and the proposed Delaware Trust Instrument and
By-laws:
<TABLE>
<CAPTION>
ISSUE CURRENT PROPOSED
- --------------- ------------------------------------- -------------------------------------
<S> <C> <C>
Voting in the
Aggregate.... All issued and outstanding shares On any matter submitted to a vote of
entitled to vote shall vote in the the Shareholders, all Shares shall be
aggregate on all matters submitted voted separately by individual
unless otherwise required by the 1940 Series, and whenever the Trustees
Act or determined by the Trustees to determine that the matter affects
affect only a Series (a Fund). only certain Series, may be submitted
for a vote by only such Series,
except (i) when required by the 1940
Act, Shares shall be voted in the
aggregate and not by individual
Series; and (ii) when the Trustees
have determined that the matter
affects the interests of more than
one Series and that voting by
Shareholders of all Series would be
consistent with the 1940 Act, then
the Shareholders of all such Series
shall be entitled to vote thereon
(either by individual Series or by
Shares voted in the aggregate, as the
Trustees in their discretion may
determine). The Trustees may also
determine that a matter affects only
the interests of one or more classes
of Series, in which case (or if
required under the 1940 Act) such
matter shall be voted on by such
class or classes.
</TABLE>
60
<PAGE> 65
<TABLE>
<CAPTION>
ISSUE CURRENT PROPOSED
- --------------- ------------------------------------- -------------------------------------
<S> <C> <C>
Quorum and
Required
Vote......... Majority of shares of each Series One-third of the Shares outstanding
outstanding and entitled to vote, but and entitled to vote in person or by
(i) if only actions to be voted on at proxy as of the record date for a
a meeting are required by the 1940 Shareholders' meeting shall be a
Act to be voted on by all outstanding quorum for the transaction of
shares of all Series entitled to vote business at such Shareholders'
thereon, a quorum is a majority of meeting, except that where any
shares, without regard to Series, provision of law or of this Trust
entitled to vote thereon; (ii) if the Instrument permits or requires that
only actions to be voted on at a holders of any Series shall vote as a
meeting have been determined by the Series (or that holders of a class
Board to require voting by Series, a shall vote as a class), then
quorum is a majority of the one-third of the aggregate number of
outstanding shares of the affected Shares of that Series (or that class)
Series. Majority of shares voted entitled to vote shall be necessary
decides any question and a plurality to constitute a quorum for the
elects Trustees, except that when a transaction of business by that
provision of law or the Declaration Series (or that class). Except when a
of Trust requires voting by Series on larger vote is required by law or by
any matter, then the vote of a any provision of this Trust
majority of outstanding shares of Instrument or the Bylaws, a majority
that Series decides the matter as far of the Shares voted in person or by
as the Series is concerned. proxy shall decide any questions and
a plurality shall elect a Trustee,
provided that where any provision of
law or of this Trust Instrument
permits or requires that the holders
of any Series shall vote as a Series
(or that the holders of any class
shall vote as a class), then a
majority of the Shares present in
person or by proxy of that Series (or
class), voted on the matter in person
or by proxy shall decide that matter
insofar as that Series (or class) is
concerned.
Voting
Powers....... Shareholders are entitled to vote on: The Shareholders shall have power to
(i) election or removal of Trustees, vote only (a) for the election of
(ii) with respect to the amendment of Trustees, (b) for the removal of
the Declaration of Trust, (iii) with Trustees, (c) with respect to any
respect to the approval of the investment advisory agreement, (d)
investment advisory agreements with respect to an amendment of this
entered into on behalf of the Trust Trust Instrument, and (e) with
or any series, and with respect to respect to such additional matters
other matters required by law, the relating to the Trust as may be
Declaration of Trust, the By-laws of required by law, by this Trust
the Trust, any other agreement of the Instrument, or any registration of
Trust, or the Trustees, and (iv) to the Trust with the Commission or any
the same extent as the shareholders State, or as the Trustees may
of a Massachusetts corporation. consider desirable. Notwithstanding
the foregoing, the Trustees may take
action without a Shareholder vote if
(i) the Trustees shall have obtained
an opinion of counsel that a vote or
approval of such action by
Shareholders is not required under
(A) the 1940 Act or any other
applicable laws, or (B) any
registrations, undertakings or
agreements of the Trust known to such
counsel, and the taking of such
action without a Shareholder vote
would be consistent with the best
interests of the Shareholders.
</TABLE>
61
<PAGE> 66
<TABLE>
<CAPTION>
ISSUE CURRENT PROPOSED
- --------------- ------------------------------------- -------------------------------------
<S> <C> <C>
Termination of
Trust........ Requires the vote of a majority of The Trustees may: (i) sell and convey
the outstanding shares of any Series all or substantially all of the
of the Trust to sell or convey the assets of the Trust or any affected
assets of the Series to another trust Series to another entity that is an
or corporation, for an adequate open end management investment
consideration which may include the company; (ii) enter into a plan of
assumption of all outstanding liquidation in order to terminate and
obligations, taxes, and other liquidate any Series (or class) of
liabilities of the Series. Upon the Trust, or the Trust; or (iii) at
making provisions for the payment of any time sell and convert into money
all liabilities, the Trustees shall all of the assets of the Trust or any
distribute the remaining proceeds affected Series, and, upon making
ratably among the holders of the reasonable provision, in the
shares of the Series then determination of the Trustees, for
outstanding. Upon completion of the payment of all liabilities by
distribution, the Trustees may assumption or otherwise, the Trustees
authorize the termination of that shall distribute the remaining
Series. proceeds or assets (as the case may
be) of each Series (or class) ratably
among the holders of Shares of the
affected Series, based upon the ratio
that each Shareholder's Shares bears
to the number of Shares of such
Series (or class) then outstanding.
Notice......... Written notice must be given to each Notice shall be sent, by First Class
shareholder of record entitled to Mail or such other means determined
vote at least 10 days prior to a by the Trustees, at least 10 days
meeting, unless otherwise provided by prior to any such meeting.
law.
Record Date.... Not more than 50 days prior to the The Trustees may close the Share
date of any meeting or the date fixed transfer books of the Trust for a
for payment of any dividend or the period not exceeding sixty (60) days
date of the allotment of rights of preceding the date of any meeting of
the date when any change of Shareholders, or the date for the
conversion or exchange of Shares payment of any dividends or other
shall go into effect. distributions, or the date for the
allotment of rights, or the date when
any change or conversion or exchange
of Shares shall go into effect; or in
lieu of closing the stock transfer
books as aforesaid, the Trustees may
fix in advance a date, not exceeding
sixty (60) days preceding the date of
any meeting of Shareholders, or [any
such other event] as a record date
for the determination of the
Shareholders entitled to notice of,
and to vote at, any such meeting, or
entitled to receive payment of any
such dividend or other distribution,
or to any such allotment of rights,
or to exercise the rights in respect
of any such change, conversion or
exchange of Shares.
</TABLE>
62
<PAGE> 67
SCHEDULE 2
BUSINESS MANAGEMENT FEES
For the Victory Balanced Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF FEE*
- ----------------------- ------------
<S> <C>
up to $10 .45%
next $15 .30
next $25 .20
above $50 .15
</TABLE>
For the Victory Diversified Stock Fund, Growth Fund, Stock Index Fund and
Value Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF FEE*
- ----------------------- ------------
<S> <C>
up to $10 .30%
next $15 .15
next $25 .05
above $50 .00
</TABLE>
For the Victory International Growth Fund, Ohio Regional Stock Fund and
Special Value Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF FEE*
- ----------------------- ------------
<S> <C>
up to $10 .55%
next $15 .35
next $25 .20
above $50 .10
</TABLE>
For the Victory Intermediate Income Fund, Investment Quality Bond Fund,
Limited Term Income Fund, Ohio Municipal Bond Fund, Government Bond Fund,
Government Mortgage Fund, National Municipal Bond Fund and New York Tax-Free
Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF FEE*
- ----------------------- ------------
<S> <C>
up to $10 .25%
next $15 .15
next $25 .10
above $50 .05
</TABLE>
For the Victory Prime Obligations Fund, Tax-Free Money Market Fund, U.S.
Government Obligations Fund, Financial Reserves Fund, Institutional Money Market
Fund and Ohio Municipal Money Market Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF FEE*
- ----------------------- ------------
<S> <C>
up to $10 .20%
next $15 .15
next $25 .10
above $50 .075
</TABLE>
- ---------------
* As a percentage of average daily net assets. Note, however, that KeyCorp
Advisers shall have the right, but not the obligation, to voluntarily waive
any portion of the business management fee from time to time. Any such
voluntary waiver will be irrevocable and determined in advance of rendering
business management services by KeyCorp Advisers, and shall be in writing and
signed by the parties to the Business Management Agreement.
63
<PAGE> 68
EXHIBITS
<PAGE> 69
EXHIBIT A
AGREEMENT AND PLAN OF CONVERSION AND TERMINATION
AGREEMENT AND PLAN OF CONVERSION AND TERMINATION dated
, 1995 (the "Agreement"), between The Victory Portfolios, a
Massachusetts business trust having an office at 3435 Stelzer Road, Columbus,
Ohio 43219-3035 (the "Massachusetts Trust") and The Victory Portfolios, a
Delaware business trust having an office at 3435 Stelzer Road, Columbus, Ohio
43219-3035 (the "Delaware Trust").
WHEREAS, the Board of Trustees of the Massachusetts Trust and the Board of
Trustees of the Delaware Trust have determined that it is in the best interests
of the Massachusetts Trust and the Delaware Trust, respectively, that the assets
of the Massachusetts Trust be acquired by the Delaware Trust pursuant to this
Agreement and in accordance with the applicable laws of the Commonwealth of
Massachusetts and the State of Delaware; and
WHEREAS, the parties desire to enter into a plan of exchange which would
constitute a reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended:
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. PLAN OF EXCHANGE.
(a) Subject to the terms and conditions set forth herein, on the
Exchange Date (as defined herein), the Massachusetts Trust shall assign,
transfer and convey the assets of each of its series identified on Schedule
I hereto (collectively, the "Current Funds" and each individually, a
"Current Fund"), including all securities and cash held by each Current
Fund (subject to the liabilities of each such Current Fund) to the
corresponding series of the Delaware Trust identified on Schedule I hereto
(collectively, the "Successor Funds" and each individually, a "Successor
Fund"), and each such Successor Fund shall acquire all of the assets of
each corresponding Current Fund (subject to the liabilities of each such
Current Fund) in exchange for full and fractional shares of beneficial
interest of such Successor Fund, no par value per share (the "Fund
Shares"), to be issued by the Delaware Trust, having, in the case of each
Successor Fund, an aggregate net asset value equal to the value of the net
assets of the corresponding Current Fund acquired. The value of the assets
of each of the Current Funds and the net asset value per share of the Fund
Shares of each of the Successor Funds shall be determined as of the
Exchange Date in accordance with the procedures for determining the value
of each Current Fund's assets set forth in the Massachusetts Trust's
Declaration of Trust and the then-current prospectus and statement of
additional information for each Current Fund that forms a part of the
Massachusetts Trust's Registration Statement on Form N-1A (the
"Registration Statement"). In lieu of delivering certificates for the Fund
Shares, the Delaware Trust shall credit the Fund Shares to the
Massachusetts Trust's account on the share record books of the Delaware
Trust and shall deliver a confirmation thereof to the Massachusetts Trust.
The Massachusetts Trust shall then deliver written instructions to the
Delaware Trust's transfer agent to establish accounts for the shareholders
on the share record books relating to each of the Current Funds. With
respect to any Current Fund that offers more than one class of shares as of
the Exchange Date, the exchange transaction described above will involve
the delivery of shares of classes relative to the corresponding class of
each such Current Fund, respectively. Fund Shares of each such class shall
have the same aggregate net asset value as the aggregate net asset value of
the corresponding class of the Current Fund. Notwithstanding anything
expressly or by implication set forth herein (but without limiting the
rights of the Boards of Trustees of the Massachusetts Trust and Delaware
Trust under Section 7 hereof), this Agreement, and the transactions
contemplated herein, shall be deemed to apply to each Current Fund as to
which the condition precedent set forth in section 6(a) hereof shall have
been satisfied and its corresponding Successor Fund, and shall not apply to
any Current Fund (or its corresponding Successor Fund) as to which such
condition precedent shall not have been satisfied.
<PAGE> 70
(b) Delivery of the assets of each of the Current Funds to be
transferred shall be made not later than the next business day following
the Exchange Date. Assets transferred shall be delivered to Key Trust
Company of Ohio, N.A., the Delaware Trust's custodian (the "Custodian"),
for the account of the Delaware Trust and the Successor Funds, with all
securities not in bearer or book entry form duly endorsed, or accompanied
by duly executed separate assignments or stock powers, in proper form for
transfer, with signatures guaranteed, and with all necessary stock transfer
stamps, sufficient to transfer good and marketable title thereto (including
all accrued interest and dividends and rights pertaining thereto) to the
Custodian for the account of the Delaware Trust and the Successor Funds
free and clear of all liens, encumbrances, rights, restrictions and claims.
All cash delivered shall be in the form of immediately available funds
payable to the order of the Custodian for the account of the Delaware Trust
and the Successor Funds. All assets delivered to the Custodian as provided
herein shall be allocated by the Delaware Trust to each Successor Fund
corresponding to the Current Fund from which, or on the account of which,
the assets were transferred.
(c) The Massachusetts Trust will pay or cause to be paid to the
Delaware Trust any interest received on or after the Exchange Date with
respect to assets transferred from any Current Fund to the corresponding
Successor Fund hereunder and the Delaware Trust shall allocate any such
interest to the appropriate Successor Fund. The Massachusetts Trust will
transfer to the Delaware Trust any distributions, rights or other assets
received by the Massachusetts Trust after the Exchange Date as
distributions on or with respect to the securities transferred from any
Current Fund to the corresponding Successor Fund hereunder and the Delaware
Trust shall allocate any such distributions, rights or other assets to the
appropriate Successor Fund. All such assets shall be deemed included in
assets transferred to the Current Funds on the Exchange Date and shall not
be separately valued.
(d) The Exchange Date shall be February 29, 1996, or such earlier or
later date as may be mutually agreed upon by the parties.
(e) As soon as practical after the Exchange Date, the Massachusetts
Trust shall distribute all of the Fund Shares of each of the Successor
Funds received by it among the shareholders of each corresponding Current
Fund in proportion to the number of shares each such shareholder holds in
each such Current Fund and, upon the effecting of such a distribution on
behalf of all of the Current Funds, the Massachusetts Trust will dissolve
and terminate. After an Exchange Date, a Current Fund which has been
subject of the exchange transactions on such Exchange Date shall not
conduct any business except in connection with its dissolution and
termination.
2. THE MASSACHUSETTS TRUST'S REPRESENTATIONS AND WARRANTIES. The
Massachusetts Trust represents and warrants to and agrees with the Delaware
Trust as follows:
(a) The Massachusetts Trust is a business trust duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts and has power to own all of its properties and assets and,
subject to the approval of its shareholders as contemplated hereby, to
carry out this Agreement.
(b) The Massachusetts Trust is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company, and such registration has not been revoked or rescinded
and is in full force and effect.
(c) Except as shown on the audited financial statements of each
Current Fund for its most recently completed fiscal period and as incurred
in the ordinary course of the Massachusetts Trust's and each Current Fund's
business since then, neither the Massachusetts Trust nor any Current Fund
has any known liabilities of a material amount, contingent or otherwise,
and there are no material legal, administrative or other proceedings
pending or threatened against the Massachusetts Trust or any Current Fund.
(d) On the Exchange Date, the Massachusetts Trust will have full
right, power and authority to sell, assign, transfer and deliver the assets
to be transferred by it hereunder.
2
<PAGE> 71
3. THE DELAWARE TRUST'S REPRESENTATIONS AND WARRANTIES. The
Delaware Trust
represents and warrants to and agrees with the Massachusetts Trust as follows:
(a) The Delaware Trust is a business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has power to carry on its business as it is now being conducted and to
carry out this Agreement.
(b) The Delaware Trust will register as an open-end management
investment company and adopt the Registration Statement of the
Massachusetts Trust, for purposes of the Securities Act of 1933, as
amended, and the 1940 Act.
(c) Neither the Delaware Trust nor any Successor Fund has any known
liabilities of a material amount, contingent or otherwise, and there are no
material legal, administrative or other proceedings pending or threatened
against the Delaware Trust or any Successor Fund.
(d) At the Exchange Date, the Fund Shares to be issued to the
Massachusetts Trust (the only Fund Shares to be issued as of the Exchange
Date, except for the initial capital, if any, of the Delaware Trust) will
have been duly authorized and, when issued and delivered pursuant to this
Agreement, will be legally and validly issued and will be fully paid and
non-assessable by the Delaware Trust. No Delaware Trust or Successor Fund
shareholder will have any preemptive right of subscription or purchase in
respect thereof.
4. THE DELAWARE TRUST'S CONDITIONS PRECEDENT. The obligations of the
Delaware Trust hereunder shall be subject to the following conditions:
(a) The Massachusetts Trust shall have furnished to the Delaware Trust
a statement of the Massachusetts Trust's assets, including a list of
securities owned by the Massachusetts Trust with their respective tax costs
and values determined as provided in Section l hereof, all as of the
Exchange Date.
(b) As of the Exchange Date, all representations and warranties of the
Massachusetts Trust made in this Agreement shall be true and correct as if
made at and as of such date, and the Massachusetts Trust shall have
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to such date.
(c) For each Current Fund, a vote approving this Agreement and the
transactions and exchange contemplated hereby shall have been adopted by a
"vote of a majority of the outstanding voting securities" (within the
meaning of the 1940 Act and the rules thereunder) of the Current Fund, and
the shareholders of the Massachusetts Trust shall have voted, by the vote
specified in the proxy materials of the Massachusetts Trust and the Current
Funds relating to this Agreement, to direct the Massachusetts Trust to
vote, and the Massachusetts Trust shall have voted by or on the Exchange
Date, as sole shareholder of the Delaware Trust, to elect Robert G. Brown,
Edward P. Campbell, Dr. Harry Gazelle, Dr. Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and Dr. H. Patrick Swygert (or such other persons
who may serve as replacement nominees for such persons in accordance with
such proxy materials) as trustees of the Delaware Trust.
5. THE MASSACHUSETTS TRUST'S CONDITIONS PRECEDENT. The obligations of
the
Massachusetts Trust hereunder shall be subject to the condition that as of the
Exchange Date all representations and warranties of the Delaware Trust made in
this Agreement shall be true and correct as if made at and as of such date, and
that the Delaware Trust shall have complied with all of the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such date.
6. THE DELAWARE TRUST'S AND THE MASSACHUSETTS TRUST'S CONDITIONS
PRECEDENT.
The obligations of both the Delaware Trust and the Massachusetts Trust
hereunder as to any particular Current Fund and its corresponding Successor Fund
shall be subject to the following conditions:
(a) This Agreement and the transactions contemplated hereby shall have
been approved by a "vote of a majority of the outstanding voting
securities" (within the meaning of the 1940 Act and the rules thereunder)
of the Current Fund.
3
<PAGE> 72
(b) The receipt of such authority, including "no-action" letters and
orders from the Securities and Exchange Commission (the "Commission") or
state securities commissions, as may be necessary to permit the parties to
carry out the transactions contemplated by this Agreement shall have been
received.
(c) The Delaware Trust's adoption of the Registration Statement on
Form N-1A under the 1933 Act and the 1940 Act shall have become effective,
and any post-effective amendments to such Registration Statement as are
determined by the Trustees to be necessary and appropriate, shall have been
filed with the Commission and shall have become effective.
(d) The Commission shall not have issued an unfavorable advisory
report under Section 25(b) of the 1940 Act nor instituted nor threatened to
institute any proceeding seeking to enjoin consummation of the
reorganization transactions contemplated hereby under Section 25(c) of the
1940 Act and no other action, suit or other proceeding shall be threatened
or pending before any court or governmental agency which seeks to restrain
or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
Provided, however, that at any time prior to the Exchange Date, any of
the foregoing conditions in this Section 6 may be waived by the parties if,
in the judgment of the parties, such waiver will not have a material
adverse effect on the benefits intended under this Agreement to the
shareholders of the Massachusetts Trust.
7. TERMINATION OF AGREEMENT. As to any Current Fund and its corresponding
Predecessor Fund, this Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Trustees of the
Massachusetts Trust or the Board of Trustees of the Delaware Trust, at any time
prior to the Exchange Date (and notwithstanding any vote of the shareholders of
the Current Fund) if circumstances should develop that, in the opinion of either
the Board of Trustees of the Massachusetts Trust or of the Delaware Trust, make
proceeding with this Agreement inadvisable. In making any such determination as
to any Current Fund and its corresponding Successor Fund, the respective Boards
of Trustees may consider, among other factors, whether approval has been
rendered by shareholders of all (or only some) of the Current Funds.
As to any Current Fund and its corresponding Predecessor Fund, if this
Agreement is terminated and the exchange contemplated hereby is abandoned
pursuant to the provisions of this Section 7, this Agreement shall become void
and have no effect, without any liability on the part of any party hereto or the
trustees, officers or shareholders of the Delaware Trust or the trustees,
officers or shareholders of the Massachusetts Trust, in respect of this
Agreement.
8. WAIVER AND AMENDMENTS. At any time prior to the Exchange Date, any of
the conditions set forth in Section 4 may be waived by the Board of Trustees of
the Massachusetts Trust, and any of the conditions set forth in Section 5 may be
waived by the Board of Trustees of the Delaware Trust, if, in the judgment of
the waiving party, such waiver will not have a material adverse effect on the
benefits intended under this Agreement to the shareholders of the Massachusetts
Trust or the shareholders of the Delaware Trust, as the case may be. In
addition, prior to the Exchange Date, any provision of this Agreement may be
amended or modified by the Board of Trustees of the Massachusetts Trust and
Delaware Trust if such amendment or modification would not have a material
adverse effect upon the benefits intended under this Agreement and would be
consistent with the best interests of shareholders.
9. NO SURVIVAL OF REPRESENTATIONS. None of the representations and
warranties included or provided for herein shall survive consummation of the
transactions contemplated hereby.
10. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of Delaware, without giving effect to principles of
conflict of laws; provided, however, that the due authorization, execution and
delivery of this Agreement, in the case of the Massachusetts Trust, shall be
governed and construed in accordance with the laws of the Commonwealth of
Massachusetts without giving effect to principles of conflict of laws.
4
<PAGE> 73
11. CAPACITY OF TRUSTEES, ETC. With respect to the Massachusetts Trust,
the name "The Victory Portfolios," and "Trustees of The Victory Portfolios,"
refer respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust filed on September 6, 1994 at the office of the
State Secretary of the Commonwealth of Massachusetts which is hereby referred to
and is also on file at the principal office of the Massachusetts Trust. The
obligations of the Massachusetts Trust entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders or representatives of the Massachusetts Trust personally,
but bind only the trust property, and all persons dealing with any Current Fund
of the Massachusetts Trust must look solely to the trust property belonging to
such Current Fund for the enforcement of any claims against the Massachusetts
Trust.
12. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, the Massachusetts Trust and the Delaware Trust have
caused this Agreement and Plan of Conversion and Termination to be executed and
attested on its behalf by its duly authorized representatives as of the date
first above written.
<TABLE>
<S> <C>
THE VICTORY PORTFOLIOS,
a Massachusetts Business Trust
ATTEST: By:
------------------------------ ---------------------------
Title:
THE VICTORY PORTFOLIOS,
a Delaware Business Trust
ATTEST: By:
------------------------------ ---------------------------
Title:
</TABLE>
5
<PAGE> 74
SCHEDULE I
<TABLE>
<CAPTION>
CURRENT FUNDS SUCCESSOR FUNDS
- -------------------------------------------- --------------------------------------------
<S> <C>
Balanced Balanced
Diversified Stock Diversified Stock
Government Mortgage Government Mortgage
Growth Growth
Intermediate Income Intermediate Income
International Growth International Growth
Investment Quality Bond Investment Quality Bond
Limited Term Income Limited Term Income
Ohio Municipal Bond Ohio Municipal Bond
Ohio Regional Stock Ohio Regional Stock
Prime Obligations Prime Obligations
Special Value Special Value
Stock Index Stock Index
Tax-Free Money Market Tax-Free Money Market
U.S. Government Obligations U.S. Government Obligations
Value Value
Financial Reserves Financial Reserves
Fund for Income Fund for Income
Government Bond* Government Bond*
Institutional Money Market** Institutional Money Market**
National Municipal Bond* National Municipal Bond*
New York Tax-Free* New York Tax-Free*
Ohio Municipal Money Market Ohio Municipal Money Market
Special Growth Special Growth
</TABLE>
- ---------------
* Class A and Class B
** Institutional Class and Service Class
6
<PAGE> 75
EXHIBIT B
THE VICTORY PORTFOLIOS
TRUST INSTRUMENT
DATED DECEMBER , 1995
<PAGE> 76
THE VICTORY PORTFOLIOS
TRUST INSTRUMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I -- NAME AND DEFINITIONS.................................................... 1
Section 1.01 Name.............................................................. 1
Section 1.02 Definitions....................................................... 1
ARTICLE II -- BENEFICIAL INTEREST.................................................... 2
Section 2.01 Shares Of Beneficial Interest..................................... 2
Section 2.02 Issuance of Shares................................................ 2
Section 2.03 Register of Shares and Share Certificates......................... 2
Section 2.04 Transfer of Shares................................................ 2
Section 2.05 Treasury Shares................................................... 2
Section 2.06 Establishment of Series and Classes............................... 3
Section 2.07 Investment in the Trust........................................... 3
Section 2.08 Assets and Liabilities of Series.................................. 3
Section 2.09 No Preemptive Rights.............................................. 4
Section 2.10 No Personal Liability of Shareholder.............................. 4
Section 2.11 Assent to Trust Instrument........................................ 4
ARTICLE III -- THE TRUSTEES.......................................................... 4
Section 3.01 Management of the Trust........................................... 4
Section 3.02 Initial Trustees.................................................. 5
Section 3.03 Term of Office.................................................... 5
Section 3.04 Vacancies and Appointments........................................ 5
Section 3.05 Temporary Absence................................................. 5
Section 3.06 Number of Trustees................................................ 6
Section 3.07 Effect of Ending of a Trustee's Service........................... 6
Section 3.08 Ownership of Assets of the Trust.................................. 6
ARTICLE IV -- POWERS OF THE TRUSTEES................................................. 6
Section 4.01 Powers............................................................ 6
Section 4.02 Issuance and Repurchase of Shares................................. 8
Section 4.03 Trustees and Officers as Shareholders............................. 8
Section 4.04 Action by the Trustees............................................ 8
Section 4.05 Chairman of the Trustees.......................................... 9
Section 4.06 Principal Transactions............................................ 9
ARTICLE V -- EXPENSES OF THE TRUST................................................... 9
ARTICLE VI -- INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
ADMINISTRATOR AND TRANSFER
AGENT.............................................................................. 9
Section 6.01 Investment Adviser................................................ 9
Section 6.02 Principal Underwriter............................................. 10
Section 6.03 Administration.................................................... 10
Section 6.04 Transfer Agent.................................................... 10
Section 6.05 Parties to Contract............................................... 10
Section 6.06 Provisions and Amendments......................................... 11
</TABLE>
i
<PAGE> 77
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE VII -- SHAREHOLDERS' VOTING POWERS AND MEETINGS..............................
11
Section 7.01 Voting Powers..................................................... 11
Section 7.02 Meetings.......................................................... 11
Section 7.03 Quorum and Required Vote.......................................... 12
ARTICLE VIII -- CUSTODIAN............................................................ 12
Section 8.01 Appointment and Duties............................................ 12
Section 8.02 Central Certificate System........................................ 13
ARTICLE IX -- DISTRIBUTIONS AND REDEMPTIONS.......................................... 13
Section 9.01 Distributions..................................................... 13
Section 9.02 Redemptions....................................................... 13
Section 9.03 Determination of Net Asset Value and Valuation of Portfolio
Assets......................................................................... 13
Section 9.04 Suspension of the Right of Redemption............................. 14
Section 9.05 Redemption of Shares in Order to Qualify as Regulated
Investment Company............................................... 14
ARTICLE X -- LIMITATION OF LIABILITY AND INDEMNIFICATION.............................
15
Section 10.01 Limitation of Liability........................................... 15
Section 10.02 Indemnification................................................... 15
Section 10.03 Shareholders...................................................... 16
ARTICLE XI -- MISCELLANEOUS.......................................................... 16
Section 11.01 Trust Not A Partnership........................................... 16
Section 11.02 Trustee's Good Faith Action, Expert Advice, No Bond or Surety..... 16
Section 11.03 Establishment of Record Dates..................................... 16
Section 11.04 Termination of Trust.............................................. 17
Section 11.05 Reorganization.................................................... 17
Section 11.06 Filing of Copies, References, Headings............................ 18
Section 11.07 Applicable Law.................................................... 18
Section 11.08 Amendments........................................................ 18
Section 11.09 Fiscal Year....................................................... 19
Section 11.10 Name Reservation.................................................. 19
Section 11.11 Provisions in Conflict With Law................................... 19
</TABLE>
ii
<PAGE> 78
THE VICTORY PORTFOLIOS
DECEMBER , 1995
TRUST INSTRUMENT, made by Robert G. Brown, Edward P. Campbell, Harry
Gazelle, Thomas F. Morrissey, Stanley I. Landgraf, Leigh A. Wilson and H.
Patrick Swygert and (the "Trustees").
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto;
NOW THEREFORE, the Trustees declare that all money and property contributed
to the trust hereunder shall be held and managed in trust under this Trust
Instrument as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.01 NAME. The name of the trust created hereby is "The Victory
Portfolios."
SECTION 1.02 DEFINITIONS. Wherever used herein, unless otherwise required
by the context or specifically provided:
(a) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time. Whenever reference is made hereunder to the 1940
Act, such references shall be interpreted as including any applicable order
or orders of the Commission or any rules or regulations adopted by the
Commission thereunder or interpretive releases of the Commission staff;
(b) "Bylaws" means the Bylaws of the Trust as adopted by the Trustees,
as amended from time to time;
(c) "Commission" has the meaning given it in the 1940 Act. In
addition, "Affiliated Person," "Assignment," "Interested Person" and
"Principal Underwriter" shall have the respective meanings given to them
under the 1940 Act. "Majority Shareholder Vote" shall have the same meaning
as the term "vote of a majority of the outstanding voting securities" under
the 1940 Act;
(d) "Delaware Act" refers to Chapter 38 of Title 12 of the Delaware
Code entitled "Treatment of Delaware Business Trusts," as amended from time
to time;
(e) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article IX, Section 9.03 hereof;
(f) "Outstanding Shares" means those Shares shown from time to time in
the books of the Trust or its transfer agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the treasury of
the Trust;
(g) "Series" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.06 hereof;
(h) "Shareholder" means a record owner of Outstanding Shares of the
Trust;
(i) "Shares" means the equal proportionate transferable units of
beneficial interest into which the beneficial interest of each Series of
the Trust or class thereof shall be divided and may include fractions of
Shares as well as whole Shares;
(j) The "Trust" means The Victory Portfolios, a Delaware business
trust, and reference to the Trust when applicable to one or more Series of
the Trust, shall refer to any such Series;
(k) The "Trustees" means the person or persons who has or have signed
this Trust Instrument so long as he or they shall continue in office in
accordance with the terms hereof and all other persons who may from time to
time be duly qualified and serving as Trustees in accordance with the
provisions of
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Article III hereof, and reference herein to a Trustee or to the Trustees
shall refer to the individual Trustees in their respective capacity as
Trustees hereunder;
(l) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of one
or more of the Trust or any Series, or the Trustees on behalf of the Trust
or any Series.
ARTICLE II
BENEFICIAL INTEREST
SECTION 2.01 SHARES OF BENEFICIAL INTEREST. The beneficial interest in the
Trust shall be divided into such Shares of one or more separate and distinct
Series or classes of a Series as set forth in Section 2.06 or as the Trustees
shall otherwise from time to time create and establish as provided in Section
2.06. The number of Shares of each Series and class thereof authorized hereunder
is unlimited. Each Share shall have no par value. All Shares issued hereunder,
including without limitation Shares issued in connection with a dividend paid in
Shares or a split or reverse split of Shares, shall be fully paid and
nonassessable.
SECTION 2.02 ISSUANCE OF SHARES. The Trustees in their discretion may, from
time to time, without a vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, subject to
applicable law, including cash or securities, at such time or times, and on such
terms as the Trustees may deem appropriate, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with,
the assumption of liabilities) and businesses all of which shall be valued in
accordance with Article IX, Section 9.03, except as otherwise provided in
Section 2.07. In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The Trustees may from time to
time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1000th of a Share or integral multiples thereof. The
Trustees or any person the Trustees may authorize for the purpose may, in their
discretion, reject any application for the issuance of shares.
SECTION 2.03 REGISTER OF SHARES AND SHARE CERTIFICATES. A register shall
be
kept at the principal office of the Trust or an office of the Trust's transfer
agent which shall contain the names and addresses of the Shareholders of each
Series, the number of Shares of that Series (or any class or classes thereof)
held by them respectively and a record of all transfers thereof. No share
certificates shall be issued by the Trust except as the Trustees may otherwise
authorize, and the persons indicated as shareholders in such register shall be
entitled to receive dividends or other distributions and otherwise exercise or
enjoy the rights of Shareholders. No Shareholder shall be entitled to receive
payment of any dividend or other distribution, nor to have notice given to him
as herein or in the Bylaws provided, until he has given his address to the
transfer agent or such officer or other agent of the Trustees as shall keep the
said register for entry thereon.
SECTION 2.04 TRANSFER OF SHARES. Except as otherwise provided by the
Trustees, Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereunto duly authorized in writing, upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer and such evidence of the genuineness of such execution
and authorization and of such other matters as may be required by the Trustees.
Upon such delivery the transfer shall be recorded on the register of the Trust.
Until such record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereunder and neither the Trustees nor
the Trust, nor any transfer agent or registrar nor any officer, employee or
agent of the Trust shall be affected by any notice of the proposed transfer.
SECTION 2.05 TREASURY SHARES. Shares held in the treasury shall, until
reissued pursuant to Section 2.02 hereof, not confer any voting rights on the
Trustees, nor shall such Shares be entitled to any dividends or other
distributions declared with respect to the Shares.
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SECTION 2.06 ESTABLISHMENT OF SERIES AND CLASSES. The Trust created hereby
shall consist initially of the twenty-four Series identified on Schedule A
attached hereto, each of which corresponds to a series of shares of The Victory
Portfolios, a Massachusetts business trust (the "Predecessor Trust"), and each
Series shall initially consist of such classes of Shares as are designated on
Schedule A (and any additional classes which are subsequently created by the
Predecessor Trust prior to the exchange of the Predecessor Trust's assets for
shares of the Trust), which shall correspond to classes of the respective series
of the Predecessor Trust as of the date of such exchange. Distinct records shall
be maintained by the Trust for each Series and the assets associated with each
Series shall be held and accounted for separately from the assets of the Trust
or any other Series. The Trustees shall have full power and authority, in their
sole discretion and without obtaining any prior authorization or vote of the
Shareholders of any Series, to establish and designate and to change in any
manner any Series or any classes of initial or additional Series and to fix such
preferences, voting powers, rights and privileges of such Series or classes
thereof as the Trustees may from time to time determine, to divide or combine
the Shares or any Series or classes thereof into a greater or lesser number, to
classify or reclassify any issued Shares or any Series or classes thereof into
one or more Series or classes of Shares, and to take such other action with
respect to the Shares as the Trustees may deem desirable. The establishment and
designation of any Series (other than those established pursuant to the first
sentence of this Section 2.06) shall be effective upon the adoption of a
resolution by a majority of the Trustees setting forth such establishment and
designation and the relative rights and preferences of the Shares of such
Series. A Series may issue any number of Shares, but need not issue Shares. At
any time that there are no Shares outstanding of any particular Series
previously established and designated, the Trustees may by a majority vote
abolish that Series and the establishment and designation thereof.
All references to Shares in this Trust Instrument shall be deemed to be
Shares of any or all Series, or classes thereof, as the context may require. All
provisions herein relating to the Trust shall apply equally to each Series of
the Trust, and each class thereof, except as the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his proportionate share of all distributions made
with respect to such Series, based upon the number of full and fractional Shares
of the Series held. Upon redemption of his Shares, such Shareholder shall be
paid solely out of the funds and property of such Series of the Trust.
SECTION 2.07 INVESTMENTS IN THE TRUST. Investments in a Series shall be
credited to each Shareholder's account in the form of full and fractional Shares
at the Net Asset Value per Share next determined after the investment is
received or accepted as may be determined by the Trustees; provided, however,
that the Trustees may, in their sole discretion, (a) fix minimum amounts for
initial and subsequent investments, (b) impose a sales charge upon investments
in such manner and at such time determined by the Trustees, (c) fix an initial
offering price at which to offer subscriptions for investments in any newly
established Series, (d) effect offers of exchange in accordance with Section 11
of the 1940 Act or effect reorganizations in accordance with Section 11(b) of
the 1940 Act, in connection with which the issuance of Shares may be effected,
under Section 22(d) of the 1940 Act, at a Net Asset Value already determined or
(e) otherwise issue shares for a consideration other than the Net Asset Value
next determined to the extent permissible under the 1940 Act and other
applicable laws.
SECTION 2.08 ASSETS AND LIABILITIES OF SERIES. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may be,
shall be held and accounted for separately from the other assets of the Trust
and of every other Series and may be referred to herein as "assets belonging to"
that Series. The assets belonging to a particular Series shall belong to that
Series for all purposes, and to no other Series, and shall be subject only to
the rights of creditors of that Series. In addition, any assets, income,
earnings, profits or funds, or payments and proceeds with respect thereto, which
are not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more of the Series in such
manner as the Trustees, in their sole discretion, deem fair and equitable. Each
such allocation shall be conclusive and binding
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upon the Shareholders of all Series for all purposes, and such assets, income,
earnings, profits or funds, or payments and proceeds with respect thereto shall
be assets belonging to that Series. The assets belonging to a particular Series
shall be so recorded upon the books of the Trust, and shall be held by the
Trustees in trust for the benefit of the holders of Shares of that Series. The
assets belonging to each particular Series shall be charged with the liabilities
of that Series and all expenses, costs, charges and reserves attributable to
that Series. Any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees between or among any one
or more of the Series in such manner as the Trustees in their sole discretion
deem fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series for all purposes. Without limitation of the
foregoing provisions of this Section 2.08, but subject to the right of the
Trustees in their discretion to allocate general liabilities, expenses, costs,
charges or reserves as herein provided, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular Series shall be enforceable against the assets of such Series only,
and not against the assets of the Trust generally. Notice of this contractual
limitation on inter-Series liabilities may, in the Trustee's sole discretion, be
set forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section 3804 of
the Delaware Act relating to limitations on inter-Series liabilities (and the
statutory effect under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and each Series. Any
person extending credit to, contracting with or having any claim against any
Series may look only to the assets of that Series to satisfy or enforce any
debt, with respect to that Series. No Shareholder or former Shareholder of any
Series shall have a claim on or any right to any assets allocated or belonging
to any other Series.
SECTION 2.09 NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other securities issued by
the Trust or the Trustees, whether of the same or other Series.
SECTION 2.10 NO PERSONAL LIABILITY OF SHAREHOLDER. No Shareholder shall be
personally liable for the debts, liabilities, obligations or expenses incurred
by, contracted for, or otherwise existing with respect to, the Trust or by or on
behalf of any Series. The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of money
or assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay by way of subscription for any Shares or otherwise.
Every note, bond, contract or other understanding issued by or on behalf of the
Trust or the Trustees relating to the Trust or to a Series may include a
recitation limiting the obligation represented thereby to the Trust or to one or
more Series and its or their assets (but the omission of such a recitation shall
not operate to bind any Shareholder or Trustee of the Trust).
SECTION 2.11 ASSENT TO TRUST INSTRUMENT. Every Shareholder, by virtue of
having purchased a Share or by virtue of having received a Share in connection
with the conversion of the Predecessor Trust, shall become a Shareholder and
shall be held to have expressly assented and agreed to be bound by the terms
hereof.
ARTICLE III
THE TRUSTEES
SECTION 3.01 MANAGEMENT OF THE TRUST. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business of the Trust
to the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Trust Instrument. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any foreign jurisdiction and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically
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mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
this Trust Instrument, the presumption shall be in favor of a grant of power to
the Trustees.
The enumeration of any specific power in this Trust Instrument shall not be
construed as limiting the aforesaid power. The powers of the Trustees may be
exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III, the Trustees shall be elected by
the Shareholders owning of record a plurality of the Shares voting at a meeting
of Shareholders. Any Shareholder meeting held for such purpose shall be held on
a date fixed by the Trustees. In the event that less than a majority of the
Trustees holding office have been elected by Shareholders, the Trustees then in
office will call a Shareholders' meeting for the election of Trustees in
accordance with the provisions of the 1940 Act.
SECTION 3.02 INITIAL TRUSTEES. The initial Trustees shall be the persons
named herein as Trustees. The (i) election of Trustees and (ii) an approval of
the Plan of Conversion with respect to the initial Series of the Trust for the
transfer of assets from the Predecessor Trust to the Trust, at the Special
Meeting of the Shareholders of the Predecessor Trust to be conducted in
accordance with the Proxy Statement of the Predecessor Trust dated October 31,
1995, shall be deemed to constitute an election of Trustees for all purposes
hereunder, including for purposes of the last sentence of Section 3.01.
SECTION 3.03 TERM OF OFFICE. The Trustees shall hold office during the
lifetime of this Trust, and until its termination as herein provided; except (a)
that any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery or
upon such later date as is specified therein; (b) that any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing to be
retired or who has died, become physically or mentally incapacitated by reason
of illness or otherwise, or is otherwise unable to serve, may be retired by
written instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) that a Trustee may be removed at any meeting of
the Shareholders of the Trust by a vote of Shareholders owning at least
two-thirds of the Outstanding Shares of the Trust.
SECTION 3.04 VACANCIES AND APPOINTMENTS. In case of a Trustee's
declination to serve, death, resignation, retirement, removal, physical or
mental incapacity by reason of illness, disease or otherwise, or if a Trustee is
otherwise unable to serve, or if there is an increase in the number of Trustees,
a vacancy shall occur. Whenever a vacancy in the Board of Trustees shall occur,
until such vacancy is filled, the other Trustees shall have all the powers
hereunder and the certificate of the other Trustees of such vacancy shall be
conclusive. In the case of a vacancy, the remaining Trustees shall fill such
vacancy by appointing such other person as they in their discretion see fit, to
the extent consistent with the limitations provided under the 1940 Act. Such
appointment shall be evidenced by a written instrument signed by a majority of
the Trustees in office or by resolution of the Trustees, duly adopted, which
shall be recorded in the minutes of a meeting of the Trustees, whereupon the
appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any person
appointed as a Trustee pursuant to this Section 3.04 shall have accepted this
Trust, the trust estate shall vest in the new Trustee or Trustees, together with
the continuing Trustees, without any further act or conveyance, and such person
shall be deemed a Trustee.
SECTION 3.05 TEMPORARY ABSENCE. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any time to any
other Trustee or Trustees, provided that in no case shall fewer than two
Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.
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SECTION 3.06 NUMBER OF TRUSTEES. The number of Trustees shall be at least
three (3), and thereafter shall be such number as shall be fixed from time to
time by a majority of the Trustees, provided, however, that the number of
Trustees shall in no event be more than twelve (12).
SECTION 3.07 EFFECT OF ENDING OF A TRUSTEE'S SERVICE. The declination to
serve, death, resignation, retirement, removal, incapacity, or inability of the
Trustees, or any one of them, shall not operate to terminate the trust or to
revoke any existing agency created pursuant to the terms of this Trust
Instrument.
SECTION 3.08 OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust and
of each Series shall be held separate and apart from any assets now or hereafter
held in any capacity other than as Trustee hereunder by the Trustees or any
successor Trustees. Legal title in all of the assets of the Trust and the right
to conduct any business shall at all times be considered as vested in the
Trustees on behalf of the Trust, except that the Trustees may cause legal title
to any Trust Property to be held by, or in the name of, the Trust or in the name
of any person as nominee. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or of any Series or any right of
partition or possession thereof but each Shareholder shall have, except as
otherwise provided for herein, a proportionate undivided beneficial interest in
the Trust or Series based upon the number of Shares owned. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument.
ARTICLE IV
POWERS OF THE TRUSTEES
SECTION 4.01 POWERS. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust. The
Trustees shall not in any way be bound or limited by present or future laws or
customs in regard to trust investments, but shall have full authority and power
to make any and all investments which they, in their sole discretion, shall deem
proper to accomplish the purpose of this Trust without recourse to any court or
other authority. Subject to applicable laws and any applicable limitation in
this Trust Instrument or the Bylaws of the Trust, the Trustees shall have the
power and authority:
(a) To invest and reinvest cash and other property (including
investment, notwithstanding any other provision hereof, of all of the
assets of any Series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company), and to hold cash or other
property of the Trust uninvested, without in any event being bound or
limited by any present or future law or custom in regard to investments by
trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust:
(b) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of
such operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee,
or undertake the performance of an obligation or engagement of any other
person and to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or
by the Trust itself, or both, or otherwise pursuant to a plan of
distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Trust Instrument
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent that they do not reserve that right to the
Shareholders; such Bylaws shall be deemed incorporated and included in this
Trust Instrument;
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(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to
any conditions set forth in this Trust Instrument or in the Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager, custodian,
underwriter or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article XI, subsection 11.04(b) hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and
deliver powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable
form; or either in the name of the Trust or in the name of a custodian or a
nominee or nominees, subject in either case to proper safeguards according
to the usual practice of Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish
classes of such Series having relative rights, powers and duties as they
may provide consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular
Series or to apportion the same between or among two or more Series,
provided that any liabilities or expenses incurred by a particular Series
shall be payable solely out of the assets belonging to that Series as
provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern, and to pay
calls or subscriptions with respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(s) To make distributions of income and of capital gains to
Shareholders in the manner provided herein;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Series or class, and to require
the redemption of the Shares of any Shareholders whose investment is less
than such minimum upon giving notice to such Shareholder;
(u) To establish one or more committees, to delegate any of the powers
of the Trustees to said committees and to adopt a committee charter
providing for such responsibilities, membership (including Trustees,
officers or other agents of the Trust therein) and any other
characteristics of said committees as the Trustees may deem proper.
Notwithstanding the provisions of this Article IV, and in addition to such
provisions or any other provision of this Trust Instrument or of the
Bylaws, the Trustees may by resolution
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appoint a committee consisting of less than the whole number of Trustees
then in office, which committee may be empowered to act for and bind the
Trustees and the Trust, as if the acts of such committee were the acts of
all the Trustees then in office, with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any action,
suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body;
(v) To interpret the investment policies, practices or limitations of
any Series;
(w) To establish a registered office and have a registered agent in
the state of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the attainment
of any object or the furtherance of any power hereinbefore set forth,
either alone or in association with others, and to do every other act or
thing incidental or appurtenant to or growing out of or connected with the
aforesaid business or purposes, objects or powers.
The foregoing clauses shall be construed as objects and powers, and the
foregoing enumeration of specific powers shall not be held to limit or restrict
in any manner the general powers of the Trustees. Any action by one or more of
the Trustees in their capacity as such hereunder shall be deemed an action on
behalf of the Trust or the applicable Series, and not an action in an individual
capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see the application of
any payments made or property transferred to the Trustees or upon their order.
SECTION 4.02 ISSUANCE AND REPURCHASE OF SHARES. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares and, subject to the
provisions set forth in Article II and Article IX, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust, or the particular Series of the Trust, with
respect to which such Shares are issued.
SECTION 4.03 TRUSTEES AND OFFICERS AS SHAREHOLDERS. Any Trustee, officer
or other agent of the Trust may acquire, own and dispose of Shares to the same
extent as if he were not a Trustee, officer or agent; and the Trustees may issue
and sell or cause to be issued and sold Shares to and buy such Shares from any
such person or any firm or company in which he is interested, subject only to
the general limitations herein contained as to the sale and purchase of such
Shares; and all subject to any restrictions which may be contained in the
Bylaws.
SECTION 4.04 ACTION BY THE TRUSTEES. In any action taken by the Trustees
hereunder, unless otherwise specified, the Trustees shall act by majority vote
at a meeting duly called at which a quorum is present, by written consent
without a meeting signed by a majority of the Trustees, or by telephonic meeting
provided a quorum of Trustees participate in any such telephone meeting, unless
the 1940 Act requires that a particular action be taken only at a meeting at
which the Trustees are present in person. At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the Trustees may
be called orally or in writing by the Chairman of the Board of Trustees or by
any two other Trustees. Notice of the time, date and place of all meetings of
the Trustees shall be given by the person calling the meeting to each Trustee by
telephone, facsimile or other electronic mechanism sent to his home or business
address at least twenty-four hours in advance of the meeting or by written
notice mailed to his home or business address at least seventy-two hours in
advance of the meeting. Notice need not be given to any Trustee who attends the
meeting without objecting to the lack of notice or who executes a written waiver
of notice with respect to the meeting. Any meeting conducted by telephone shall
be deemed to take place at the principal office of the Trust, as determined by
the Bylaws or by the Trustees. Subject to the requirements of the 1940 Act, the
Trustees by majority vote may delegate to any one or more of their number their
authority to approve particular matters or take particular actions on behalf of
the Trust. Written consents or waivers of the Trustees may be executed in
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one or more counterparts. Execution of a written consent or waiver and delivery
thereof to the Trust may be accomplished by facsimile or other similar
electronic mechanism.
SECTION 4.05 CHAIRMAN OF THE TRUSTEES. The Trustees shall appoint one of
their number to be Chairman of the Board of Trustees. The Chairman shall preside
at all meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the Trust, and
may be (but is not required to be) the chief executive, financial and/or
accounting officer of the Trust. In lieu of appointing a Chairman, the Trustees
may appoint a President, who shall exercise the right and duties of the
Chairman.
SECTION 4.06 PRINCIPAL TRANSACTIONS. Except to the extent prohibited by
applicable law, the Trustees may, on behalf of the Trust, buy any securities
from or sell any securities to, or lend any assets of the Trust to, any Trustee
or officer of the Trust or any firm of which any such Trustee or officer is a
member acting as principal, or have any such dealings with any investment
adviser, administrator, distributor or transfer agent for the Trust or with any
Interested Person of such person; and the Trust may employ any such person, or
firm or company in which such person is an Interested Person, as broker, legal
counsel, registrar, investment adviser, administrator, distributor, transfer
agent, dividend disbursing agent, custodian or in any other capacity upon
customary terms.
ARTICLE V
EXPENSES OF THE TRUST
Subject to the provisions of Article II, Section 2.08 hereof, the Trustees
shall be reimbursed from the Trust estate or the assets belonging to the
appropriate Series for their expenses and disbursements in connection with their
serving as Trustees, including, without limitation, interest charges, taxes,
brokerage fees and commissions; expenses of issue, repurchase and redemption of
Shares; certain insurance premiums; applicable fees, interest charges and
expenses of third parties, including the Trust's investment advisers, managers,
administrators, distributors, custodian, transfer agent and fund accountant;
fees of pricing, interest, dividend, credit and other reporting services; costs
of membership in trade associations; telecommunications expenses; funds
transmission expenses; auditing, legal and compliance expenses; costs of forming
the Trust and maintaining its existence; costs of preparing and printing the
Trust's prospectuses, statements of additional information and shareholder
reports and delivering them to existing Shareholders; expenses of meetings of
Shareholders and proxy solicitations therefor; costs of maintaining books and
accounts; costs of reproduction, stationery and supplies; fees and expenses of
the Trustees; compensation of the Trust's officers and employees and costs of
other personnel performing services for the Trust; costs of Trustee meetings;
Commission registration fees and related expenses; state or foreign securities
laws registration fees and related expenses and for such non-recurring items as
may arise, including litigation to which the Trust (or a Trustee acting as such)
is a party, and for all losses and liabilities by them incurred in administering
the Trust, and for the payment of such expenses, disbursements, losses and
liabilities the Trustees shall have a lien on the assets belonging to the
appropriate Series, or in the case of an expense allocable to more than one
Series, on the assets of each such Series, prior to any rights or interests of
the Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VI
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
ADMINISTRATOR AND TRANSFER AGENT
SECTION 6.01 INVESTMENT ADVISER.
(a) The Trustees may in their discretion, from time to time, enter
into an investment advisory contract or contracts with respect to the Trust
or any Series whereby the other party or parties to such contract or
contracts shall undertake to furnish the Trustees with such investment
advisory, statistical and research facilities and services and such other
facilities and services, if any, all upon such terms and conditions
(including any Shareholder vote) that may be required under the 1940 Act,
as may be
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prescribed in the Bylaws, or as the Trustees may in their discretion
determine (such terms and conditions not to be inconsistent with the
provisions of this Trust Instrument or of the Bylaws). Notwithstanding any
other provision of this Trust Instrument, the Trustees may authorize any
investment adviser (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or
exchanges of portfolio securities, other investment instruments of the
Trust, or other Trust Property on behalf of the Trustees, or may authorize
any officer, agent, or Trustee to effect such purchases, sales or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales and exchanges
shall be deemed to have been authorized by all of the Trustees.
(b) The Trustees may authorize the investment adviser to employ, from
time to time, one or more sub-advisers to perform such of the acts and
services of the investment adviser, and upon such terms and conditions, as
may be agreed upon between the investment adviser and subadviser (such
terms and conditions not to be inconsistent with the provisions of this
Trust Instrument or of the Bylaws). Any reference in this Trust Instrument
to the investment adviser shall be deemed to include such sub-advisers,
unless the context otherwise requires; provided that no Shareholder
approval shall be required with respect to any sub-adviser unless required
under the 1940 Act or other law, contract or order applicable to the Trust.
SECTION 6.02 PRINCIPAL UNDERWRITER. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive underwriting contract
or contracts providing for the sale of Shares, whereby the Trust may either
agree to sell Shares to the other party to the contract or appoint such other
party its sales agent for such Shares. In either case, the contract shall be on
such terms and conditions as may be prescribed in the Bylaws and as the Trustees
may in their discretion determine (such terms and conditions not to be
inconsistent with the provisions of this Trust Instrument or of the Bylaws); and
such contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
SECTION 6.03 ADMINISTRATION. The Trustees may in their discretion from
time to time enter into one or more management or administrative contracts
whereby the other party or parties shall undertake to furnish the Trustees with
management or administrative services. The contract or contracts shall be on
such terms and conditions as may be prescribed in the Bylaws and as the Trustees
may in their discretion determine (such terms and conditions not to be
inconsistent with the provisions of this Trust Instrument or of the Bylaws).
SECTION 6.04 TRANSFER AGENT. The Trustees may in their discretion from
time to time enter into one or more transfer agency and shareholder service
contracts whereby the other party or parties shall undertake to furnish the
Trustees with transfer agency and shareholder services. The contract or
contracts shall be on such terms and conditions as may be prescribed in the
Bylaws and as the Trustees may in their discretion determine (such terms and
conditions not to be inconsistent with the provisions of this Trust Instrument
or of the Bylaws).
SECTION 6.05 PARTIES TO CONTRACT. Any contract of the character described
in Sections 6.01, 6.02, 6.03 and 6.04 of this Article VI or any contract of the
character described in Article VIII hereof may be entered into with any
corporation, firm, partnership, trust or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered void or voidable by reason of the existence of
any relationship, nor shall any person holding such relationship be disqualified
from voting on or executing the same in his capacity as Shareholder and/or
Trustee, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was not
inconsistent with the provisions of this Article VI or Article VIII hereof or of
the Bylaws. The same person (including a corporation, firm, partnership, trust,
or association) may be the other party to contracts entered into pursuant to
Sections 6.01, 6.02, 6.03 and 6.04 of this Article VI or pursuant to Article
VIII hereof and any individual may be financially interested or otherwise
affiliated with persons who are parties to any or all of the contracts mentioned
in this Section 6.05.
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SECTION 6.06 PROVISIONS AND AMENDMENTS. Any contract entered into pursuant
to Section 6.01 or 6.02 of this Article VI shall be consistent with and subject
to the requirements of Section 15 of the 1940 Act, if applicable, or other
applicable Act of Congress hereafter enacted with respect to its continuance in
effect, its termination, and the method of authorization and approval of such
contract or renewal thereof, and no amendment to any contract entered into
pursuant to Section 6.01 of this Article VI shall be effective unless assented
to in a manner consistent with the requirements of said Section 15 of the 1940
Act, if applicable.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.01 VOTING POWERS.
(a) The Shareholders shall have power to vote only (a) for the
election of Trustees to the extent provided in Article III, Section 3.01
hereof, (b) for the removal of Trustees to the extent provided in Article
III, Section 3.03(d) hereof, (c) with respect to any investment advisory
contract to the extent provided in Article VI, Section 6.01 hereof, (d)
with respect to an amendment of this Trust Instrument, to the extent
provided in Article XI, Section 11.08, and (e) with respect to such
additional matters relating to the Trust as may be required by law, by an
express provision of this Trust Instrument, or any registration of the
Trust with the Commission or any State, or as the Trustees may consider
desirable.
(b) Notwithstanding paragraph (a) of this Section 7.01 or any other
provision of this Trust Instrument (including the Bylaws) which would by
its terms provide for or require a vote of Shareholders, the Trustees may
take action without a Shareholder vote if (i) the Trustees shall have
obtained an opinion of counsel that a vote or approval of such action by
Shareholders is not required under (i) the 1940 Act or any other applicable
laws, or (ii) any registrations, undertakings or agreements of the Trust
known to such counsel, and the taking of such action without a Shareholder
vote would be consistent with the best interests of the Shareholders.
(c) On any matter submitted to a vote of the Shareholders, all Shares
shall be voted separately by individual Series, and whenever the Trustees
determine that the matter affects only certain Series, may be submitted for
a vote by only such Series, except (i) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series; and
(ii) when the Trustees have determined that the matter affects the
interests of more than one Series and that voting by shareholders of all
Series would be consistent with the 1940 Act, then the Shareholders of all
such Series shall be entitled to vote thereon (either by individual Series
or by Shares voted in the aggregate, as the Trustees in their discretion
may determine). The Trustees may also determine that a matter affects only
the interests of one or more classes of a Series, in which case (or if
required under the 1940 Act) such matter shall be voted on by such class or
classes. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote, and each fractional Share shall be entitled
to a proportionate fractional vote. There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by proxy or in
any manner provided for in the Bylaws. A proxy may be given in writing. The
Bylaws may provide that proxies may also, or may instead, be given by any
electronic or telecommunications device or in any other manner permitted by
applicable law. Notwithstanding anything else herein or in the Bylaws, in
the event a proposal by anyone other than the officers or Trustees of the
Trust is submitted to a vote of the Shareholders, or in the event of any
proxy contest or proxy solicitation or proposal in opposition to any
proposal by the officers or Trustees of the Trust, Shares may be voted only
in person or by written proxy. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required or
permitted by law, this Trust Instrument or any of the Bylaws of the Trust
to be taken by Shareholders.
SECTION 7.02 MEETINGS. The Shareholders' meeting held in order to elect
the initial Trustees shall be the meeting of the Shareholders of the Predecessor
Trust referred to in Section 3.02 of Article III hereof. Meetings may be held
within or without the State of Delaware. Special meetings of the Shareholders of
any Series may be called by the Trustees and shall be called by the Trustees
upon the written request of
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Shareholders owning at least one tenth of the Outstanding Shares of the Trust
entitled to vote. Whenever ten or more Shareholders meeting the qualifications
set forth in Section 16(c) of the 1940 Act, as the same may be amended from time
to time, seek the opportunity of furnishing materials to the other Shareholders
with a view to obtaining signatures on such a request for a meeting, the
Trustees shall comply with the provisions of said Section 16(c) with respect to
providing such Shareholders access to the list of the Shareholders of record of
the Trust or the mailing of such materials to such Shareholders of record,
subject to any rights provided to the Trust or any Trustees provided by said
Section 16(c). Notice shall be sent, by First Class Mail or such other means
determined by the Trustees, at least 10 days prior to any such meeting.
Notwithstanding anything to the contrary in this Section 7.02, the Trustees
shall not be required to call a special meeting of the Shareholders of any
Series or to provide Shareholders seeking the opportunity of furnishing the
materials to other Shareholders with a view to obtaining signatures on a request
for a meeting except to the extent required under the 1940 Act.
SECTION 7.03 QUORUM AND REQUIRED VOTE. One-third of Shares outstanding and
entitled to vote in person or by proxy as of the record date for a Shareholders'
meeting shall be a quorum for the transaction of business at such Shareholders'
meeting, except that where any provision of law or of this Trust Instrument
permits or requires that holders of any Series shall vote as a Series (or that
holders of a class shall vote as a class), then one-third of the aggregate
number of Shares of that Series (or that class) entitled to vote shall be
necessary to constitute a quorum for the transaction of business by that Series
(or that class). Any meeting of Shareholders may be adjourned from time to time
by a majority of the votes properly cast upon the question of adjourning a
meeting to another date and time, whether or not a quorum is present. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting, without the necessity of further notice.
Except when a larger vote is required by law or by any provision of this Trust
Instrument or the Bylaws, a majority of the Shares voted in person or by proxy
shall decide any questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Trust Instrument permits or requires that
the holders of any Series shall vote as a Series (or that the holders of any
class shall vote as a class), then a majority of the Shares present in person or
by proxy of that Series (or class), voted on the matter in person or by proxy
shall decide that matter insofar as that Series (or class) is concerned.
Shareholders may act by a written consent signed by Shareholders holding not
less than the minimum number of Shares as would be necessary to authorize the
action at a meeting at which all Shareholders entitled to vote thereon were
present and voted, to the extent not inconsistent with the 1940 Act, and any
such actions taken by a Series (or class) may be consented to in writing by
Shareholders of that Series (or class).
ARTICLE VIII
CUSTODIAN
SECTION 8.01 APPOINTMENT AND DUTIES. The Trustees shall employ a bank, a
company that is a member of a national securities exchange, or a trust company,
that in each case shall have such capital, surplus and/or undivided profits as
may be required under the 1940 Act and that is a member of the Depository Trust
Company (or such other person or entity as may be permitted to act as custodian
of the Trust's assets under the 1940 Act) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements, if
any, as may be contained in the Bylaws of the Trust: (a) to hold the securities
owned by the Trust and deliver the same upon written order or oral order
confirmed in writing; (b) to receive and receipt for any moneys due to the Trust
and deposit the same in its own banking department or elsewhere as the Trustees
may direct; and (c) to disburse such funds upon orders or vouchers.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank, a company that is a member of a
national securities exchange, or a trust company organized under the laws of the
United States or one of the states thereof and having capital, surplus and
undivided profits of at least twenty million dollars ($20,000,000) and that is a
member of
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the Depository Trust Company or such other person or entity as may be permitted
by the Commission or is otherwise able to act as custodian of the Trust's assets
in accordance with the 1940 Act.
SECTION 8.02 CENTRAL CERTIFICATE SYSTEM. Subject to the 1940 Act and such
other rules, regulations and orders as the Commission may adopt, the Trustees
may direct the custodian to deposit all or any part of the securities owned by
the Trust in a system for the central handling of securities established by a
national securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934, as amended, or
such other person as may be permitted by the Commission, or otherwise in
accordance with the 1940 Act, pursuant to which system all securities of any
particular class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of such securities, provided that all such deposits shall be
subject to withdrawal only upon the order of the Trust or its custodians,
sub-custodians or other agents.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
SECTION 9.01 DISTRIBUTIONS.
(a) The Trustees may from time to time declare and pay dividends or
other distributions with respect to any Series and/or class of a Series.
The amount of such dividends or distributions and the payment of them and
whether they are in cash or any other Trust Property shall be wholly in the
discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other
distribution or to the Shareholders of record at such other date or time or
dates or times as the Trustees shall determine, which dividends or
distributions, at the election of the Trustees, may be paid pursuant to a
standing resolution or resolutions adopted only once or with such frequency
as the Trustees may determine. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans
or related plans as the Trustees shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a stock dividend to the
Shareholders of a particular Series, or class thereof, as of the record
date of that Series fixed as provided in Subsection 9.01(b) hereof.
SECTION 9.02 REDEMPTIONS. In case any holder of record of Shares of a
particular Series desires to dispose of his Shares or any portion thereof he may
deposit at the office of the transfer agent or other authorized agent of that
Series a written request or such other form of request as the Trustees may from
time to time authorize, requesting that the Series purchase the Shares in
accordance with this Section 9.02; and, subject to Section 9.04 hereof, the
Shareholder so requesting shall be entitled to require the Series to purchase,
and the Series or the principal underwriter of the Series shall purchase his
said Shares, but only at the Net Asset Value thereof (as described in Section
9.03 of this Article IX). The Series shall make payment for any such Shares to
be redeemed, as aforesaid, in cash or property from the assets of that Series
and, subject to Section 9.04 hereof, payment for such Shares shall be made by
the Series or the principal underwriter of the Series to the Shareholder of
record within seven (7) days after the date upon which the request is effective.
Upon redemption, shares shall become Treasury shares and may be re-issued from
time to time.
SECTION 9.03 DETERMINATION OF NET ASSET VALUE AND VALUATION OF
PORTFOLIO
ASSETS. The term "Net Asset Value" of any Series shall mean that amount by
which the assets of that Series exceed its liabilities, all as determined by or
under the direction of the Trustees. The Trustees may delegate any of their
powers and duties under this Section 9.03 with respect to valuation of assets
and liabilities. Such value shall be determined separately for each Series and
shall be determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such securities;
and with respect to other securities and assets, at the
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fair value as determined in good faith by the Trustees; provided, however, that
the Trustees, without Shareholder approval, may alter the method of valuing
portfolio securities insofar as permitted under the 1940 Act. The resulting
amount, which shall represent the total Net Asset Value of the particular
Series, shall be divided by the total number of shares of that Series
outstanding at the time and the quotient so obtained shall be the Net Asset
Value per Share of that Series. At any time the Trustees may cause the Net Asset
Value per Share last determined to be determined again in similar manner and may
fix the time when such redetermined value shall become effective.
The Trustees shall not be required to adopt, but may at any time adopt,
discontinue or amend a practice of seeking to maintain the Net Asset Value per
Share of a Series at a constant amount. If, for any reason, the net income of
any Series, determined at any time, is a negative amount, the Trustees shall
have the power with respect to that Series (a) to offset each Shareholder's pro
rata share of such negative amount from the accrued dividend account of such
Shareholder, (b) to reduce the number of Outstanding Shares of such Series by
reducing the number of Shares in the account of each Shareholder by a pro rata
portion of that number of full and fractional Shares which represents the amount
of such excess negative net income, (c) to cause to be recorded on the books of
such Series an asset account in the amount of such negative net income (provided
that the same shall thereupon become the property of such Series with respect to
such Series and shall not be paid to any Shareholder), which account may be
reduced by the amount of dividends declared thereafter upon the Outstanding
Shares of such Series on the day such negative net income is experienced, until
such asset account is reduced to zero; (d) to combine the methods described in
clauses (a) and (b) and (c) of this sentence; or (e) to take any other action
they deem appropriate, in order to cause (or in order to assist in causing) the
Net Asset Value per Share of such Series to remain at a constant amount per
Outstanding Share immediately after each such determination and declaration. The
Trustees shall also have the power not to declare a dividend out of net income
for the purpose of causing the Net Asset Value per Share to be increased.
In the event that any Series is divided into classes, the provisions of
this Section 9.03, to the extent applicable as determined in the discretion of
the Trustees and consistent with the 1940 Act and other applicable law, may be
equally applied to each such class.
SECTION 9.04 SUSPENSION OF THE RIGHT OF REDEMPTION. The Trustees may
declare a suspension of the right of redemption or postpone the date of payment
provided for under Section 9.02 if permitted under the 1940 Act. Such suspension
shall take effect at such time as the Trustees shall specify but not later than
the close of business on the business day next following the declaration of
suspension, and thereafter there shall be no right of redemption or payment
until the Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either withdraw his
request for redemption or receive payment based on the Net Asset Value per Share
next determined after the termination of the suspension.
SECTION 9.05 REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED
INVESTMENT COMPANY. If the Trustees shall, at any time and in good faith, be of
the opinion that direct or indirect ownership of Shares of any Series has or may
become concentrated in any Person to an extent which would disqualify any Series
as a regulated investment company under the Internal Revenue Code, then the
Trustees shall have the power (but not the obligation) by lot or other means
deemed equitable by them (a) to call for redemption by any such person of a
number, or principal amount, of Shares sufficient to maintain or bring the
direct or indirect ownership of Shares into conformity with the requirements for
such qualification and (b) to refuse to transfer or issue Shares to any person
whose acquisition of Shares in question would result in such disqualification.
The redemption shall be effected at the redemption price and in the manner
provided in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in writing
such information with respect to direct and indirect ownership of Shares as the
Trustees deem necessary to comply with the requirements of any taxing authority
or this Section 9.05.
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ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 10.01 LIMITATION OF LIABILITY. Neither a Trustee nor an officer of
the Trust, when acting in such capacity, shall be personally liable to any
person other than the Trust or the Shareholders for any act, omission or
obligation of the Trust, any Trustee or any officer of the Trust. Neither a
Trustee nor an officer of the Trust shall not be liable for any act or omission
or any conduct whatsoever in his capacity as Trustee or as an officer of the
Trust, provided that nothing contained herein or in the Delaware Act shall
protect any Trustee or any officer of the Trust against any liability to the
Trust or to Shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee or officer of the Trust
hereunder.
SECTION 10.02 INDEMNIFICATION.
(a) Subject to the exceptions and limitations contained in Subsection
10.02(b):
(i) every person who is, or becomes, a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or incurred by
him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened, while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement of a proceeding in which it is
alleged that the Covered Person (A) engaged in willful misfeasance, bad
faith, gross negligence or reckless regard of the duties involved in the
conduct of his office, or (B) did not act in good faith in the
reasonable belief that his action was in the best interest of the Trust,
unless there has been a determination that such Trustee or officer did
not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement; (B) by at least
a majority of those Trustees who are neither Interested Persons of the
Trust nor are parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type inquiry); or (C) by
written opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type inquiry).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, shall continue as to a person who has ceased
to be a Covered Person and shall inure to the benefit of the heirs,
executors and administrators of such a person. Nothing contained herein
shall affect any rights to indemnification to which Trust personnel, other
than Covered Persons, and other persons may be entitled by contract or
otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described
in Subsection (a) of this Section 10.02 may be paid by the Trust or Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on
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behalf of such Covered Person that such amount will be paid over by him to
the Trust or Series if it is ultimately determined that he is not entitled
to indemnification under this Section 10.02; provided, however, that either
(i) such Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of any
such advance payments, or (iii) either a majority of the Trustees who are
neither Interested Persons of the Trust nor parties to the matter, or
independent legal counsel in a written opinion, shall have determined,
based upon a review of readily available facts (as opposed to a trial-type
inquiry or full investigation), that there is reason to believe that such
Covered Person will be found entitled to indemnification under this Section
10.02.
SECTION 10.03 SHAREHOLDERS. In case any Shareholder or former Shareholder
of any Series shall be held to be personally liable solely by reason of his
being or having been a Shareholder of such Series and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives, or, in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense arising from
such liability. The Trust, on behalf of the affected Series, shall, upon request
by the Shareholder, assume the defense of any claim made against the Shareholder
for any act or obligation of the Series and satisfy any judgment thereon from
the assets of the Series.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 TRUST NOT A PARTNERSHIP. It is hereby expressly declared
that a trust and not a partnership is created hereby. No Trustee hereunder shall
have any power to bind personally either the Trust officers or any Shareholder.
All persons extending credit to, contracting with or having any claim against
the Trust or the Trustees shall look only to the assets of the appropriate
Series or (if the Trustees shall have yet to have established Series) of the
Trust for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of their agents, whether past, present or
future, shall be personally liable therefor. Nothing in this Trust Instrument
shall protect a Trustee against any liability to which the Trustee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee hereunder.
SECTION 11.02 TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the Trustees or the officers of the Trust of their
powers and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article X hereof and to Section 11.01 of this Article XI,
the Trustees and the officers of the Trust shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees and the officers of the Trust
may take advice of counsel or other experts with respect to the meaning and
operation of this Trust Instrument, and subject to the provisions of Article X
hereof and Section 11.01 of this Article XI, shall be under no liability for any
act or omission in accordance with such advice or for failing to follow such
advice. The Trustees and the officers of the Trust shall not be required to give
any bond as such, nor any surety if a bond is obtained.
SECTION 11.03 ESTABLISHMENT OF RECORD DATES. The Trustees may close the
Share transfer books of the Trust for a period not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for the payment
of any dividends or other distributions, or the date for the allotment of
rights, or the date when any change or conversion or exchange of Shares shall go
into effect; or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date, not exceeding sixty (60) days preceding the
date of any meeting of Shareholders, or the date for payment of any dividend or
other distribution, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect, as a record
date for the determination of the Shareholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any such dividend
or other distribution, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of Shares, and in
such case such Shareholders and only such Shareholders as shall be Shareholders
of record on the date so fixed shall be
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entitled to such notice of, and to vote at, such meeting, or to receive payment
of such dividend or other distribution, or to receive such allotment or rights,
or to exercise such rights, as the case may be, notwithstanding any transfer of
any Shares on the books of the Trust after any such record date fixed as
aforesaid.
SECTION 11.04 TERMINATION OF TRUST.
(a) This Trust shall continue without limitation of time but subject
to the provisions of Subsection 11.04(b).
(b) The Trustees may, subject to any necessary Shareholder, Trustee,
or regulatory approvals:
(i) sell and convey all or substantially all of the assets of the
Trust or any affected Series to another trust, partnership, association
or corporation, or to a separate series of shares thereof, organized
under the laws of any state which trust, partnership, association or
corporation is an open-end management investment company as defined in
the 1940 Act, or is a series thereof, for adequate consideration which
may include the assumption of all outstanding obligations, taxes and
other liabilities, accrued or contingent, of the Trust or any affected
Series, and which may include shares of beneficial interest, stock or
other ownership interests of such trust, partnership, association or
corporation or of a series thereof;
(ii) sell and convey all or substantially all of the assets of any
Series of the Trust into any other Series thereof for adequate
consideration;
(iii) enter into a plan of liquidation in order to terminate and
liquidate any Series (or class) of the Trust, or the Trust; or
(iv) at any time sell and convert into money all of the assets of
the Trust or any affected Series.
Upon making reasonable provision, in the determination of the Trustees, for the
payment of all liabilities by assumption or otherwise, the Trustees shall
distribute the remaining proceeds or assets (as the case may be) of each Series
(or class) ratably among the holders of Shares of the affected Series, based
upon the ratio that each Shareholder's Shares bears to the number of Shares of
such Series (or class) then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in Subsection 11.04(b), the Trust or any
affected Series shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties hereunder and the
right, title and interest of all parties with respect to the Trust or
Series shall be cancelled and discharged.
Upon termination of the Trust, following completion of winding up of
its business, the Trustees shall cause a certificate of cancellation of the
Trust's certificate of trust to be filed in accordance with the Delaware
Act, which certificate of cancellation may be signed by any one Trustee.
SECTION 11.05 REORGANIZATION.
(a) Notwithstanding anything else herein, the Trustees, in order to
change the form or jurisdiction of organization of the Trust, may (i) cause
the Trust to merge, consolidate or otherwise reorganize with or into one or
more trusts, partnerships (general or limited), associations or
corporations, so long as the surviving or resulting entity is an open-end
management investment company registered under the 1940 Act, or a series
thereof, that will succeed to or assume the Trust's registration under that
Act and which is formed, organized or existing under the laws of a state,
commonwealth, possession or colony of the United States, or (ii) cause the
Trust to incorporate under the laws of Delaware.
(b) The Trustees may, subject to a vote of a majority of the Trustees
and any shareholder vote required under the 1940 Act, if any, cause the
Trust to merge or consolidate with or into one or more Trusts, partnerships
(general or limited), associations, limited liability companies or
corporations formed, organized or existing under the laws of a state,
commonwealth, possession or colony of the United States.
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<PAGE> 95
(c) Any agreement of merger or consolidation or certificate of merger
or consolidation may be signed by a majority of Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be
valid.
(d) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, and notwithstanding anything to the contrary
contained in this Trust Instrument, an agreement of merger or consolidation
approved by the Trustees in accordance with paragraph (a) or (b) this
Section 11.05 may effect any amendment to the Trust Instrument or effect
the adoption of a new trust instrument of the Trust if it is the surviving
or resulting trust in the merger or consolidation.
SECTION 11.06 FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this Trust Instrument and of each amendment hereof or Trust Instrument
supplemental hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer or Trustee of the Trust as to whether or not any such
amendments or supplements have been made and as to any matters in connection
with the Trust hereunder, and with the same effect as if it were the original,
may rely on a copy certified by an officer or Trustee of the Trust to be a copy
of this Trust Instrument or of any such amendment or supplemental Trust
Instrument. In this Trust Instrument or in any such amendment or supplemental
Trust Instrument, references to this Trust Instrument, and all expressions such
as "herein," "hereof" and "hereunder," or to similar effect, shall be deemed to
refer to this Trust Instrument as amended or affected by any such supplemental
Trust Instrument. All expressions such as "his," "he" and "him," or to similar
effect, shall be deemed to include the feminine and neuter, as well as
masculine, genders. Headings are placed herein for convenience of reference only
and in case of any conflict, the text of this Trust Instrument, rather than the
headings, shall control. This Trust Instrument may be executed in any number of
counterparts each of which shall be deemed an original.
SECTION 11.07 APPLICABLE LAW. The trust set forth in this instrument is
made in the State of Delaware, and the Trust and this Trust Instrument, and the
rights and obligations of the Trustees and Shareholders hereunder, are to be
governed by and construed and administered according to the Delaware Act and the
laws of said State; provided, however, that there shall not be applicable to the
Trust, the Trustees or this Trust Instrument (a) the provisions of Section 3540
of Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or
common) of the State of Delaware (other than the Delaware Act) pertaining to
trusts which relate to or regulate (i) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges,
(ii) affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Trust Instrument. The Trust shall be of the type commonly called a
"business trust," and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
SECTION 11.08 AMENDMENTS. Except as specifically provided herein, the
Trustees may, without a vote or approval of Shareholders, amend or otherwise
supplement this Trust Instrument by making an amendment, a Trust Instrument
supplemental hereto or an amended and restated trust instrument. Shareholders
shall have the right to vote on any amendment to this Trust Instrument (a) which
would adversely affect their rights under this Trust Instrument, (b) which would
alter the material terms of this Section 11.08, (c) as may be required by law or
by the Trust's registration statement filed with the Commission, and (d) if the
amendment is submitted to them by the Trustees. Any amendment required or
permitted to be submitted to Shareholders which, as the Trustees determine,
shall affect the Shareholders of one or more Series or class thereof shall be
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<PAGE> 96
authorized by vote of the Shareholders of each Series or class thereof affected
and no vote of shareholders of a Series not affected shall be required.
Notwithstanding any other provision of this Trust Instrument, any amendment to
Article X hereof shall not limit the rights to indemnification or insurance
provided therein with respect to action or omission of Covered Persons prior to
such amendment.
SECTION 11.09 FISCAL YEAR. The fiscal year of the Trust or any Series
thereof shall end on a specified date as set forth in the Bylaws, provided,
however, that the Trustees may change the fiscal year of the Trust or any Series
thereof.
SECTION 11.10 NAME RESERVATION. The Trustees on behalf of the Trust
acknowledge that KeyCorp, through its subsidiary Key Trust Company ("Key Trust")
has licensed to the Trust the non-exclusive right to use the name "Victory" as
part of the name of the Trust, and has reserved the right to grant the
non-exclusive use of the name "Victory" or any derivative thereof to any other
party. In addition, Key Trust reserves the right to grant the non-exclusive use
of the name "Victory" to, and to withdraw such right from, any other business or
other enterprise. Key Trust reserves the right to withdraw from the Trust the
right to use said name "Victory" and will withdraw such right if the Trust
ceases to employ, for any reason, KeyCorp, an affiliate or any successor as
adviser of the Trust.
SECTION 11.11 PROVISIONS IN CONFLICT WITH LAW. The provisions of this
Trust Instrument are severable, and if the Trustees shall determine, with the
advice of counsel, that any of such provision is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue Code or with
other applicable laws and regulations, the conflicting provision shall be deemed
never to have constituted a part of this Trust Instrument; provided, however,
that such determination shall not affect any of the remaining provisions of this
Trust Instrument or render invalid or improper any action taken or omitted prior
to such determination. If any provision of this Trust Instrument shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any matter affect such provision in any other jurisdiction or any
other provision of this Trust Instrument in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of
the Trust, have executed this instrument as of date first written above.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Robert G. Brown, as Trustee Edward P. Campbell, as Trustee
and not individually and not individually
- -------------------------------------------- --------------------------------------------
Stanley I. Landgraf, as Trustee Harry Gazelle, as Trustee
and not individually and not individually
- -------------------------------------------- --------------------------------------------
H. Patrick Swygert, as Trustee Thomas F. Morrissey, as Trustee
and not individually and not individually
- --------------------------------------------
Leigh A. Wilson, as Trustee
and not individually
</TABLE>
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<PAGE> 97
SCHEDULE A
Balanced Fund
Diversified Stock Fund
Government Mortgage Fund
Growth Fund
Intermediate Income Fund
International Growth Fund
Investment Quality Bond Fund
Limited Term Income Fund
Ohio Municipal Bond Fund
Ohio Regional Stock Fund
Prime Obligations Fund
Special Value Fund
Stock Index Fund
Tax-Free Money Market Fund
U.S. Government Obligations Fund
Value Fund
Financial Reserves Fund
Fund for Income
Government Bond Fund (Class A and Class B)
Institutional Money Market Fund (Service Class and Institutional Class)
National Municipal Bond Fund (Class A and Class B)
New York Tax-Free Fund (Class A and Class B)
Ohio Municipal Money Market Fund
Special Growth Fund
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<PAGE> 98
EXHIBIT C
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE VICTORY PORTFOLIOS
AND
KEYCORP MUTUAL FUND ADVISERS, INC.
AGREEMENT made as of the day of , 1995, by and between The
Victory Portfolios, a Delaware business trust which may issue one or more series
of shares of beneficial interest (the "Company"), and KeyCorp Mutual Fund
Advisers, Inc., an Ohio corporation (the "Adviser").
WHEREAS, the Company is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain the Adviser to furnish investment
advisory services to the funds listed on Schedule A (each, a "Fund" and
collectively, the "Funds"), and the Adviser represents that it is willing and
possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT.
(a) General. The Company hereby appoints the Adviser to act as
investment adviser to the Funds for the period and on the terms set forth
in this Agreement. The Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
(b) Employees of Affiliates. The Adviser may, in its discretion,
provide such services through its own employees or the employees of one or
more affiliated companies that are qualified to act as an investment
adviser to the Company under applicable laws and are under the control of
KeyCorp, the indirect parent of the Adviser; provided that (i) all persons,
when providing services hereunder, are functioning as part of an organized
group of persons, and (ii) such organized group of persons is managed at
all times by authorized officers of the Adviser.
(c) Sub-Advisers. It is understood and agreed that the Adviser may
from time to time employ or associate with such other entities or persons
as the Adviser believes appropriate to assist in the performance of this
Agreement with respect to a particular Fund or Funds (each a
"Sub-Adviser"), and that any such Sub-Adviser shall have all of the rights
and powers of the Adviser set forth in this Agreement; provided that a Fund
shall not pay any additional compensation for any Sub-Adviser and the
Adviser shall be as fully responsible to the Company for the acts and
omissions of the Sub-Adviser as it is for its own acts and omissions; and
provided further that the retention of any Sub-Adviser shall be approved in
advance by (i) the Board of Trustees of the Company and (ii) the
shareholders of the relevant Fund if required under any applicable
provisions of the 1940 Act. The Adviser will review, monitor and report to
the Company's Board of Trustees regarding the performance and investment
procedures of any Sub-Adviser. In the event that the services of any
Sub-Adviser are terminated, the Adviser may provide investment advisory
services pursuant to this Agreement to the Fund without a Sub-Adviser and
without further shareholder approval, to the extent consistent with the
1940 Act. A Sub-Adviser may be an affiliate of the Adviser.
2. DELIVERY OF DOCUMENTS. The Company has delivered to the Adviser copies
of each of the following documents along with all amendments thereto through the
date hereof, and will promptly deliver to it all future amendments and
supplements thereto, if any:
(a) the Company's Trust Instrument;
(b) the By-Laws of the Company;
<PAGE> 99
(c) resolutions of the Board of Trustees of the Company authorizing
the execution and delivery of this Agreement;
(d) the most recent Post-Effective Amendment to the Company's
Registration Statement under the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act, on Form N-1A as filed with the Securities
and Exchange Commission (the "Commission");
(e) Notification of Registration of the Company under the 1940 Act on
Form N-8A as filed with the Commission; and
(f) the currently effective Prospectuses and Statements of Additional
Information of the Funds.
3. INVESTMENT ADVISORY SERVICES.
(a) Management of the Funds. The Adviser hereby undertakes to act as
investment adviser to the Funds. The Adviser shall regularly provide
investment advice to the Funds and continuously supervise the investment
and reinvestment of cash, securities and other property comprising the
assets of the Funds and, in furtherance thereof, shall:
(i) supervise all aspects of the operations of the Company and each
Fund;
(ii) obtain and evaluate pertinent economic, statistical and
financial data, as well as other significant events and developments,
which affect the economy generally, the Funds' investment programs, and
the issuers of securities included in the Funds' portfolios and the
industries in which they engage, or which may relate to securities or
other investments which the Adviser may deem desirable for inclusion in
a Fund's portfolio;
(iii) determine which issuers and securities shall be included in
the portfolio of each Fund;
(iv) furnish a continuous investment program for each Fund;
(v) in its discretion and without prior consultation with the
Company, buy, sell, lend and otherwise trade any stocks, bonds and other
securities and investment instruments on behalf of each Fund; and
(vi) take, on behalf of each Fund, all actions the Adviser may deem
necessary in order to carry into effect such investment program and the
Adviser's functions as provided above, including the making of
appropriate periodic reports to the Company's Board of Trustees.
(b) Covenants. The Adviser shall carry out its investment advisory
and supervisory responsibilities in a manner consistent with the investment
objectives, policies, and restrictions provided in: (i) each Fund's
Prospectus and Statement of Additional Information as revised and in effect
from time to time; (ii) the Company's Trust Instrument, By-Laws or other
governing instruments, as amended from time to time; (iii) the 1940 Act;
(iv) other applicable laws; and (v) such other investment policies,
procedures and/or limitations as may be adopted by the Company with respect
to a Fund and provided to the Adviser in writing. The Adviser agrees to use
reasonable efforts to manage each Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended, and regulations issued
thereunder (the "Code"), except as may be authorized to the contrary by the
Company's Board of Trustees. The management of the Funds by the Adviser
shall at all times be subject to the review of the Company's Board of
Trustees.
(c) Books and Records. Pursuant to applicable law, the Adviser shall
keep each Fund's books and records required to be maintained by, or on
behalf of, the Funds with respect to advisory services rendered hereunder.
The Adviser agrees that all records which it maintains for a Fund are the
property of the Fund and it will promptly surrender any of such records to
the Fund upon the Fund's request. The Adviser further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act any such
records of the Fund required to be preserved by such Rule.
(d) Reports, Evaluations and other Services. The Adviser shall
furnish reports, evaluations, information or analyses to the Company with
respect to the Funds and in connection with the Adviser's
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<PAGE> 100
services hereunder as the Company's Board of Trustees may request from time
to time or as the Adviser may otherwise deem to be desirable. The Adviser
shall make recommendations to the Company's Board of Trustees with respect
to Company policies, and shall carry out such policies as are adopted by
the Board of Trustees. The Adviser may, subject to review by the Board of
Trustees, furnish such other services as the Adviser shall from time to
time determine to be necessary or useful to perform its obligations under
this Agreement.
(e) Purchase and Sale of Securities. The Adviser shall place all
orders for the purchase and sale of portfolio securities for each Fund with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser to the extent permitted by the 1940 Act
and the Company's policies and procedures applicable to the Funds. The
Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which, under the circumstances, result in total
costs or proceeds being the most favorable to the Funds. In assessing the
best overall terms available for any transaction, the Adviser shall
consider all factors it deems relevant, including the breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, research services provided to
the Adviser, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In no event shall the
Adviser be under any duty to obtain the lowest commission or the best net
price for any Fund on any particular transaction, nor shall the Adviser be
under any duty to execute any order in a fashion either preferential to any
Fund relative to other accounts managed by the Adviser or otherwise
materially adverse to such other accounts.
(f) Selection of Brokers or Dealers. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Adviser, the Funds and/or the other accounts over which the Adviser
exercises investment discretion. The Adviser is authorized to pay a broker
or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for a Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that the
total commission is reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in terms of
either that particular transaction or the overall responsibilities of the
Adviser with respect to accounts over which it exercises investment
discretion. The Adviser shall report to the Board of Trustees of the
Company regarding overall commissions paid by the Funds and their
reasonableness in relation to the benefits to the Funds.
(g) Aggregation of Securities Transactions. In executing portfolio
transactions for a Fund, the Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate
the securities to be sold or purchased with those of other Funds or its
other clients if, in the Adviser's reasonable judgment, such aggregation
(i) will result in an overall economic benefit to the Fund, taking into
consideration the advantageous selling or purchase price, brokerage
commission and other expenses, and trading requirements, and (ii) is not
inconsistent with the policies set forth in the Company's registration
statement and the Fund's Prospectus and Statement of Additional
Information. In such event, the Adviser will allocate the securities so
purchased or sold, and the expenses incurred in the transaction, in an
equitable manner, consistent with its fiduciary obligations to the Fund and
such other clients.
4. REPRESENTATIONS AND WARRANTIES.
(a) The Adviser hereby represents and warrants to the Company as
follows:
(i) The Adviser is a corporation duly organized and in good
standing under the laws of the State of Ohio and is fully authorized to
enter into this Agreement and carry out its duties and obligations
hereunder.
(ii) The Adviser is registered as an investment adviser with the
Commission under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and is registered or licensed as
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<PAGE> 101
an investment adviser under the laws of all applicable jurisdictions.
The Adviser shall maintain such registrations or licenses in effect at
all times during the term of this Agreement.
(iii) The Adviser at all times shall provide its best judgment and
effort to the Company in carrying out the Adviser's obligations
hereunder.
(b) The Company hereby represents and warrants to the Adviser as
follows:
(i) The Company has been duly organized as a business trust under
the laws of the State of Delaware and is authorized to enter into this
Agreement and carry out its terms.
(ii) The Company is registered as an investment company with the
Commission under the 1940 Act and shares of each Fund are registered for
offer and sale to the public under the 1933 Act and all applicable state
securities laws where currently sold. Such registrations will be kept in
effect during the term of this Agreement.
5. COMPENSATION. As compensation for the services which the Adviser is to
provide or cause to be provided pursuant to Paragraph 3, each Fund shall pay to
the Adviser out of Fund assets an annual fee, computed and accrued daily and
paid in arrears on the first business day of every month, at the rate set forth
opposite each Fund's name on Schedule A, which shall be a percentage of the
average daily net assets of the Fund (computed in the manner set forth in the
Fund's most recent Prospectus and Statement of Additional Information)
determined as of the close of business on each business day throughout the
month. At the request of the Adviser, some or all of such fee shall be paid
directly to a Sub-Adviser. The fee for any partial month under this Agreement
shall be calculated on a proportionate basis. In the event that the total
expenses of a Fund exceed the limits on investment company expenses imposed by
any statute or any regulatory authority of any jurisdiction in which shares of
such Fund are qualified for offer and sale, the Adviser will bear the amount of
such excess, except: (i) the Adviser shall not be required to bear such excess
to an extent greater than the compensation due to the Adviser for the period for
which such expense limitation is required to be calculated unless such statute
or regulatory authority shall so require, and (ii) the Adviser shall not be
required to bear the expenses of the Fund to an extent which would result in the
Fund's or Company's inability to qualify as a regulated investment company under
the provisions of Subchapter M of the Code.
6. INTERESTED PERSONS. It is understood that, to the extent consistent
with applicable laws, the Trustees, officers and shareholders of the Company are
or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and shareholders of the Adviser are or
may be or become similarly interested in the Company.
7. EXPENSES. As between the Adviser and the Funds, the Funds will pay for
all their expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Funds shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other costs
in connection with the purchase or sale of securities and other investment
instruments, which the parties acknowledge might be higher than other brokers
would charge when a Fund utilizes a broker which provides brokerage and research
services to the Adviser as contemplated under Paragraph 3 above; (iii) fees and
expenses of the Company's Trustees that are not employees of the Adviser; (iv)
legal and audit expenses; (v) administrator, custodian, pricing and bookkeeping,
registrar and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Funds' shares for distribution
under state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders, unless otherwise
required; (viii) all other expenses incidental to holding meetings of
shareholders, including proxy solicitations therefor, unless otherwise required;
(ix) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (x) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; (xi) insurance premiums for fidelity
bonds and other coverage to the extent approved by the Company's Board of
Trustees; (xii) association membership dues authorized by the Company's Board of
Trustees; and (xiii) such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Company
is a party (or to which the Funds' assets are subject) and any legal
4
<PAGE> 102
obligation for which the Company may have to provide indemnification to the
Company's Trustees and officers.
8. NON-EXCLUSIVE SERVICES; LIMITATION OF ADVISER'S LIABILITY. The
services
of the Adviser to the Funds are not to be deemed exclusive and the Adviser may
render similar services to others and engage in other activities. The Adviser
and its affiliates may enter into other agreements with the Funds and the
Company for providing additional services to the Funds and the Company which are
not covered by this Agreement, and to receive additional compensation for such
services. In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Adviser, or a breach of fiduciary duty with respect to receipt of compensation,
neither the Adviser nor any of its directors, officers, shareholders, agents, or
employees shall be liable or responsible to the Company, the Funds or to any
shareholder of the Funds for any error of judgment or mistake of law or for any
act or omission in the course of, or connected with, rendering services
hereunder or for any loss suffered by the Company, a Fund or any shareholder of
a Fund in connection with the performance of this Agreement.
9. EFFECTIVE DATE; MODIFICATIONS; TERMINATION. This Agreement shall
become
effective on , 1996, provided that it shall have been approved by a
majority of the outstanding voting securities of each Fund, in accordance with
the requirements of the 1940 Act, or such later date as may be agreed by the
parties following such shareholder approval.
(a) This Agreement shall continue in force until December 31, 1997.
Thereafter, this Agreement shall continue in effect as to each Fund for
successive annual periods, provided such continuance is specifically
approved at least annually (i) by a vote of the majority of the Trustees of
the Company who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of
voting on such approval and (ii) by a vote of the Board of Trustees of the
Company or a majority of the outstanding voting shares of the Fund.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those Trustees of the
Company who are not interested persons of any party to this Agreement, cast
in person at a meeting called for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement at any time on sixty (60)
days' prior written notice to the other, without payment of any penalty.
Such a termination by the Company may be effected severally as to any
particular Fund, and shall be effected as to any Fund by vote of the
Company's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall terminate automatically
in the event of its assignment.
10. LIMITATION OF LIABILITY OF TRUSTEES AND SHAREHOLDERS. The Adviser
acknowledges the following limitation of liability:
The terms "The Victory Portfolios" and "Trustees" refer, respectively, to
the trust created and the Trustees, as trustees but not individually or
personally, acting from time to time under the Trust Instrument, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of State of the State of Delaware, such reference being inclusive of
any and all amendments thereto so filed or hereafter filed. The obligations of
"The Victory Portfolios" entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities and are not binding upon any of the Trustees, shareholders or
representatives of the Company personally, but bind only the assets of the
Company, and all persons dealing with the Company or a Fund must look solely to
the assets of the Company or Fund for the enforcement of any claims against the
Company or Fund.
11. SERVICE MARK. The service mark of the Company and the name "Victory"
(and derivatives thereof) have been licensed to the Company by KeyCorp, through
its subsidiary Key Trust Company ("Key Trust"), an affiliate of the Adviser,
pursuant to a License Agreement dated June 21, 1993, and their continued use is
subject to the right of Key Trust to withdraw this permission under the License
Agreement in the event the Adviser or another subsidiary of KeyCorp is not the
investment adviser to the Company.
5
<PAGE> 103
12. CERTAIN DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities," "assignment," "control," and "interested persons," when used
herein, shall have the respective meanings specified in the 1940 Act. References
in this Agreement to the 1940 Act and the Advisers Act shall be construed as
references to such laws as now in effect or as hereafter amended, and shall be
understood as inclusive of any applicable rules, interpretations and/or orders
adopted or issued thereunder by the Commission.
13. INDEPENDENT CONTRACTOR. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Company from time
to time, have no authority to act for or represent a Fund in any way or
otherwise be deemed an agent of a Fund.
14. STRUCTURE OF AGREEMENT. The Company is entering into this Agreement on
behalf of the respective Funds severally and not jointly. The responsibilities
and benefits set forth in this Agreement shall refer to each Fund severally and
not jointly. No Fund shall have any responsibility for any obligation of any
other Fund arising out of this Agreement. Without otherwise limiting the
generality of the foregoing:
(a) any breach of any term of this Agreement regarding the Company
with respect to any one Fund shall not create a right or obligation with
respect to any other Fund;
(b) under no circumstances shall the Adviser have the right to set off
claims relating to a Fund by applying property of any other Fund; and
(c) the business and contractual relationships created by this
Agreement, consideration for entering into this Agreement, and the
consequences of such relationship and consideration relate solely to the
Company and the particular Fund to which such relationship and
consideration applies.
This Agreement is intended to govern only the relationships between the
Adviser, on the one hand, and the Company and the Funds, on the other hand, and
(except as specifically provided above in this Paragraph 14) is not intended to
and shall not govern (i) the relationship between the Company and any Fund or
(ii) the relationships among the respective Funds.
15. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Ohio, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or the Advisers Act.
16. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
17. NOTICES. Notices of any kind to be given to the Company hereunder by
the Adviser shall be in writing and shall be duly given if mailed or delivered
to 3435 Stelzer Road, Columbus, Ohio 43219-3035, Attention: George O. Martinez,
Esq.; with a copy to Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, 919 Third
Avenue, New York, New York 10022, Attention: Carl Frischling, Esq., or at such
other address or to such individual as shall be so specified by the Company to
the Adviser. Notices of any kind to be given to the Adviser hereunder by the
Company shall be in writing and shall be duly given if mailed or delivered to
the Adviser at 127 Public Square, Cleveland, Ohio 44114-1306, Attention: W.
Christopher Maxwell with a copy to Stacey L. Bauer, Esq., or at such other
address or to such individual as shall be so specified by the Adviser to the
Company. Notices shall be effective upon delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date written
above.
THE VICTORY PORTFOLIOS KEYCORP MUTUAL FUND ADVISERS, INC.
By: By:
------------------------- ---------------------------
Name: Name:
Title: Title:
6
<PAGE> 104
SCHEDULE A
<TABLE>
<CAPTION>
NAME OF FUND FEE*
-------------------------------------------------------------------------------- ----
<C> <S> <C>
1. The Victory Balanced Fund....................................................... 1.00%
2. The Victory Diversified Stock Fund.............................................. .65%
3. The Victory Government Mortgage Fund............................................ .50%
4. The Victory Growth Fund......................................................... 1.00%
5. The Victory Intermediate Income Fund............................................ .75%
6. The Victory International Growth Fund........................................... 1.10%
7. The Victory Investment Quality Bond Fund........................................ .75%
8. The Victory Limited Term Income Fund............................................ .50%
9. The Victory Ohio Municipal Bond Fund............................................ .60%
10. The Victory Ohio Regional Stock Fund............................................ .75%
11. The Victory Prime Obligations Fund.............................................. .35%
12. The Victory Special Value Fund.................................................. 1.00%
13. The Victory Stock Index Fund.................................................... .60%
14. The Victory Tax-Free Money Market Fund.......................................... .35%
15. The Victory U.S. Government Obligations Fund.................................... .35%
16. The Victory Value Fund.......................................................... 1.00%
17. The Victory Financial Reserves Fund............................................. .50%
18. The Victory Fund for Income..................................................... .50%
19. The Victory Government Bond Fund................................................ .55%
20. The Victory Institutional Money Market Fund..................................... .25%
21. The Victory National Municipal Bond Fund........................................ .55%
22. The Victory New York Tax-Free Fund.............................................. .55%
23. The Victory Ohio Municipal Money Market Fund.................................... .50%
24. The Victory Special Growth Fund................................................. 1.00%
</TABLE>
- ---------------
* As a percentage of average daily net assets. Note, however, that the Adviser
shall have the right, but not the obligation, to voluntarily waive any portion
of the advisory fee from time to time. Any such voluntary waiver will be
irrevocable and determined in advance of rendering investment advisory
services by the Adviser, and shall be in writing and signed by the parties
hereto.
7
<PAGE> 105
EXHIBIT D
INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
KEYCORP MUTUAL FUND ADVISERS, INC.
AND
SOCIETY ASSET MANAGEMENT, INC.
AGREEMENT made as of the day of , 1996 by and between KeyCorp
Mutual Fund Advisers, Inc., an Ohio corporation (the "Adviser"), and Society
Asset Management, Inc., an Ohio corporation (the "Sub-Adviser").
WHEREAS, the Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser provides investment advisory services to the series of
The Victory Portfolios, a Delaware business trust (the "Company"), which is
registered as an open-end, management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), pursuant to an Investment
Advisory Agreement dated , 1996 (the "Advisory Agreement"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the series of the Company
listed on Schedule A (each, a "Fund" and collectively, the "Funds"), and the
Sub-Adviser represents that it is willing and possesses legal authority to so
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT.
(a) General. The Adviser hereby appoints the Sub-Adviser to act as
investment subadviser to the Funds for the period and on the terms set
forth in this Agreement. The Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
(b) Employees of Affiliates. The Sub-Adviser may, in its discretion,
provide such services through its own employees or the employees of one or
more affiliated companies that are qualified to act as an investment
subadviser to the Funds under applicable laws and are under the control of
KeyCorp, the indirect parent of the Sub-Adviser; provided that (i) all
persons, when providing services hereunder, are functioning as part of an
organized group of persons, and (ii) such organized group of persons is
managed at all times by authorized officers of the Sub-Adviser.
2. DELIVERY OF DOCUMENTS. The Adviser has delivered to the Sub-Adviser
copies of each of the following documents along with all amendments thereto
through the date hereof, and will promptly deliver to it all future amendments
and supplements thereto, if any:
(a) the Company's Trust Instrument;
(b) the By-Laws of the Company;
(c) resolutions of the Board of Trustees of the Company authorizing
the execution and delivery of the Advisory Agreement and this Agreement;
(d) the most recent Post-Effective Amendment to the Company's
Registration Statement under the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act, on Form N-1A as filed with the Securities
and Exchange Commission (the "Commission");
(e) Notification of Registration of the Company under the 1940 Act on
Form N-8A as filed with the Commission; and
(f) the currently effective Prospectuses and Statements of Additional
Information of the Funds.
<PAGE> 106
3. INVESTMENT ADVISORY SERVICES.
(a) Management of the Funds. The Sub-Adviser hereby undertakes to act
as investment subadviser to the Funds. The Sub-Adviser shall regularly
provide investment advice to the Funds and continuously supervise the
investment and reinvestment of cash, securities and other property
comprising the assets of the Funds and, in furtherance thereof, shall:
(i) obtain and evaluate pertinent economic, statistical and
financial data, as well as other significant events and developments,
which affect the economy generally, the Funds' investment programs, and
the issuers of securities included in the Funds' portfolios and the
industries in which they engage, or which may relate to securities or
other investments which the Sub-Adviser may deem desirable for inclusion
in a Fund's portfolio;
(ii) determine which issuers and securities shall be included in
the portfolio of each Fund;
(iii) furnish a continuous investment program for each Fund;
(iv) in its discretion, and without prior consultation, buy, sell,
lend and otherwise trade any stocks, bonds and other securities and
investment instruments on behalf of each Fund; and
(v) take, on behalf of each Fund, all actions the Sub-Adviser may
deem necessary in order to carry into effect such investment program and
the Sub-Adviser's functions as provided above, including the making of
appropriate periodic reports to the Adviser and the Company's Board of
Trustees.
(b) Covenants. The Sub-Adviser shall carry out its investment
subadvisory responsibilities in a manner consistent with the investment
objectives, policies, and restrictions provided in: (i) each Fund's
Prospectus and Statement of Additional Information as revised and in effect
from time to time; (ii) the Company's Trust Instrument, By-Laws or other
governing instruments, as amended from time to time; (iii) the 1940 Act;
(iv) other applicable laws; and (v) such other investment policies,
procedures and/or limitations as may be adopted by the Company or the
Adviser with respect to a Fund and provided to the Sub-Adviser in writing.
The Sub-Adviser agrees to use reasonable efforts to manage each Fund so
that it will qualify, and continue to qualify, as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended, and regulations issued thereunder (the "Code"), except as may be
authorized to the contrary by the Company's Board of Trustees. The
management of the Funds by the Sub-Adviser shall at all times be subject to
the review of the Adviser and the Company's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the Sub-Adviser
shall keep each Fund's books and records required to be maintained by, or
on behalf of, the Funds with respect to subadvisory services rendered
hereunder. The Sub-Adviser agrees that all records which it maintains for a
Fund are the property of the Fund and it will promptly surrender any of
such records to the Fund upon the Fund's request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any such records of the Fund required to be preserved by such Rule.
(d) Reports, Evaluations and other Services. The Sub-Adviser shall
furnish reports, evaluations, information or analyses to the Adviser and
the Company with respect to the Funds and in connection with the
Sub-Adviser's services hereunder as the Adviser and/or the Company's Board
of Trustees may request from time to time or as the Sub-Adviser may
otherwise deem to be reasonably necessary. The Sub-Adviser may make
recommendations to the Adviser and the Company's Board of Trustees with
respect to the Company's policies, and shall carry out such policies as are
adopted by the Board of Trustees. The Sub-Adviser may, subject to review by
the Adviser, furnish such other services as the Sub-Adviser shall from time
to time determine to be necessary or useful to perform its obligations
under this Agreement.
(e) Purchase and Sale of Securities. The Sub-Adviser shall place all
orders for the purchase and sale of portfolio securities for each Fund with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or the Sub-Adviser to the extent
permitted by the
2
<PAGE> 107
1940 Act and the Company's policies and procedures applicable to the Funds.
The Sub-Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which, under the circumstances, result in total
costs or proceeds being the most favorable to the Funds. In assessing the
best overall terms available for any transaction, the Sub-Adviser shall
consider all factors it deems relevant, including the breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, research services provided to
the Sub-Adviser, and the reasonableness of the commission, if any, both for
the specific transaction and on a continuing basis. In no event shall the
Sub-Adviser be under any duty to obtain the lowest commission or the best
net price for any Fund on any particular transaction, nor shall the
Sub-Adviser be under any duty to execute any order in a fashion either
preferential to any Fund relative to other accounts managed by the
Sub-Adviser or otherwise materially adverse to such other accounts.
(f) Selection of Brokers or Dealers. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Sub-Adviser, the Funds, and/or the other accounts over which the
Sub-Adviser exercises investment discretion. The Sub-Adviser is authorized
to pay a broker or dealer who provides such brokerage and research services
a commission for executing a portfolio transaction for a Fund which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Adviser determines in
good faith that the total commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser with respect to accounts over which it
exercises investment discretion. The Sub-Adviser shall report to the Board
of Trustees of the Company regarding overall commissions paid by the Funds
and their reasonableness in relation to their benefits to the Funds.
(g) Aggregation of Securities Transactions. In executing portfolio
transactions for a Fund, the Sub-Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate
the securities to be sold or purchased with those of other Funds or its
other clients if, in the Sub-Adviser's reasonable judgment, such
aggregation (i) will result in an overall economic benefit to the Fund,
taking into consideration the advantageous selling or purchase price,
brokerage commission and other expenses, and trading requirements, and (ii)
is not inconsistent with the policies set forth in the Company's
registration statement and the Fund's Prospectus and Statement of
Additional Information. In such event, the Sub-Adviser will allocate the
securities so purchased or sold, and the expenses incurred in the
transaction, in an equitable manner, consistent with its fiduciary
obligations to the Fund and such other clients.
4. REPRESENTATIONS AND WARRANTIES.
(a) The Sub-Adviser hereby represents and warrants to the Adviser as
follows:
(i) The Sub-Adviser is a corporation duly organized and in good
standing under the laws of the State of Ohio and is fully authorized to
enter into this Agreement and carry out its duties and obligations
hereunder.
(ii) The Sub-Adviser is registered as an investment adviser with
the Commission under the Investment Advisers Act of 1940 as amended (the
"Advisers Act"), and is registered or licensed as an investment adviser
under the laws of all applicable jurisdictions. The Sub-Adviser shall
maintain such registrations or licenses in effect at all times during
the term of this Agreement.
(iii) The Sub-Adviser at all times shall provide its best judgment
and effort to the Adviser in carrying out the Sub-Adviser's obligations
hereunder.
(b) The Adviser hereby represents and warrants to the Sub-Adviser as
follows:
(i) The Adviser is a corporation duly organized and in good
standing under the laws of the State of Ohio and is fully authorized to
enter into this Agreement and carry out its duties and obligations
hereunder.
3
<PAGE> 108
(ii) The Adviser is registered as an investment adviser with the
Commission under the Advisers Act, and is registered or licensed as an
investment adviser under the laws of all applicable jurisdictions. The
Adviser shall maintain such registrations or licenses in effect at all
times during the term of this Agreement.
(iii) The Company has been duly organized as a business trust under
the laws of the State of Delaware.
(iv) The Company is registered as an investment company with the
Commission under the 1940 Act, and shares of the each Fund are
registered for offer and sale to the public under the 1933 Act and all
applicable state securities laws where currently sold. Such
registrations will be kept in effect during the term of this Agreement.
5. COMPENSATION. As compensation for the services which the Sub-Adviser is
to provide or cause to be provided pursuant to Paragraph 3, with respect to each
Fund, the Adviser shall pay to the Sub-Adviser (or cause to be paid by the
Company directly to the Sub-Adviser) a fee, which shall be accrued daily and
paid in arrears on the first business day of each month, at the annual rate set
forth for the Fund on Schedule A, as a percentage of the average daily net
assets of the Fund during the preceding month (computed in the manner set forth
in the Fund's most recent Prospectus and Statement of Additional Information).
Average daily net assets shall be based upon determinations of net assets made
as of the close of business on each business day throughout such month. The fee
for any partial month shall be calculated on a proportionate basis, based upon
average daily net assets for such partial month. In the event that the total
expenses of a Fund exceed the limits on investment company expenses imposed by
any statute or any regulatory authority of any jurisdiction in which shares of
such Fund are qualified for offer and sale, the Sub-Adviser will bear such
excess in an amount which bears the same ratio to the amount of such excess that
the Adviser bears as the amount of sub-advisory fees payable pursuant to
Schedule A hereof bears to the amount of advisory fees payable to the Adviser by
the Company under the Advisory Agreement, except: (i) the Sub-Adviser shall not
be required to bear such excess to an extent greater than the compensation due
to the Sub-Adviser for the period for which such expense limitation is required
to be calculated unless such statute or regulatory authority shall so require,
and (ii) the Sub-Adviser shall not be required to bear the expenses of the Fund
to an extent which would result in the Fund's or Company's inability to qualify
as a regulated investment company under the provisions of the Code.
6. INTERESTED PERSONS. It is understood that, to the extent consistent with
applicable laws, the Trustees, officers and shareholders of the Company or the
Adviser are or may be or become interested in the Sub-Adviser as directors,
officers or otherwise and that directors, officers and shareholders of the
Sub-Adviser are or may be or become similarly interested in the Company or the
Adviser.
7. EXPENSES. The Sub-Adviser will pay all expenses incurred by it in
connection with its activities under this Agreement other than the cost of
securities (including brokerage commissions) purchased for or sold by the Funds.
8. NON-EXCLUSIVE SERVICES; LIMITATION OF SUB-ADVISER'S LIABILITY. The
services of the Sub-Adviser hereunder are not to be deemed exclusive, and the
Sub-Adviser may render similar services to others and engage in other
activities. The Sub-Adviser and its affiliates may enter into other agreements
with the Funds, the Company or the Adviser for providing additional services to
the Funds, the Company or the Adviser which are not covered by this Agreement,
and to receive additional compensation for such services. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser, or a breach of
fiduciary duty with respect to receipt of compensation, neither the Sub-Adviser
nor any of its directors, officers, shareholders, agents, or employees shall be
liable or responsible to the Adviser, the Company, the Funds or to any
shareholder of the Funds for any error of judgment or mistake of law or for any
act or omission in the course of, or connected with, rendering services
hereunder or for any loss suffered by the Adviser, the Company, a Fund, or any
shareholder of a Fund in connection with the performance of this Agreement.
4
<PAGE> 109
9. EFFECTIVE DATE; MODIFICATIONS; TERMINATION. This Agreement shall become
effective on , 1996, provided that it shall have been approved by a
majority of the outstanding voting securities of each Fund, in accordance with
the requirements of the 1940 Act, or such later date as may be agreed by the
parties following such shareholder approval.
(a) This Agreement shall continue in force until December 31, 1997.
Thereafter, this Agreement shall continue in effect as to each Fund for
successive annual periods, provided such continuance is specifically
approved at least annually (i) by a vote of the majority of the Trustees of
the Company who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by a vote of the Board of Trustees of the
Company or a majority of the outstanding voting securities of the Fund.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those Trustees of the
Company who are not interested persons of any party to this Agreement, cast
in person at a meeting called for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement as to any Fund(s) at any
time on sixty (60) days' prior written notice to the other, without payment
of any penalty. A termination of the Sub-Adviser may be effected as to any
particular Fund by the Adviser, by a vote of the Company's Board of
Trustees, or by vote of a majority of the outstanding voting securities of
the Fund. This Agreement shall terminate automatically in the event of its
assignment.
10. LIMITATION OF LIABILITY OF TRUSTEES AND SHAREHOLDERS. The
Sub-Adviser
acknowledges the following limitation of liability:
The terms "The Victory Portfolios" and "Trustees of The Victory Portfolios"
refer, respectively, to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Trust Instrument,
to which reference is hereby made and a copy of which is on file at the office
of the Secretary of State of the State of Delaware, such reference being
inclusive of any and all amendments thereto so filed or hereafter filed. The
obligations of "The Victory Portfolios" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities and are not binding upon any of the
Trustees, shareholders or representatives of the Company personally, but bind
only the assets of the Company, and all persons dealing with the Company or a
Fund must look solely to the assets of the Company or Fund for the enforcement
of any claims against the Company or Fund.
11. CERTAIN DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities," "assignment," "control," and "interested persons," when used
herein, shall have the respective meanings specified in the 1940 Act. References
in this Agreement to the 1940 Act and the Advisers Act shall be construed as
references to such laws as now in effect or as hereafter amended, and shall be
understood as inclusive of any applicable rules, interpretations and/or orders
adopted or issued thereunder by the Commission.
12. INDEPENDENT CONTRACTOR. The Sub-Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Company from time
to time, have no authority to act for or represent a Fund in any way or
otherwise be deemed an agent of a Fund.
13. STRUCTURE OF AGREEMENT. The Adviser and Sub-Adviser are entering into
this Agreement with regard to the respective Funds severally and not jointly.
The responsibilities and benefits set forth in this Agreement shall be deemed to
be effective as between the Adviser and Sub-Adviser in connection with each Fund
severally and not jointly. This Agreement is intended to govern only the
relationships between the Adviser, on the one hand, and the Sub-Adviser, on the
other hand, and is not intended to and shall not govern (i) the relationship
between the Adviser and any Fund, or (ii) the relationships among the respective
Funds.
14. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Ohio, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or the Advisers Act.
5
<PAGE> 110
15. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
16. NOTICES. Notices of any kind to be given to the Adviser hereunder by
the Sub-Adviser shall be in writing and shall be duly given if mailed or
delivered to the Adviser at 127 Public Square, Cleveland, Ohio 44114-1306,
Attention: W. Christopher Maxwell; with a copy to Ann Kowal Smith, Esq., or at
such other address or to such individual as shall be so specified by the Adviser
to the Sub-Adviser. Notices of any kind to be given to the Sub-Adviser hereunder
by the Adviser shall be in writing and shall be duly given if mailed or
delivered to the Sub-Adviser at 127 Public Square, Cleveland, Ohio 44114-1306,
Attention: Martin J. Walker; with a copy to Stacey L. Bauer, Esq., or at such
other address or to such individual as shall be so specified by the Sub-Adviser
to the Adviser. Notices shall be effective upon delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date written
above.
SOCIETY ASSET MANAGEMENT, INC. KEYCORP MUTUAL FUND ADVISERS, INC.
By: By:
- ----------------------------- -----------------------------------
Name: Name:
Title: Title:
6
<PAGE> 111
SCHEDULE A
For the Victory Balanced Fund, Diversified Stock Fund, Growth Fund, Stock
Index Fund and Value Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF SUB-ADVISORY FEE*
- ----------------------- -------------------------
<S> <C>
up to $10 .65%
next $15 .50
next $25 .40
above $50 .35
</TABLE>
For the Victory International Growth Fund, Ohio Regional Stock Fund and
Special Value Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF SUB-ADVISORY FEE*
- ----------------------- -------------------------
<S> <C>
up to $10 .90%
next $15 .70
next $25 .55
next $50 .45
</TABLE>
For the Victory Intermediate Fund, Investment Quality Bond Fund, Limited
Term Income Fund, Ohio Municipal Bond Fund, Government Bond Fund, Government
Mortgage Fund, National Municipal Bond Fund and New York Tax-Free Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF SUB-ADVISORY FEE*
- ----------------------- -------------------------
<S> <C>
up to $10 .40%
next $15 .30
next $25 .25
above $50 .20
</TABLE>
For the Victory Prime Obligations Fund, Tax-Free Money Market Fund, U.S.
Government Obligations Fund, Financial Reserves Fund, Institutional Money Market
Fund and Ohio Municipal Money Market Fund:
<TABLE>
<CAPTION>
NET ASSETS IN MILLIONS RATE OF SUB-ADVISORY FEE*
- ----------------------- -------------------------
<S> <C>
up to $10 .25%
next $15 .20
next $25 .15
above $50 .125
</TABLE>
- ---------------
* As a percentage of average daily net assets. Note, however, that the
Sub-Adviser shall have the right, but not the obligation, to voluntarily waive
any portion of the sub-advisory fee from time to time. Any such voluntary
waiver will be irrevocable and determined in advance of rendering
sub-investment advisory services by the Sub-Adviser, and shall be in writing
and signed by the parties hereto.
<PAGE> 112
EXHIBIT E
INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
KEYCORP MUTUAL FUND ADVISERS, INC.
AND
FIRST ALBANY ASSET MANAGEMENT CORPORATION
AGREEMENT made as of the day of , 1996, by and between KeyCorp
Mutual Fund Advisers, Inc., an Ohio corporation (the "Adviser"), and First
Albany Asset Management Corporation, a New York corporation (the "Sub-Adviser").
WHEREAS, the Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser provides investment advisory services to the series of
The Victory Portfolios, a Delaware business trust (the "Company"), which is
registered as an open-end, management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), pursuant to an Investment
Advisory Agreement dated , 1996 (the "Advisory Agreement"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the Fund for Income (the
"Fund"), a series of the Company, and the Sub-Adviser represents that it is
willing and possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to act as
investment subadviser to the Fund for the period and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Adviser has delivered to the Sub-Adviser
copies of each of the following documents along with all amendments thereto
through the date hereof, and will promptly deliver to it all future amendments
and supplements thereto, if any:
(a) the Company's Trust Instrument;
(b) the By-Laws of the Company;
(c) resolutions of the Board of Trustees of the Company authorizing
the execution and delivery of the Advisory Agreement and this Agreement;
(d) the most recent Post-Effective Amendment to the Company's
Registration Statement under the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act, on Form N-1A as filed with the Securities
and Exchange Commission (the "Commission");
(e) Notification of Registration of the Company under the 1940 Act on
Form N-8A as filed with the Commission; and
(f) the currently effective Prospectuses and Statements of Additional
Information of the Fund.
3. INVESTMENT ADVISORY SERVICES.
(a) Management of the Fund. The Sub-Adviser hereby undertakes to act
as investment subadviser to the Fund. The Sub-Adviser shall regularly
provide investment advice to the Fund and continuously supervise the
investment and reinvestment of cash, securities and other property
comprising the assets of the Fund and, in furtherance thereof, shall:
<PAGE> 113
(i) obtain and evaluate pertinent economic, statistical and
financial data, as well as other significant events and developments,
which affect the economy generally, the Fund's investment programs, and
the issuers of securities included in the Fund's portfolios and the
industries in which they engage, or which may relate to securities or
other investments which the Sub-Adviser may deem desirable for inclusion
in the Fund's portfolio;
(ii) determine which issuers and securities shall be included in
the portfolio of the Fund;
(iii) furnish a continuous investment program for the Fund;
(iv) in its discretion, and without prior consultation with but
subject to the supervision of the Adviser, buy, sell, lend and otherwise
trade any stocks, bonds and other securities and investment instruments
on behalf of the Fund; and
(v) take, on behalf of the Fund, all actions the Sub-Adviser may
deem necessary in order to carry into effect such investment program and
the Sub-Adviser's functions as provided above, including the making of
appropriate periodic reports to the Adviser and the Company's Board of
Trustees.
(b) Covenants. The Sub-Adviser shall carry out its investment
subadvisory responsibilities in a manner consistent with the investment
objectives, policies, and restrictions provided in: (i) the Fund's
Prospectus and Statement of Additional Information as revised and in effect
from time to time; (ii) the Company's Trust Instrument, By-Laws or other
governing instruments, as amended from time to time; (iii) the 1940 Act;
(iv) other applicable laws; and (v) such other investment policies,
procedures and/or limitations as may be adopted by the Company or the
Adviser with respect to the Fund and provided to the Sub-Adviser in
writing. The Sub-Adviser agrees to use reasonable efforts to manage the
Fund so that it will qualify, and continue to qualify, as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended, and regulations issued thereunder (the "Code"), except as may
be authorized to the contrary by the Company's Board of Trustees. The
management of the Fund by the Sub-Adviser shall at all times be subject to
the review of the Adviser and the Company's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the Sub-Adviser
shall keep the Fund's books and records required to be maintained by, or on
behalf of, the Fund with respect to subadvisory services rendered
hereunder. The Sub-Adviser agrees that all records which it maintains for
the Fund are the property of the Fund and it will promptly surrender any of
such records to the Fund upon the Fund's request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any such records of the Fund required to be preserved by such Rule.
(d) Reports, Evaluations and other Services. The Sub-Adviser shall
furnish reports, evaluations, information or analyses to the Adviser and
the Company with respect to the Fund and in connection with the
Sub-Adviser's services hereunder as the Adviser and/or the Company's Board
of Trustees may request from time to time or as the Sub-Adviser may
otherwise deem to be reasonably necessary. The Sub-Adviser may make
recommendations to the Adviser and the Company's Board of Trustees with
respect to the Company's policies, and shall carry out such policies as are
adopted by the Board of Trustees. The Sub-Adviser may, subject to review by
the Adviser, furnish such other services as the Sub-Adviser shall from time
to time determine to be necessary or useful to perform its obligations
under this Agreement.
(e) Purchase and Sale of Securities. The Sub-Adviser, at its own
expense, shall place all orders for the purchase and sale of portfolio
securities for the Fund with brokers or dealers selected by the Sub-
Adviser, which may include brokers or dealers affiliated with the Adviser
or the Sub-Adviser to the extent permitted by the 1940 Act and the
Company's policies and procedures applicable to the Fund. The Sub-Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which, under the circumstances, result in total costs or proceeds
being the most favorable to the Fund. In assessing the best overall terms
available for any transaction, the Sub-Adviser shall consider all factors
it deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and
2
<PAGE> 114
execution capability of the broker or dealer, research services provided to
the Sub-Adviser, and the reasonableness of the commission, if any, both for
the specific transaction and on a continuing basis. In no event shall the
Sub-Adviser be under any duty to obtain the lowest commission or the best
net price for the Fund on any particular transaction, nor shall the
Sub-Adviser be under any duty to execute any order in a fashion either
preferential to the Fund relative to other accounts managed by the
Sub-Adviser or otherwise materially adverse to such other accounts.
(f) Selection of Brokers or Dealers. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Sub-Adviser and/or the other accounts over which the Sub-Adviser exercises
investment discretion. The Sub-Adviser is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Sub-Adviser determines in good faith that
the total commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser with respect to accounts over which it
exercises investment discretion. The Sub-Adviser shall report to the Board
of Trustees of the Company regarding overall commissions paid by the Fund
and their reasonableness in relation to their benefits to the Fund.
(g) Aggregation of Securities Transactions. In executing portfolio
transactions for the Fund, the Sub-Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate
the securities to be sold or purchased with those of its other clients if,
in the Sub-Adviser's reasonable judgment, such aggregation (i) will result
in an overall economic benefit to the Fund, taking into consideration the
advantageous selling or purchase price, brokerage commission and other
expenses, and trading requirements, and (ii) is not inconsistent with the
policies set forth in the Company's registration statement and the Fund's
Prospectus and Statement of Additional Information. In such event, the
Sub-Adviser will allocate the securities so purchased or sold, and the
expenses incurred in the transaction, in an equitable manner, consistent
with its fiduciary obligations to the Fund and such other clients.
4. REPRESENTATIONS AND WARRANTIES.
(a) The Sub-Adviser hereby represents and warrants to the Adviser as
follows:
(i) The Sub-Adviser is a corporation duly organized and is in good
standing under the laws of the State of New York and is fully authorized
to enter into this Agreement and carry out its duties and obligations
hereunder.
(ii) The Sub-Adviser is registered as an investment adviser with
the Commission under the Investment Advisers Act of 1940, as amended,
and is registered or licensed as an investment adviser under the laws of
all applicable jurisdictions. The Sub-Adviser shall maintain such
registrations or licenses in effect at all times during the term of this
Agreement.
(iii) The Sub-Adviser at all times shall provide its best judgment
and effort to the Adviser in carrying out the Sub-Adviser's obligations
hereunder.
(b) The Adviser hereby represents and warrants to the Sub-Adviser as
follows:
(i) The Adviser is a corporation duly organized and is in good
standing under the laws of the State of Ohio and is fully authorized to
enter into this Agreement and carry out its duties and obligations
hereunder.
(ii) The Adviser is registered as an investment adviser with the
Commission under the Advisers Act and is registered or licensed as an
investment adviser under the laws of all applicable jurisdictions. The
Adviser shall maintain such registrations or licenses in effect at all
times during the term of this Agreement.
3
<PAGE> 115
(iii) The Company has been duly organized as a business trust under
the laws of the State of Delaware.
(iv) The Company is registered as an investment company with the
Commission under the 1940 Act and shares of the Fund are registered for
offer and sale to the public under the 1933 Act and all applicable state
securities laws where currently sold. Such registrations will be kept in
effect during the term of this Agreement.
5. COMPENSATION. As compensation for the services which the Sub-Adviser is
to provide or cause to be provided pursuant to Paragraph 3, the Adviser shall
pay to the Sub-Adviser (or cause to be paid by the Company directly to the
Sub-Adviser) an annual fee equal to .20% of the Fund's average daily net assets
during the preceding month (computed in the manner set forth in the Fund's most
recent Prospectus and Statement of Additional Information), which shall be
accrued daily and paid in arrears on the first business day of each month.
Average daily net assets shall be based upon determinations of net assets made
as of the close of business on each business day throughout the month. The fee
for any partial month shall be calculated on a proportionate basis, based upon
average daily net assets for such partial month. In the event that the total
expenses of the Fund exceed the limits on investment company expenses imposed by
any statute or any regulatory authority of any jurisdiction in which shares of
such Fund are qualified for offer and sale, the Sub-Adviser will bear such
excess in an amount which bears the same ratio to the amount of such excess that
the Adviser bears as the amount of sub-advisory fees payable pursuant hereto
bears to the amount of advisory fees payable to the Adviser by the Company under
the Advisory Agreement, except: (i) the Sub-Adviser shall not be required to
bear such excess to an extent greater than the compensation due to the
Sub-Adviser for the period for which such expense limitation is required to be
calculated unless such statute or regulatory authority shall so require, and
(ii) the Sub-Adviser shall not be required to bear the expenses of the Fund to
an extent which would result in the Fund's or Company's inability to qualify as
a regulated investment company under the provisions of the Code. The Sub-Adviser
shall have the right, but not the obligation, to voluntarily waive any portion
of the sub-advisory fee from time to time. Any such voluntary waiver will be
irrevocable and determined in advance of rendering sub-investment advisory
services by the Sub-Adviser, and shall be in writing and signed by the parties
hereto.
6. INTERESTED PERSONS. It is understood that, to the extent consistent with
applicable laws, the Trustees, officers and shareholders of the Company or the
Adviser are or may be or become interested in the Sub-Adviser as directors,
officers or otherwise and that directors, officers and shareholders of the
Sub-Adviser are or may be or become similarly interested in the Company or the
Adviser.
7. EXPENSES. The Sub-Adviser will pay all expenses incurred by it in
connection with its activities under this Agreement other than the cost of
securities (including brokerage commissions) purchased for or sold by the Fund.
8. NON-EXCLUSIVE SERVICES; LIMITATION OF SUB-ADVISER'S LIABILITY. The
services of the Sub-Adviser hereunder are not to be deemed exclusive and the
Sub-Adviser may render similar services to others and engage in other
activities. The Sub-Adviser and its affiliates may enter into other agreements
with the Fund, the Company or the Adviser for providing additional services to
the Fund, the Company or the Adviser which are not covered by this Agreement,
and to receive additional compensation for such services. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser, or a breach of
fiduciary duty with respect to receipt of compensation, neither the Sub-Adviser
nor any of its directors, officers, shareholders, agents, or employees shall be
liable or responsible to the Adviser, the Company, the Fund or to any
shareholder of the Fund for any error of judgment or mistake of law or for any
act or omission in the course of, or connected with, rendering services
hereunder or for any loss suffered by the Adviser, the Company, the Fund or any
shareholder of the Fund in connection with the performance of this Agreement.
9. EFFECTIVE DATE; MODIFICATIONS; TERMINATION. This Agreement shall become
effective on , 1996, provided that it shall have been approved by a
majority of the outstanding voting securities of the Fund, in accordance with
the requirements of the 1940 Act, or such later date as may be agreed by the
parties following such shareholder approval.
4
<PAGE> 116
(a) This Agreement shall continue in force until April 30, 1996.
Thereafter, this Agreement shall continue in effect as to the Fund for
successive annual periods, provided such continuance is specifically
approved at least annually (i) by a vote of the majority of the Trustees of
the Company who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by a vote of the Board of Trustees of the
Company or a majority of the outstanding voting securities of the Fund.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those Trustees of the
Company who are not interested persons of any party to this Agreement, cast
in person at a meeting called for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement as to the Fund at any time
on sixty (60) days' prior written notice to the other, without payment of
any penalty. A termination of the Sub-Adviser may be effected as to the
Fund by the Adviser, by a vote of the Company's Board of Trustees, or by
vote of a majority of the outstanding voting securities of the Fund. This
Agreement shall terminate automatically in the event of its assignment.
10. LIMITATION OF LIABILITY OF TRUSTEES AND SHAREHOLDERS. The
Sub-Adviser
acknowledges the following limitation of liability:
The terms "The Victory Portfolios" and "Trustees of The Victory Portfolios"
refer, respectively, to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Trust Instrument,
to which reference is hereby made and a copy of which is on file at the office
of the Secretary of State of the State of Delaware, such reference being
inclusive of any and all amendments thereto so filed or hereafter filed. The
obligations of "The Victory Portfolios" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities and are not binding upon any of the
Trustees, shareholders or representatives of the Company personally, but bind
only the assets of the Company, and all persons dealing with the Company or the
Fund must look solely to the assets of the Company or Fund for the enforcement
of any claims against the Company or Fund.
11. CERTAIN DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities," "assignment," "control," and "interested persons," when used
herein, shall have the respective meanings specified in the 1940 Act. References
in this Agreement to the 1940 Act and the Advisers Act shall be construed as
references to such laws as now in effect or as hereafter amended, and shall be
understood as inclusive of any applicable rules, interpretations and/or orders
adopted or issued thereunder by the Commission.
12. INDEPENDENT CONTRACTOR. The Sub-Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Company from time
to time, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
13. STRUCTURE OF AGREEMENT. This Agreement is intended to govern only the
relationship between the Adviser, on the one hand, and the Sub-Adviser, on the
other hand, and is not intended to and shall not govern (i) the relationship
between the Adviser and the Fund or any other series of the Company, or (ii) the
relationships among the respective series of the Company.
14. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Ohio, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or the Advisers Act.
15. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
16. NOTICES. Notices of any kind to be given to the Adviser hereunder by
the Sub-Adviser shall be in writing and shall be duly given if mailed or
delivered to the Adviser at 127 Public Square, Cleveland, Ohio 44114-1306,
Attention: W. Christopher Maxwell; with a copy to Stacey L. Bauer, Esq., or at
such other address or to such individual as shall be so specified by the Adviser
to the Sub-Adviser. Notices of any kind to be given to the Sub-Adviser hereunder
by the Adviser shall be in writing and shall be duly given if mailed or
delivered to the Sub-Adviser at 41 State Street, Albany, New York 12207,
Attention: ; with a copy
5
<PAGE> 117
to , or at such other address or to such individual as shall be so
specified by the Sub-Adviser to the Adviser. Notices shall be effective upon
delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date written
above.
FIRST ALBANY ASSET MANAGEMENT KEYCORP MUTUAL FUND ADVISERS,
INC.
CORPORATION
By: By:
- ---------------------------------- ----------------------------------
Name: Name:
Title: Title:
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<PAGE> 118
EXHIBIT F
INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
KEYCORP MUTUAL FUND ADVISERS, INC.
AND
T. ROWE PRICE ASSOCIATES, INC.
AGREEMENT made as of the day of , 1996, by and between KeyCorp
Mutual Fund Advisers, Inc., an Ohio corporation (the "Adviser"), and T. Rowe
Price Associates, Inc., a Maryland corporation (the "Sub-Adviser").
WHEREAS, the Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser provides investment advisory services to the series of
The Victory Portfolios, a Delaware business trust (the "Company"), which is
registered as an open-end, management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), pursuant to an Investment
Advisory Agreement dated , 1996 (the "Advisory Agreement"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the Special Growth Fund (the
"Fund"), a series of the Company, and the Sub-Adviser represents that it is
willing and possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to act as
investment subadviser to the Fund for the period and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Adviser has delivered to the Sub-Adviser
copies of each of the following documents along with all amendments thereto
through the date hereof, and will promptly deliver to it all future amendments
and supplements thereto, if any:
(a) the Company's Trust Instrument;
(b) the By-Laws of the Company;
(c) resolutions of the Board of Trustees of the Company authorizing
the execution and delivery of the Advisory Agreement and this Agreement;
(d) the most recent Post-Effective Amendment to the Company's
Registration Statement under the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act, on Form N-1A as filed with the Securities
and Exchange Commission (the "Commission");
(e) Notification of Registration of the Company under the 1940 Act on
Form N-8A as filed with the Commission; and
(f) the currently effective Prospectuses and Statements of Additional
Information of the Fund.
3. INVESTMENT ADVISORY SERVICES.
(a) Management of the Fund. The Sub-Adviser hereby undertakes to act
as investment subadviser to the Fund. The Sub-Adviser shall regularly
provide investment advice to the Fund and continuously supervise the
investment and reinvestment of cash, securities and other property
comprising the assets of the Fund and, in furtherance thereof, shall:
<PAGE> 119
(i) obtain and evaluate pertinent economic, statistical and
financial data, as well as other significant events and developments,
which affect the economy generally, the Fund's investment programs, and
the issuers of securities included in the Fund's portfolios and the
industries in which they engage, or which may relate to securities or
other investments which the Sub-Adviser may deem desirable for inclusion
in the Fund's portfolio;
(ii) determine which issuers and securities shall be included in
the portfolio of the Fund;
(iii) furnish a continuous investment program for the Fund;
(iv) in its discretion, and without prior consultation with but
subject to the supervision of the Adviser, buy, sell, lend and otherwise
trade any stocks, bonds and other securities and investment instruments
on behalf of the Fund; and
(v) take, on behalf of the Fund, all actions the Sub-Adviser may
deem necessary in order to carry into effect such investment program and
the Sub-Adviser's functions as provided above, including the making of
appropriate periodic reports to the Adviser and the Company's Board of
Trustees.
(b) Covenants. The Sub-Adviser shall carry out its investment
subadvisory responsibilities in a manner consistent with the investment
objectives, policies, and restrictions provided in: (i) the Fund's
Prospectus and Statement of Additional Information as revised and in effect
from time to time; (ii) the Company's Trust Instrument, By-Laws or other
governing instruments, as amended from time to time; (iii) the 1940 Act;
(iv) other applicable laws; and (v) such other investment policies,
procedures and/or limitations as may be adopted by the Company or the
Adviser with respect to the Fund and provided to the Sub-Adviser in
writing. The Sub-Adviser agrees to use reasonable efforts to manage the
Fund so that it will qualify, and continue to qualify, as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended, and regulations issued thereunder (the "Code"), except as may
be authorized to the contrary by the Company's Board of Trustees. The
management of the Fund by the Sub-Adviser shall at all times be subject to
the review of the Adviser and the Company's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the Sub-Adviser
shall keep the Fund's books and records required to be maintained by, or on
behalf of, the Fund with respect to subadvisory services rendered
hereunder. The Sub-Adviser agrees that all records which it maintains for
the Fund are the property of the Fund and it will promptly surrender any of
such records to the Fund upon the Fund's request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any such records of the Fund required to be preserved by such Rule.
(d) Reports, Evaluations and other Services. The Sub-Adviser shall
furnish reports, evaluations, information or analyses to the Adviser and
the Company with respect to the Fund and in connection with the
Sub-Adviser's services hereunder as the Adviser and/or the Company's Board
of Trustees may request from time to time or as the Sub-Adviser may
otherwise deem to be reasonably necessary. The Sub-Adviser may make
recommendations to the Adviser and the Company's Board of Trustees with
respect to the Company's policies, and shall carry out such policies as are
adopted by the Board of Trustees. The Sub-Adviser may, subject to review by
the Adviser, furnish such other services as the Sub-Adviser shall from time
to time determine to be necessary or useful to perform its obligations
under this Agreement.
(e) Purchase and Sale of Securities. The Sub-Adviser shall place all
orders for the purchase and sale of portfolio securities for the Fund with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or the Sub-Adviser to the extent
permitted by the 1940 Act and the Company's policies and procedures
applicable to the Fund. The Sub-Adviser shall use its best efforts to seek
to execute portfolio transactions at prices which, under the circumstances,
result in total costs or proceeds being the most favorable to the Fund. In
assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors it deems relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the
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<PAGE> 120
broker or dealer, research services provided to the Sub-Adviser, and the
reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. In no event shall the Sub-Adviser be under any
duty to obtain the lowest commission or the best net price for the Fund on
any particular transaction, nor shall the Sub-Adviser be under any duty to
execute any order in a fashion either preferential to the Fund relative to
other accounts managed by the Sub-Adviser or otherwise materially adverse
to such other accounts.
(f) Selection of Brokers or Dealers. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Sub-Adviser and/or the other accounts over which the Sub-Adviser exercises
investment discretion. The Sub-Adviser is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Sub-Adviser determines in good faith that
the total commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser with respect to accounts over which it
exercises investment discretion. The Sub-Adviser shall report to the Board
of Trustees of the Company regarding overall commissions paid by the Fund
and their reasonableness in relation to their benefits to the Fund.
(g) Aggregation of Securities Transactions. In executing portfolio
transactions for the Fund, the Sub-Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate
the securities to be sold or purchased with those of its other clients if,
in the Sub-Adviser's reasonable judgment, such aggregation (i) will result
in an overall economic benefit to the Fund, taking into consideration the
advantageous selling or purchase price, brokerage commission and other
expenses, and trading requirements, and (ii) is not inconsistent with the
policies set forth in the Company's registration statement and the Fund's
Prospectus and Statement of Additional Information. In such event, the
Sub-Adviser will allocate the securities so purchased or sold, and the
expenses incurred in the transaction, in an equitable manner, consistent
with its fiduciary obligations to the Fund and such other clients.
4. REPRESENTATIONS AND WARRANTIES.
(a) The Sub-Adviser hereby represents and warrants to the Adviser as
follows:
(i) The Sub-Adviser is a corporation duly organized and is in good
standing under the laws of the State of Maryland and is fully authorized
to enter into this Agreement and carry out its duties and obligations
hereunder.
(ii) The Sub-Adviser is registered as an investment adviser with
the Commission under the Investment Advisers Act of 1940, as amended,
and is registered or licensed as an investment adviser under the laws of
all applicable jurisdictions. The Sub-Adviser shall maintain such
registrations or licenses in effect at all times during the term of this
Agreement.
(iii) The Sub-Adviser at all times shall provide its best judgment
and effort to the Adviser in carrying out the Sub-Adviser's obligations
hereunder.
(b) The Adviser hereby represents and warrants to the Sub-Adviser as
follows:
(i) The Adviser is a corporation duly organized and is in good
standing under the laws of the State of Ohio and is fully authorized to
enter into this Agreement and carry out its duties and obligations
hereunder.
(ii) The Adviser is registered as an investment adviser with the
Commission under the Advisers Act and is registered or licensed as an
investment adviser under the laws of all applicable jurisdictions. The
Adviser shall maintain such registrations or licenses in effect at all
times during the term of this Agreement.
3
<PAGE> 121
(iii) The Company has been duly organized as a business trust under
the laws of the State of Delaware.
(iv) The Company is registered as an investment company with the
Commission under the 1940 Act and shares of the Fund are registered for
offer and sale to the public under the 1933 Act and all applicable state
securities laws where currently sold. Such registrations will be kept in
effect during the term of this Agreement.
5. COMPENSATION. As compensation for the services which the Sub-Adviser is
to provide or cause to be provided pursuant to Paragraph 3, the Adviser shall
pay to the Sub-Adviser (or cause to be paid by the Company directly to the
Sub-Adviser) an annual fee equal to .25% of the Fund's average daily net assets
during the preceding month (computed in the manner set forth in the Fund's most
recent Prospectus and Statement of Additional Information) up to one hundred
million dollars ($100,000,000) and .20% of the Fund's average daily net assets
in excess of such amount, which shall be accrued daily and paid in arrears on
the first business day of each month. Average daily net assets shall be based
upon determinations of net assets made as of the close of business on each
business day throughout such month. The fee for any partial month under this
Agreement shall be calculated on a proportionate basis, based upon average daily
net assets for such partial month. In the event that the total expenses of the
Fund exceed the limits on investment company expenses imposed by any statute or
any regulatory authority of any jurisdiction in which shares of such Fund are
qualified for offer and sale, the Sub-Adviser will bear such excess in an amount
which bears the same ratio to the amount of such excess that the Adviser bears
as the amount of subadvisory fees payable pursuant hereto bears to the amount of
advisory fees payable to the Adviser by the Company under the Advisory
Agreement, except: (i) the Sub-Adviser shall not be required to bear such excess
to an extent greater than the compensation due to the Sub-Adviser for the period
for which such expense limitation is required to be calculated unless such
statute or regulatory authority shall so require, and (ii) the Sub-Adviser shall
not be required to bear the expenses of the Fund to an extent which would result
in the Fund's or Company's inability to qualify as a regulated investment
company under the provisions of the Code. The Sub-Adviser shall have the right,
but not the obligation, to voluntarily waive any portion of the sub-advisory fee
from time to time. Any such voluntary waiver will be irrevocable and determined
in advance of rendering sub-investment advisory services by the Sub-Adviser, and
shall be in writing and signed by the parties hereto.
6. INTERESTED PERSONS. It is understood that, to the extent consistent
with applicable laws, the Trustees, officers and shareholders of the Company or
the Adviser are or may be or become interested in the Sub-Adviser as directors,
officers or otherwise and that directors, officers and shareholders of the
Sub-Adviser are or may be or become similarly interested in the Company or the
Adviser.
7. EXPENSES. The Sub-Adviser will pay all expenses incurred by it in
connection with its activities under this Agreement other than the cost of
securities (including brokerage commissions) purchased for or sold by the Fund.
8. NON-EXCLUSIVE SERVICES; LIMITATION OF SUB-ADVISER'S LIABILITY. The
services of the Sub-Adviser hereunder are not to be deemed exclusive and the
Sub-Adviser may render similar services to others and engage in other
activities. The Sub-Adviser and its affiliates may enter into other agreements
with the Fund, the Company or the Adviser for providing additional services to
the Fund, the Company or the Adviser which are not covered by this Agreement,
and to receive additional compensation for such services. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser, or a breach of
fiduciary duty with respect to receipt of compensation, neither the Sub-Adviser
nor any of its directors, officers, shareholders, agents, or employees shall be
liable or responsible to the Adviser, the Company, the Fund or to any
shareholder of the Fund for any error of judgment or mistake of law or for any
act or omission in the course of, or connected with, rendering services
hereunder or for any loss suffered by the Adviser, the Company, the Fund or any
shareholder of the Fund in connection with the performance of this Agreement.
4
<PAGE> 122
9. EFFECTIVE DATE; MODIFICATIONS; TERMINATION. This Agreement shall
become
effective on January 1, 1996, provided that it shall have been approved by a
majority of the outstanding voting securities of the Fund, in accordance with
the requirements of the 1940 Act, or such later date as may be agreed by the
parties following such shareholder approval.
(a) This Agreement shall continue in force until June 4, 1996.
Thereafter, this Agreement shall continue in effect as to the Fund for
successive annual periods, provided such continuance is specifically
approved at least annually (i) by a vote of the majority of the Trustees of
the Company who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by a vote of the Board of Trustees of the
Company or a majority of the outstanding voting securities of the Fund.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those Trustees of the
Company who are not interested persons of any party to this Agreement, cast
in person at a meeting called for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement as to the Fund at any time
on sixty (60) days' prior written notice to the other, without payment of
any penalty. A termination of the Sub-Adviser may be effected as to the
Fund by the Adviser, by a vote of the Company's Board of Trustees, or by
vote of a majority of the outstanding voting securities of the Fund. This
Agreement shall terminate automatically in the event of its assignment.
10. LIMITATION OF LIABILITY OF TRUSTEES AND SHAREHOLDERS. The
Sub-Adviser
acknowledges the following limitation of liability:
The terms "The Victory Portfolios" and "Trustees of The Victory Portfolios"
refer, respectively, to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Trust Instrument,
to which reference is hereby made and a copy of which is on file at the office
of the Secretary of State of the State of Delaware, such reference being
inclusive of any and all amendments thereto so filed or hereafter filed. The
obligations of "The Victory Portfolios" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities and are not binding upon any of the
Trustees, shareholders or representatives of the Company personally, but bind
only the assets of the Company, and all persons dealing with the Company or the
Fund must look solely to the assets of the Company or Fund for the enforcement
of any claims against the Company or Fund.
11. CERTAIN DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities," "assignment," "control," and "interested persons," when used
herein, shall have the respective meanings specified in the 1940 Act. References
in this Agreement to the 1940 Act and the Advisers Act shall be construed as
references to such laws as now in effect or as hereafter amended, and shall be
understood as inclusive of any applicable rules, interpretations and/or orders
adopted or issued thereunder by the Commission.
12. INDEPENDENT CONTRACTOR. The Sub-Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Company from time
to time, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
13. STRUCTURE OF AGREEMENT. This Agreement is intended to govern only the
relationship between the Adviser, on the one hand, and the Sub-Adviser, on the
other hand, and is not intended to and shall not govern (i) the relationship
between the Adviser and the Fund or any other series of the Company, or (ii) the
relationships among the respective series of the Company.
14. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Ohio, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or the Advisers Act.
15. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
5
<PAGE> 123
16. NOTICES. Notices of any kind to be given to the Adviser hereunder by
the Sub-Adviser shall be in writing and shall be duly given if mailed or
delivered to the Adviser at 127 Public Square, Cleveland, Ohio 44114-1306,
Attention: W. Christopher Maxwell; with a copy to Stacey L. Bauer, Esq., or at
such other address or to such individual as shall be so specified by the Adviser
to the Sub-Adviser. Notices of any kind to be given to the Sub-Adviser hereunder
by the Adviser shall be in writing and shall be duly given if mailed or
delivered to the Sub-Adviser at 100 East Pratt Street, Baltimore, Maryland
21202, Attention: Henry H. Hopkins, Esq., or at such other address or to such
individual as shall be so specified by the Sub-Adviser to the Adviser. Notices
shall be effective upon delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date written
above.
T. ROWE PRICE ASSOCIATES, INC. KEYCORP MUTUAL FUND ADVISERS, INC.
By: By:
------------------------------- --------------------------------
Name: Name:
Title: Title:
6
<PAGE> 124
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROXY STATEMENT....................................................................... 1
INTRODUCTION.......................................................................... 2
MATTERS TO BE ACTED ON................................................................ 6
PROPOSAL 1
APPROVAL OR DISAPPROVAL OF PROPOSED PLAN TO CONVERT THE VICTORY
PORTFOLIOS FROM A
MASSACHUSETTS BUSINESS TRUST TO A DELAWARE BUSINESS
TRUST........................... 6
Introduction........................................................................ 6
Description of the Current Company.................................................. 6
Description of the Successor Company................................................ 7
Similarities Between the Current Company and Successor Company...................... 8
Summary of the Conversion Plan...................................................... 9
Temporary Waiver of Certain Investment Policies..................................... 10
Federal Income Tax Consequences of the Conversion................................... 10
Evaluation by the Current Company's Trustees........................................ 10
PROPOSAL 2
APPROVAL OR DISAPPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
BETWEEN THE COMPANY AND
KEYCORP ADVISERS.................................................................... 11
Introduction........................................................................ 11
Similarities Between the Current and Proposed Advisory Agreements................... 12
Differences Between the Current and Proposed Advisory Agreements.................... 13
Board Considerations................................................................ 14
Additional Information Regarding Approvals.......................................... 14
Information About KeyCorp Advisers.................................................. 15
Fees and Fee Waivers................................................................ 16
PROPOSAL 3(A)
ELECTION OF TRUSTEES.................................................................. 18
Remuneration of Trustees and Certain Executive Officers............................. 20
Principal Executive Officers........................................................ 22
Ownership of Shares of the Funds.................................................... 23
Required Vote....................................................................... 23
PROPOSAL 3(B)
RATIFICATION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT PUBLIC
ACCOUNTANTS............ 23
Required Vote....................................................................... 23
PROPOSAL 4
APPROVAL OR DISAPPROVAL OF A NEW SUB-ADVISORY AGREEMENT BETWEEN
KEYCORP ADVISERS AND
SOCIETY............................................................................. 24
Introduction........................................................................ 24
Consideration and Proposal of the Sub-Advisory Agreement............................ 24
Description of the Proposed Society Agreement....................................... 24
Information About Society........................................................... 26
Business Management Agreement....................................................... 26
</TABLE>
i
<PAGE> 125
<TABLE>
<CAPTION>
PAGE
--
<S> <C>
PROPOSAL 5
APPROVAL OR DISAPPROVAL OF A NEW SUB-ADVISORY AGREEMENT FOR THE
FUND FOR INCOME
BETWEEN KEYCORP ADVISERS AND FIRST ALBANY........................................... 27
The Investment Adviser.............................................................. 27
Consideration and Proposal of the Sub-Advisory Agreement............................ 27
Description of the Proposed First Albany Agreement.................................. 28
Comparison of First Albany Agreement and Current Sub-Advisory Agreement............. 28
Information About First Albany...................................................... 29
PROPOSAL 6
APPROVAL OR DISAPPROVAL OF A NEW SUB-ADVISORY AGREEMENT FOR THE
SPECIAL GROWTH FUND
BETWEEN KEYCORP ADVISERS AND
T. ROWE PRICE....................................................................... 30
The Investment Adviser.............................................................. 30
Consideration and Proposal of the Sub-Advisory Agreement............................ 30
Description of the Proposed T. Rowe Agreement....................................... 30
Comparison of T. Rowe Agreement and Current Sub-Advisory Agreement.................. 31
Information About T. Rowe Price..................................................... 31
PROPOSAL 7
APPROVAL OR DISAPPROVAL OF A CHANGE OF THE MAXIMUM REMAINING
MATURITY OF PORTFOLIO
INSTRUMENTS TO CONFORM WITH THE MATURITY PERMITTED UNDER RULE
2a-7 UNDER THE 1940
ACT................................................................................. 34
PROPOSAL 8
APPROVAL OR DISAPPROVAL OF A RESTATEMENT OF THE INVESTMENT
OBJECTIVES................. 34
Reasons for the Proposals Regarding the Investment Objectives....................... 38
PROPOSALS 9A-P -- APPROVAL OR DISAPPROVAL OF CERTAIN CHANGES TO THE
FUNDAMENTAL
INVESTMENT POLICIES OF THE FUNDS.................................................... 39
Introduction to Proposals 9a-p...................................................... 39
Introduction to Proposals 9a-e...................................................... 41
PROPOSAL 9A
AMENDMENT TO EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTIONS
CONCERNING BORROWING AND
SENIOR SECURITIES................................................................... 41
Explanation of the proposed changes................................................. 41
PROPOSAL 9B
ELIMINATION OF EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING INVESTMENT
FOR THE PURPOSE OF EXERCISING CONTROL............................................... 42
PROPOSAL 9C
AMENDMENT TO EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING THE MAKING OF
LOANS............................................................................... 42
PROPOSAL 9D
RECLASSIFICATION OF EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING
PURCHASES OF SECURITIES ON MARGIN................................................... 43
PROPOSAL 9E
AMENDMENT TO EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING UNDERWRITING
THE SECURITIES OF OTHER ISSUERS..................................................... 43
PROPOSAL 9F
AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING
DIVERSIFICATION..................................................................... 44
</TABLE>
ii
<PAGE> 126
<TABLE>
<CAPTION>
PAGE
--
<S> <C>
PROPOSAL 9G
AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING
CONCENTRATION OF INVESTMENT......................................................... 45
PROPOSAL 9H
AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT RESTRICTIONS
CONCERNING COMMODITIES
AND REAL ESTATE..................................................................... 48
PROPOSAL 9I
AMENDMENT OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING INVESTMENTS
IN OTHER INVESTMENT COMPANIES....................................................... 50
PROPOSAL 9J
RECLASSIFICATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTION REGARDING
SECURITIES IN WHICH AFFILIATES HAVE INVESTED........................................ 51
PROPOSAL 9K
RECLASSIFICATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTION REGARDING
SECURITIES OF UNSEASONED ISSUERS.................................................... 51
PROPOSAL 9L
AMENDMENT OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING INVESTMENTS
IN RESTRICTED AND ILLIQUID SECURITIES............................................... 52
PROPOSAL 9M
RECLASSIFICATION OF CERTAIN FUNDAMENTAL INVESTMENT RESTRICTION OF
THE TAX-FREE MONEY
MARKET FUND CONCERNING THE USE OF OPTIONS........................................... 53
PROPOSAL 9N
RECLASSIFICATION OF A FUNDAMENTAL INVESTMENT RESTRICTION OF
CERTAIN FUNDS CONCERNING
THE USE OF OPTIONS.................................................................. 54
PROPOSAL 9O
AMENDMENT OF THE FUNDAMENTAL INVESTMENT RESTRICTION OF THE U.S.
GOVERNMENT OBLIGATIONS
FUND CONCERNING THE PERMISSIBLE INVESTMENTS IN GOVERNMENT
SECURITIES................ 54
PROPOSAL 9P
CHANGE OF THE OHIO MUNICIPAL BOND FUND'S STATUS FROM DIVERSIFIED TO
NONDIVERSIFIED
UNDER THE 1940 ACT.................................................................. 55
Additional Information Regarding Proposals 9a-p..................................... 55
OTHER INFORMATION..................................................................... 56
VOTING INFORMATION AND DISCRETION OF ATTORNEYS NAMED IN THE
PROXY..................... 56
SUBMISSION OF PROPOSALS FOR THE NEXT MEETING OF
SHAREHOLDERS.......................... 59
</TABLE>
Schedule 1 -- Comparison of Trust Provisions
Schedule 2 -- Business Management Fees
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
A Plan of Conversion to a Delaware Business Trust
B Delaware Trust Instrument
C Investment Advisory Agreement with KeyCorp Advisers
D Society Sub-Advisory Agreement
E First Albany Sub-Advisory Agreement (Fund for Income)
F T. Rowe Price Sub-Advisory Agreement (Special Growth Fund)
</TABLE>
iii
<PAGE> 127
THE VICTORY PORTFOLIOS
VICTORY LIMITED TERM INCOME FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Limited
Term Income Fund (the "Fund") as of October 13, 1995, you are entitled to vote.
The items you are being asked to vote upon, which are described below, were
considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 128
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Limited Term Income Fund and look
forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 129
THE VICTORY PORTFOLIOS
VICTORY INVESTMENT QUALITY BOND FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory
Investment Quality Bond Fund (the "Fund") as of October 13, 1995, you are
entitled to vote. The items you are being asked to vote upon, which are
described below, were considered and unanimously approved by the Company's Board
of Trustees at a meeting held September 20, 1995. For more information on any of
the proposals, please refer to the page number of the Proxy Statement referenced
at the end of each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 130
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Investment Quality Bond Fund and
look forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 131
THE VICTORY PORTFOLIOS
VICTORY SPECIAL GROWTH FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Special
Growth Fund (the "Fund") as of October 13, 1995, you are entitled to vote. The
items you are being asked to vote upon, which are described below, were
considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. The purpose for this
proposal is to consolidate certain administrative operations within one new
entity, and it is expected that KeyCorp Advisers will continue to employ the
same fund management personnel that now serve the Fund. See page 11 of the
Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposal will be considered by shareholders of this Fund:
ITEM 6 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and T. Rowe Price Associates, Inc. ("T.
Rowe Price"). This arrangement will provide for continuity of investment
management operations, and it is expected that T. Rowe Price will continue to
employ the same portfolio management personnel. See page 30 of the Proxy
Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Special Growth Fund and look
forward to your continuing support as part of the Victory Funds family.
<PAGE> 132
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 133
THE VICTORY PORTFOLIOS
VICTORY SPECIAL VALUE FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Special
Value Fund (the "Fund") as of October 13, 1995, you are entitled to vote. The
items you are being asked to vote upon, which are described below, were
considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 134
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Special Value Fund and look forward
to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 135
THE VICTORY PORTFOLIOS
VICTORY OHIO MUNICIPAL MONEY MARKET FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Ohio
Municipal Money Market Fund (the "Fund") as of October 13, 1995, you are
entitled to vote. The items you are being asked to vote upon, which are
described below, were considered and unanimously approved by the Company's Board
of Trustees at a meeting held September 20, 1995. For more information on any of
the proposals, please refer to the page number of the Proxy Statement referenced
at the end of each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposal will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Ohio Municipal Money Market Fund
and look forward to your continuing support as part of the Victory Funds family.
<PAGE> 136
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 137
THE VICTORY PORTFOLIOS
VICTORY PRIME OBLIGATIONS FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Prime
Obligations Fund (the "Fund") as of October 13, 1995, you are entitled to vote.
The items you are being asked to vote upon, which are described below, were
considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 7 asks shareholders of the Fund to approve a change in the maximum
remaining maturity for each portfolio security which may be purchased by the
Fund from 13 months to 397 days in order to conform with applicable law and to
provide additional flexibility to the Fund. See page 34 of the Proxy
Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
<PAGE> 138
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Prime Obligations Fund and look
forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 139
THE VICTORY PORTFOLIOS
VICTORY BALANCED FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds (" Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Balanced
Fund (the "Fund") as of October 13, 1995, you are entitled to vote. The items
you are being asked to vote upon, which are described below, were considered and
unanimously approved by the Company's Board of Trustees at a meeting held
September 20, 1995. For more information on any of the proposals, please refer
to the page number of the Proxy Statement referenced at the end of each
proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a SubAdviser (see Item 4
below). The purpose for this proposal is to consolidate certain administrative
operations within one new entity, and it is expected that KeyCorp Advisers
will continue to employ the same fund management personnel that now serve the
Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 140
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember TO SIGN AND RETURN ALL PROXY CARDS you
receive.
We appreciate your commitment to the Victory Balanced Fund and look forward to
your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 141
THE VICTORY PORTFOLIOS
VICTORY FUND FOR INCOME
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Fund for
Income (the "Fund") as of October 13, 1995, you are entitled to vote. The items
you are being asked to vote upon, which are described below, were considered and
unanimously approved by the Company's Board of Trustees at a meeting held
September 20, 1995. For more information on any of the proposals, please refer
to the page number of the Proxy Statement referenced at the end of the each
proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. The purpose for this
proposal is to consolidate certain administrative operations within one new
entity, and it is expected that KeyCorp Advisers will continue to employ the
same fund management personnel that now serve the Fund. See page 11 of the
Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposal will be considered by shareholders of this Fund:
ITEM 5 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and First Albany Asset Management
Corporation ("First Albany"). This arrangement will provide for continuity of
investment management operations, and it is expected that First Albany will
continue to employ the same portfolio management personnel. See page 28 of the
Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Fund for Income and look forward to
your continuing support as part of the Victory Funds family.
<PAGE> 142
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 143
THE VICTORY PORTFOLIOS
VICTORY VALUE FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Value
Fund (the "Fund") as of October 13, 1995, you are entitled to vote. The items
you are being asked to vote upon, which are described below, were considered and
unanimously approved by the Company's Board of Trustees at a meeting held
September 20, 1995. For more information on any of the proposals, please refer
to the page number of the Proxy Statement referenced at the end of each
proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 144
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Value Fund and look forward to your
continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 145
THE VICTORY PORTFOLIOS
VICTORY U.S. GOVERNMENT OBLIGATIONS FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory U.S.
Government Obligations Fund (the "Fund") as of October 13, 1995, you are
entitled to vote. The items you are being asked to vote upon, which are
described below, were considered and unanimously approved by the Company's Board
of Trustees at a meeting held September 20, 1995. For more information on any of
the proposals, please refer to the page number of the Proxy Statement referenced
at the end of each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 7 asks shareholders of the Fund to approve a change in the maximum
remaining maturity for each portfolio security which may be purchased by the
Fund from 13 months to 397 days in order to conform with applicable law and to
provide additional flexibility to the Fund. See page 34 of the Proxy
Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions,
<PAGE> 146
to, among other things, modernize the investment objective, policies and
restrictions and provide greater flexibility in managing the Fund. See page 34
and page 39 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory U.S. Government Obligations Fund
and look forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 147
THE VICTORY PORTFOLIOS
VICTORY TAX-FREE MONEY MARKET FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Tax-Free
Money Market Fund (the "Fund") as of October 3, 1995, you are entitled to vote.
The items you are being asked to vote upon, which are described below, were
considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a SubAdviser (see Item 4
below). The purpose for this proposal is to consolidate certain administrative
operations within one new entity, and it is expected that KeyCorp Advisers
will continue to employ the same fund management personnel that now serve the
Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 7 asks shareholders of the Fund to approve a change in the maximum
remaining maturity for each portfolio security which may be purchased by the
Fund from 13 months to 397 days in order to provide additional flexibility to
the Fund. See page 34 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions,
<PAGE> 148
to, among other things, modernize the investment objective, policies and
restrictions and provide greater flexibility in managing the Fund. See page 34
and page 39 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Tax-Free Money Market Fund and look
forward to your continuing support as part of the Victory Funds family.
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 149
THE VICTORY PORTFOLIOS
VICTORY GOVERNMENT MORTGAGE FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory
Government Mortgage Fund (the "Fund") as of October 13, 1995, you are entitled
to vote. The items you are being asked to vote upon, which are described below,
were considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a SubAdviser (see Item 4
below). The purpose for this proposal is to consolidate certain administrative
operations within one new entity, and it is expected that KeyCorp Advisers
will continue to employ the same fund management personnel that now serve the
Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
<PAGE> 150
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Government Mortgage Fund and look
forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 151
THE VICTORY PORTFOLIOS
VICTORY GOVERNMENT BOND FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory
Government Bond Fund (the "Fund") as of October 13, 1995, you are entitled to
vote. The items you are being asked to vote upon, which are described below,
were considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposal will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Government Bond Fund and look
forward to your continuing support as part of the Victory Funds family.
<PAGE> 152
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 153
THE VICTORY PORTFOLIOS
VICTORY DIVERSIFIED STOCK FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory
Diversified Stock Fund (the "Fund") as of October 13, 1995, you are entitled to
vote. The items you are being asked to vote upon, which are described below,
were considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a SubAdviser (see Item 4
below). The purpose for this proposal is to consolidate certain administrative
operations within one new entity, and it is expected that KeyCorp Advisers
will continue to employ the same fund management personnel that now serve the
Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
<PAGE> 154
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Diversified Stock Fund and look
forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 155
THE VICTORY PORTFOLIOS
VICTORY INTERNATIONAL GROWTH FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory
International Growth Fund (the "Fund") as of October 13, 1995, you are entitled
to vote. The items you are being asked to vote upon, which are described below,
were considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 156
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory International Growth Fund and look
forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 157
THE VICTORY PORTFOLIOS
VICTORY GROWTH FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Growth
Fund (the "Fund") as of October 13, 1995, you are entitled to vote. The items
you are being asked to vote upon, which are described below, were considered and
unanimously approved by the Company's Board of Trustees at a meeting held
September 20, 1995. For more information on any of the proposals, please refer
to the page number of the Proxy Statement referenced at the end of each
proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund only:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 158
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Growth Fund and look forward to
your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 159
THE VICTORY PORTFOLIOS
VICTORY INTERMEDIATE INCOME FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory
Intermediate Income Fund (the "Fund") as of October 13, 1995, you are entitled
to vote. The items you are being asked to vote upon, which are described below,
were considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 160
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Intermediate Income Fund and look
forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 161
THE VICTORY PORTFOLIOS
VICTORY INSTITUTIONAL MONEY MARKET FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory
Institutional Money Market Fund (the "Fund") as of October 13, 1995, you are
entitled to vote. The items you are being asked to vote upon, which are
described below, were considered and unanimously approved by the Company's Board
of Trustees at a meeting held September 20, 1995. For more information on any of
the proposals, please refer to the page number of the Proxy Statement referenced
at the end of each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposal will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Institutional Money Market Fund and
look forward to your continuing support as part of the Victory Funds family.
<PAGE> 162
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 163
THE VICTORY PORTFOLIOS
VICTORY FINANCIAL RESERVES FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Financial
Reserves Fund (the "Fund") as of October 13, 1995, you are entitled to vote. The
items you are being asked to vote upon, which are described below, were
considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same Fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposal will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Financial Reserves Fund and look
forward to your continuing support as part of the Victory Funds family.
<PAGE> 164
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 165
THE VICTORY PORTFOLIOS
VICTORY OHIO MUNICIPAL BOND FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Ohio
Municipal Bond Fund (the "Fund") as of October 13, 1995, you are entitled to
vote. The items you are being asked to vote upon, which are described below,
were considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 9 asks shareholders to approve changes to certain of the Fund's
fundamental investment restrictions, to, among other things, modernize the
investment objective, policies and restrictions and provide greater
flexibility in managing the Fund. See page 39 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
<PAGE> 166
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Ohio Municipal Bond Fund and look
forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 167
THE VICTORY PORTFOLIOS
VICTORY NEW YORK TAX-FREE FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory New York
Tax-Free Fund (the "Fund") as of October 13, 1995, you are entitled to vote. The
items you are being asked to vote upon, which are described below, were
considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposal will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory New York Tax-Free Fund and look
forward to your continuing support as part of the Victory Funds family.
<PAGE> 168
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 169
THE VICTORY PORTFOLIOS
VICTORY STOCK INDEX FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Stock
Index Fund (the "Fund") as of October 13, 1995, you are entitled to vote. The
items you are being asked to vote upon, which are described below, were
considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and 39 of the
Proxy Statement.
<PAGE> 170
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Stock Index Fund and look forward
to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 171
THE VICTORY PORTFOLIOS
VICTORY NATIONAL MUNICIPAL BOND FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory National
Municipal Bond Fund (the "Fund") as of October 13, 1995, you are entitled to
vote. The items you are being asked to vote upon, which are described below,
were considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory
<PAGE> 172
National Municipal Bond Fund and look forward to your continuing support as part
of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 173
THE VICTORY PORTFOLIOS
VICTORY OHIO REGIONAL STOCK FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
(800) 362-5365
November 3, 1995
Dear Shareholder:
The enclosed Proxy Statement relates to a meeting of shareholders of each
of the underlying funds ("Funds") of The Victory Portfolios (the "Company"),
scheduled for December 1, 1995. As a record owner of shares of Victory Ohio
Regional Stock Fund (the "Fund") as of October 13, 1995, you are entitled to
vote. The items you are being asked to vote upon, which are described below,
were considered and unanimously approved by the Company's Board of Trustees at a
meeting held September 20, 1995. For more information on any of the proposals,
please refer to the page number of the Proxy Statement referenced at the end of
each proposal.
Approval of the new investment advisory and sub-advisory agreements will
NOT RESULT IN AN INCREASE IN ADVISORY FEES, nor will there be a material change
in services provided. The proposals will not have a material impact on the
Fund's current investment management program for the foreseeable future.
The following proposals will be considered by shareholders of each of the Funds
of the Company:
ITEM 1 asks all shareholders of the Company to approve a conversion of the
Company to a Delaware business trust. Management believes this change will
provide more protection to shareholders and flexibility for operations. See
page 6 of the Proxy Statement.
ITEM 2 asks all shareholders of the Company to approve a new investment
advisory agreement between the Company and KeyCorp Mutual Fund Advisers, Inc.
("KeyCorp Advisers"), an affiliate of Society Asset Management Inc.
("Society"), the Fund's current investment adviser. Society will continue to
provide day-to-day management services to the Fund as a Sub-Adviser (see Item
4 below). The purpose for this proposal is to consolidate certain
administrative operations within one new entity, and it is expected that
KeyCorp Advisers will continue to employ the same fund management personnel
that now serve the Fund. See page 11 of the Proxy Statement.
ITEM 3(A) asks all shareholders of the Company to elect seven Trustees to
serve as members of the Board of Trustees of the Company. See page 18 of the
Proxy Statement.
ITEM 3(B) asks all shareholders of the Company to ratify the selection of
Coopers & Lybrand LLP as independent auditors for the next fiscal year. See
page 23 of the Proxy Statement.
The following proposals will be considered by shareholders of this Fund:
ITEM 4 asks shareholders of the Fund to approve a new Investment Sub-Advisory
Agreement between KeyCorp Advisers and Society, subject to shareholder
approval of Item 2. This arrangement will provide for continuity of investment
management operations -- Society expects to continue to employ the same
portfolio management personnel. See page 24 of the Proxy Statement.
ITEM 8 asks shareholders of the Fund to approve a restatement of the Fund's
investment objective and ITEM 9 asks shareholders to approve changes to
certain of the Fund's fundamental investment restrictions, to, among other
things, modernize the investment objective, policies and restrictions and
provide greater flexibility in managing the Fund. See page 34 and page 39 of
the Proxy Statement.
<PAGE> 174
YOUR BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE
PROPOSALS AND
RECOMMENDS THAT YOU VOTE FOR EACH OF THE PROPOSALS CONTAINED IN
THE PROXY
STATEMENT.
Please take a moment to sign and return your proxy card in the enclosed
postage paid envelope. Remember to SIGN AND RETURN ALL PROXY CARDS you receive.
We appreciate your commitment to the Victory Ohio Regional Stock Fund and look
forward to your continuing support as part of the Victory Funds family.
In order to hold the meeting, a quorum of the Fund's shares must be present
in person or by proxy. You can help reduce the cost of additional mailings by
promptly returning your signed proxy. No matter how many shares you own, your
vote counts!
Sincerely,
/s/ Scott A. Englehart
SCOTT A. ENGLEHART
Secretary
<PAGE> 175
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY INVESTMENT QUALITY
BOND FD
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 113
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g and 9h
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's Investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 176
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY SPECIAL GROWTH
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 6
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
6. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and T. Rowe Price
Associates, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 177
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY SPECIAL VALUE FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 113
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g and 9h
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's Investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 178
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY GOVERNMENT
MORTGAGE FD
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 111
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, and 9h
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's Investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 179
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY BALANCED FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 113
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g and 9h
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's Investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 180
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY VALUE FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 113
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g and 9h
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's Investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 181
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY STOCK INDEX FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 113
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g and 9h
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's Investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 182
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY PRIME OBLIGATIONS
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 118
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 7, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g, 9h, 9i, 9j, 9k, and
9n
FOR all WITHHOLD INSTRUCTIONS: To withhold authority
to vote
nominees listed authority to for any individual nominee, write that
(except as vote for all nominee's name in the space provided below.
marked to the nominees
contrary at right)
/ / / /
_________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new
Investment Advisory Agreement with KeyCorp
Mutual Fund Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new
Investment Sub-Advisory Agreement between
KeyCorp Mutual Fund Advisers, Inc. and
Society Asset Management, Inc. / / / / / /
7. Vote on Proposal to approve a change in the
maximum remaining maturity of portfolio
instruments. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
9i. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in other investment
companies. / / / / / /
9j. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities in which affiliates have
invested. / / / / / /
9k. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities of unseasoned issuers. / / / / / /
9l. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in restricted and
illiquid securities. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE __________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE __________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON.
</TABLE>
<PAGE> 183
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY TAX-FREE MONEY
MARKET FD
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 120
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 7, 8, 9a, 9b, 9c, 9d, 9e, 9g, 9h, 9i, 9j, 9k, 9l, 9m,
and 9n
FOR all WITHHOLD INSTRUCTIONS: To withhold authority
to vote
nominees listed authority to for any individual nominee, write that
(except as vote for all nominee's name in the space provided below.
marked to the nominees
contrary at right)
/ / / /
_________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new
Investment Advisory Agreement with KeyCorp
Mutual Fund Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new
Investment Sub-Advisory Agreement between
KeyCorp Mutual Fund Advisers, Inc. and
Society Asset Management, Inc. / / / / / /
7. Vote on Proposal to approve a change in the
maximum remaining maturity of portfolio
instruments. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
9i. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in other investment
companies. / / / / / /
9j. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities in which affiliates have
invested. / / / / / /
9k. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities of unseasoned issuers. / / / / / /
9l. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in restricted and
illiquid securities. / / / / / /
9m. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding use of options (fundamental
policies). / / / / / /
9n. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding use of options. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE __________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE __________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON.
</TABLE>
<PAGE> 184
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY LIMITED TERM
INCOME FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 117
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g, 9h, 9i, 9j, 9k, and
9n
FOR all WITHHOLD INSTRUCTIONS: To withhold authority
to vote
nominees listed authority to for any individual nominee, write that
(except as vote for all nominee's name in the space provided below.
marked to the nominees
contrary at right)
/ / / /
_________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new
Investment Advisory Agreement with KeyCorp
Mutual Fund Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new
Investment Sub-Advisory Agreement between
KeyCorp Mutual Fund Advisers, Inc. and
Society Asset Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
9i. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in other investment
companies. / / / / / /
9j. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities in which affiliates have
invested. / / / / / /
9k. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities of unseasoned issuers. / / / / / /
9n. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding use of options. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE __________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE __________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON.
</TABLE>
<PAGE> 185
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY OHIO REGIONAL
STOCK FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 117
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g, 9h, 9i, 9j, 9k, and
9n
FOR all WITHHOLD INSTRUCTIONS: To withhold authority
to vote
nominees listed authority to for any individual nominee, write that
(except as vote for all nominee's name in the space provided below.
marked to the nominees
contrary at right)
/ / / /
_________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new
Investment Advisory Agreement with KeyCorp
Mutual Fund Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new
Investment Sub-Advisory Agreement between
KeyCorp Mutual Fund Advisers, Inc. and
Society Asset Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
9i. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in other investment
companies. / / / / / /
9j. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities in which affiliates have
invested. / / / / / /
9k. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities of unseasoned issuers. / / / / / /
9n. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding use of options. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE __________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE __________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON.
</TABLE>
<PAGE> 186
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY DIVERSIFIED STOCK
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 117
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g, 9h, 9i, 9j, 9k, and
9n
FOR all WITHHOLD INSTRUCTIONS: To withhold authority
to vote
nominees listed authority to for any individual nominee, write that
(except as vote for all nominee's name in the space provided below.
marked to the nominees
contrary at right)
/ / / /
_________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new
Investment Advisory Agreement with KeyCorp
Mutual Fund Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new
Investment Sub-Advisory Agreement between
KeyCorp Mutual Fund Advisers, Inc. and
Society Asset Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
9i. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in other investment
companies. / / / / / /
9j. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities in which affiliates have
invested. / / / / / /
9k. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities of unseasoned issuers. / / / / / /
9n. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding use of options. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE __________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE __________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON.
</TABLE>
<PAGE> 187
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY NEW YORK TAX-FREE
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 4
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 188
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY NEW YORK TAX-FREE
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 4
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 189
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY INTERNATIONAL
GROWTH FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 117
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g, 9h, 9i, 9j, 9k, and 9l
FOR all WITHHOLD INSTRUCTIONS: To withhold authority
to vote
nominees listed authority to for any individual nominee, write that
(except as vote for all nominee's name in the space provided below.
marked to the nominees
contrary at right)
/ / / /
_________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new
Investment Advisory Agreement with KeyCorp
Mutual Fund Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new
Investment Sub-Advisory Agreement between
KeyCorp Mutual Fund Advisers, Inc. and
Society Asset Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
9i. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in other investment
companies. / / / / / /
9j. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities in which affiliates have
invested. / / / / / /
9k. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities of unseasoned issuers. / / / / / /
9l. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in restricted and
illiquid securities. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE __________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE __________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON.
</TABLE>
<PAGE> 190
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY NAT'L MUNI BOND
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 4
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 191
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY NAT'L MUNI BOND
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 4
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 192
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY GOVERNMENT BOND
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 4
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 193
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY GOVERNMENT BOND
FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 4
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 194
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY FUND FOR INCOME
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 5
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
5. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and First Albany
Asset Management, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 195
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY INSTL MONEY
MARKET FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 104
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, and 4
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 196
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY GROWTH FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 113
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g, and 9h
FOR all WITHHOLD INSTRUCTIONS: To withhold authority
to vote
nominees listed authority to for any individual nominee, write that
(except as vote for all nominee's name in the space provided below.
marked to the nominees
contrary at right)
/ / / /
_________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new
Investment Advisory Agreement with KeyCorp
Mutual Fund Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new
Investment Sub-Advisory Agreement between
KeyCorp Mutual Fund Advisers, Inc. and
Society Asset Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE __________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE __________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON.
</TABLE>
<PAGE> 197
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY OHIO MUNICIPAL
BOND FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 117
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9g, 9h, 9i, 9j, 9k, 9l, 9n,
and 9p
FOR all WITHHOLD INSTRUCTIONS: To withhold authority
to vote
nominees listed authority to for any individual nominee, write that
(except as vote for all nominee's name in the space provided below.
marked to the nominees
contrary at right)
/ / / /
_________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new
Investment Advisory Agreement with KeyCorp
Mutual Fund Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new
Investment Sub-Advisory Agreement between
KeyCorp Mutual Fund Advisers, Inc. and
Society Asset Management, Inc. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
9i. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in other investment
companies. / / / / / /
9j. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities in which affiliates have
invested. / / / / / /
9k. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding securities of unseasoned issuers. / / / / / /
9l. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investments in restricted and
illiquid securities. / / / / / /
9n. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding use of options. / / / / / /
9p. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding change of status from a diversified
to a nondiversified fund. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE __________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE __________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON.
</TABLE>
<PAGE> 198
<TABLE>
PLEASE SEE VOTING INSTRUCTION #2
ON REVERSE
THE VICTORY INTERMEDIATE
INCOME FUND
SPECIAL MEETING OF
SHAREHOLDERS
AS OF 10/13 TO BE HELD ON 12/01/95
AT 9:00 A.M.
ACCOUNT NO:
CUSIP NO: 113
DIRECTORS RECOMMEND A VOTE FOR ELECTION OF THE FOLLOWING
TRUSTEES:
3a. Robert G. Brown, Edward P. Campbell, Harry Gazelle, Thomas F. Morrissey, Stanley I.
Landgraf, Leigh A. Wilson and
H. Patrick Swygert.
AND A VOTE FOR PROPOSALS 1, 2, 3b, 4, 8, 9a, 9b, 9c, 9d, 9e, 9f, 9g and 9h
FOR all WITHHOLD INSTRUCTIONS: TO WITHHOLD
AUTHORITY TO VOTE
nominees listed authority to FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT
(except as vote for all NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.
marked to the nominees
contrary at right)
/ / / /
__________________________________________________
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Vote on Proposal to approve a conversion of
the Company to a Delaware business trust. / / / / / /
2. Vote on Proposal to approve a new Investment
Advisory Agreement with KeyCorp Mutual Fund
Advisers, Inc. / / / / / /
3b. Vote on Proposal to ratify the selection of
independent auditors, Coopers & Lybrand
L.L.P. / / / / / /
4. Vote on Proposal to approve a new Investment
Sub-Advisory Agreement between KeyCorp
Mutual Fund Advisers, Inc. and Society Asset
Management, Inc. / / / / / /
8. Vote on Proposal to approve a restatement of
the Fund's Investment objective. / / / / / /
9a. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding borrowing and senior securities. / / / / / /
9b. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding investment for the purpose of
exercising control. / / / / / /
9c. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding making of loans. / / / / / /
9d. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding purchases of securities on margin. / / / / / /
9e. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding underwriting securities of other
issuers. / / / / / /
9f. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding diversification. / / / / / /
9g. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding concentration of investments. / / / / / /
9h. Vote on Proposal to approve changes to the
Fund's fundamental investment restriction
regarding commodities and real estate. / / / / / /
NOTE: Such other business as may
properly
come before the meeting or any
adjournment
thereof.
SIGNATURE ___________________________________ DATE __________
PLEASE MARK ALL BOXES LIKE THIS / X /
SIGNATURE ___________________________________ DATE __________
NOTE: Please sign exactly as your name appears on this Proxy. When signing in a PLEASE
'X' HERE ONLY IF YOU PLAN TO
fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, ----
etc., please so indicate. Corporate and partnership proxies should be signed ATTEND
THE MEETING AND VOTE YOUR
by an authorized person indicating the person's title. SHARES IN PERSON
/ /
</TABLE>
<PAGE> 199
PROXY VOTING INSTRUCTIONS
THE FOLLOWING CONSTITUTES THE REVERSE SIDE OF EACH OF THE PREVIOUS
PROXY CARDS
TO OUR CLIENTS:
WE HAVE BEEN REQUESTED TO FORWARD TO YOU THE ENCLOSED PROXY
MATERIAL RELATIVE TO
SECURITIES HELD BY US IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR
NAME. SUCH
SECURITIES CAN BE VOTED ONLY BY US AS THE HOLDER OF RECORD. WE SHALL
BE PLEASED
TO VOTE YOUR SECURITIES IN ACCORDANCE WITH YOUR WISHES. IF YOU WILL
EXECUTE THE
FORM AND RETURN IT TO US PROMPTLY IN THE BUSINESS REPLY ENVELOPE,
ALSO ENCLOSED.
IT IS UNDERSTOOD THAT, IF YOU SIGN WITHOUT OTHERWISE MARKING THE
FORM, THE
SECURITIES WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS
ON ALL MATTERS
TO BE CONSIDERED AT THE MEETING.
FOR THIS MEETING, THE EXTENT OF OUR AUTHORITY TO VOTE YOUR
SECURITIES IN THE
ABSENCE OF YOUR INSTRUCTIONS CAN BE DETERMINED BY REFERRING TO THE
APPLICABLE
VOTING INSTRUCTION NUMBER INDICATED ON THE FACE OF YOUR FORM.
VOTING INSTRUCTION NUMBER 1 -- WE URGE YOU TO SEND IN YOUR
INSTRUCTIONS SO THAT
WE MAY VOTE YOUR SECURITIES IN ACCORDANCE WITH YOUR WISHES.
HOWEVER, THE RULES
OF THE NEW YORK STOCK EXCHANGE PROVIDE THAT IF INSTRUCTIONS ARE NOT
RECEIVED
FROM YOU BY THE TENTH DAY BEFORE THE MEETING, THE PROXY MAY BE
GIVEN AT
DISCRETION BY THE HOLDER OF RECORD OF THE SECURITIES, ON THE TENTH
DAY. IF PROXY
MATERIAL WAS MAILED AT LEAST 15 DAYS PRIOR TO MEETING DATE; ON THE
FIFTEENTH DAY
IF PROXY MATERIAL WAS MAILED 25 DAYS OR MORE PRIOR TO MEETING DATE.
IF YOU ARE
UNABLE TO COMMUNICATE WITH US BY SUCH DATE, WE WILL,
NEVERTHELESS FOLLOW YOUR INSTRUCTIONS, EVEN IF OUR DISCRETIONARY
VOTE HAS
ALREADY BEEN GIVEN, PROVIDED YOUR INSTRUCTIONS ARE RECEIVED PRIOR
TO THE MEETING
DATE.
VOTING INSTRUCTION NUMBER 2 -- WE WISH TO CALL YOUR ATTENTION TO THE
FACT THAT,
UNDER THE RULES OF THE NEW YORK STOCK EXCHANGE, WE CANNOT VOTE
YOUR SECURITIES
ON ONE OR MORE OF THE MATTERS TO BE ACTED UPON AT THE MEETING
WITHOUT YOUR
SPECIFIC VOTING INSTRUCTIONS. IF WE DO NOT HEAR FROM YOU BY THE TENTH
DAY BEFORE
THE MEETING, WE MAY VOTE YOUR SECURITIES IN OUR DISCRETION TO THE
EXTENT
PERMITTED BY THE RULES OF THE EXCHANGE, ON THE TENTH DAY, IF PROXY
MATERIAL WAS
MAILED AT LEAST 15 DAYS PRIOR TO THE MEETING DATE; ON THE FIFTEENTH
DAY IF PROXY
MATERIAL WAS MAILED 25 DAYS OR MORE PRIOR TO MEETING DATE. IF YOU
ARE UNABLE TO
COMMUNICATE WITH US BY SUCH DATE, WE WILL NEVERTHELESS FOLLOW
YOUR VOTING
INSTRUCTIONS, EVEN IF OUR DISCRETIONARY VOTE HAS ALREADY BEEN GIVEN,
PROVIDED
YOUR INSTRUCTIONS ARE RECEIVED PRIOR TO THE MEETING DATE.
VOTING INSTRUCTION NUMBER 3 -- IN ORDER FOR YOUR SECURITIES TO BE
REPRESENTED AT
THE MEETING, IT WILL BE NECESSARY FOR US TO HAVE YOUR SPECIFIC VOTING
INSTRUCTIONS. PLEASE DATE, SIGN AND RETURN YOUR VOTING INSTRUCTIONS
TO US
PROMPTLY IN THE RETURN ENVELOPE PROVIDED.
VOTING INSTRUCTION NUMBER 4 - REMINDER -- WE HAVE PREVIOUSLY SENT
YOU PROXY
SOLICITING MATERIAL PERTAINING TO THE MEETING OF SHAREHOLDERS OF
THE COMPANY
INDICATED.
ACCORDING TO OUR LATEST RECORDS, WE HAVE NOT AS YET RECEIVED YOUR
VOTING
INSTRUCTION ON THE MATTERS TO BE CONSIDERED AT THIS MEETING AND THE
COMPANY HAS
REQUESTED US TO COMMUNICATE WITH YOU IN AN ENDEAVOR TO HAVE YOUR
SECURITIES
VOTED.
THE VOTING INSTRUCTIONS REQUEST PERTAINS TO SECURITIES CARRIED BY US
IN YOUR
ACCOUNT BUT NOT REGISTERED IN YOUR NAME. SUCH SECURITIES CAN BE
VOTED ONLY BY US
AS THE HOLDER OF RECORD OF THE SECURITIES.
PLEASE DATE, SIGN AND RETURN YOUR VOTING INSTRUCTIONS TO US
PROMPTLY IN THE
RETURN ENVELOPE PROVIDED.
- --------------------------------------------------------------------------------
SHOULD YOU WISH TO ATTEND THE MEETING AND VOTE IN PERSON, PLEASE
CHECK THE BOX
ON THE FRONT OF THE FORM FOR THIS PURPOSE. A LEGAL PROXY COVERING
YOUR
SECURITIES WILL BE ISSUED TO YOU.
<PAGE> 200
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
BALANCED FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Balanced Fund (the "Fund") of The Victory Portfolios
(the "Company"), a Massachusetts business trust, does hereby constitute and
appoint Kathleen Dennis and Karen Haber, or either of them, the attorneys and
proxies of the undersigned with full power of substitution and appointment,
for, and in the name, place and stead, of the undersigned to vote all the
undersigned's shares of beneficial interest of the Fund at the Special Meeting
of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus, Ohio on
December 1, 1995, at 9:30 A.M., Eastern time, and at any and all adjournments
thereof, in the manner set forth on the reverse side of this card. THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE VICTORY
PORTFOLIOS.
Please refer to the Proxy Statement for a discussion of the proposals set forth
on the reverse side of this card. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 A
<PAGE> 201
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (d)Purchases of Securities on Margin
(g)Concentration of Investment
(b)Investment for Purposes of Exercising Control (e)Underwriting Securities of Other Issuers
(h)Commodities and Real Estate
(c)Making of Loans (f)Diversification
A
</TABLE>
<PAGE> 202
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
VALUE FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Value Fund (the "Fund") of The Victory Portfolios
(the "Company"), a Massachusetts business trust, does hereby constitute and
appoint Kathleen Dennis and Karen Haber, or either of them, the attorneys and
proxies of the undersigned with full power of substitution and appointment,
for, and in the name, place and stead, of the undersigned to vote all the
undersigned's shares of beneficial interest of the Fund at the Special Meeting
of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus, Ohio on
December 1, 1995, at 9:30 A.M., Eastern time, and at any and all adjournments
thereof, in the manner set forth on the reverse side of this card. THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE VICTORY
PORTFOLIOS.
Please refer to the Proxy Statement for a discussion of the proposals set forth
on the reverse side of this card. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 B
<PAGE> 203
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (d)Purchases of Securities on Margin
(g)Concentration of Investment
(b)Investment for Purposes of Exercising Control (e)Underwriting Securities of Other Issuers
(h)Commodities and Real Estate
(c)Making of Loans (f)Diversification
B
</TABLE>
<PAGE> 204
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Growth Fund (the "Fund") of The Victory Portfolios
(the "Company"), a Massachusetts business trust, does hereby constitute and
appoint Kathleen Dennis and Karen Haber, or either of them, the attorneys and
proxies of the undersigned with full power of substitution and appointment,
for, and in the name, place and stead, of the undersigned to vote all the
undersigned's shares of beneficial interest of the Fund at the Special Meeting
of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus, Ohio on
December 1, 1995, at 9:30 A.M., Eastern time, and at any and all adjournments
thereof, in the manner set forth on the reverse side of this card. THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE VICTORY
PORTFOLIOS.
Please refer to the Proxy Statement for a discussion of the proposals set forth
on the reverse side of this card. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 C
<PAGE> 205
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (d)Purchases of Securities on Margin
(g)Concentration of Investment
(b)Investment for Purposes of Exercising Control (e)Underwriting Securities of Other Issuers
(h)Commodities and Real Estate
(c)Making of Loans (f)Diversification
C
</TABLE>
<PAGE> 206
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
INTERMEDIATE INCOME FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Intermediate Income Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 D
<PAGE> 207
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (d)Purchases of Securities on Margin
(g)Concentration of Investment
(b)Investment for Purposes of Exercising Control (e)Underwriting Securities of Other Issuers
(h)Commodities and Real Estate
(c)Making of Loans (f)Diversification
D
</TABLE>
<PAGE> 208
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
INVESTMENT QUALITY BOND FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Investment Quality Bond Fund (the "Fund") of The
Victory Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 E
<PAGE> 209
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (d)Purchases of Securities on Margin
(g)Concentration of Investment
(b)Investment for Purposes of Exercising Control (e)Underwriting Securities of Other Issuers
(h)Commodities and Real Estate
(c)Making of Loans (f)Diversification
E
</TABLE>
<PAGE> 210
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
SPECIAL VALUE FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Special Value Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 F
<PAGE> 211
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (d)Purchases of Securities on Margin
(g)Concentration of Investment
(b)Investment for Purposes of Exercising Control (e)Underwriting Securities of Other Issuers
(h)Commodities and Real Estate
(c)Making of Loans (f)Diversification
F
</TABLE>
<PAGE> 212
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
STOCK INDEX FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Stock Index Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 G
<PAGE> 213
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (d)Purchases of Securities on Margin
(g)Concentration of Investment
(b)Investment for Purposes of Exercising Control (e)Underwriting Securities of Other Issuers
(h)Commodities and Real Estate
(c)Making of Loans (f)Diversification
G
</TABLE>
<PAGE> 214
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
OHIO REGIONAL STOCK FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Ohio Regional Stock Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 H
<PAGE> 215
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (e)Underwriting Securities of Other Issuers
(i)Investments in Other
Investment Companies
(b)Investment for Purposes of Exercising Control (f)Diversification
(j)Securities in Which
Affiliates Have Invested
(c)Making of Loans (g)Concentration of Investment (k)Securities
of Unseasoned
Issuers
(d)Purchases of Securities on Margin (h)Commodities and Real Estate
(n)Use of Options
</TABLE>
<PAGE> 216
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
DIVERSIFIED STOCK FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Diversified Stock Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 I
<PAGE> 217
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (e)Underwriting Securities of Other Issuers
(i)Investments in Other
Investment Companies
(b)Investment for Purposes of Exercising Control (f)Diversification
(j)Securities in Which
Affiliates Have Invested
(c)Making of Loans (g)Concentration of Investment (k)Securities
of Unseasoned
Issuers
(d)Purchases of Securities on Margin (h)Commodities and Real Estate
(n)Use of Options I
</TABLE>
<PAGE> 218
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
LIMITED TERM INCOME FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Limited Term Income Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 J
<PAGE> 219
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (e)Underwriting Securities of Other Issuers
(i)Investments in Other
Investment Companies
(b)Investment for Purposes of Exercising Control (f)Diversification
(j)Securities in Which
Affiliates Have Invested
(c)Making of Loans (g)Concentration of Investment (k)Securities
of Unseasoned
Issuers
(d)Purchases of Securities on Margin (h)Commodities and Real Estate
(n)Use of Options J
</TABLE>
<PAGE> 220
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
FINANCIAL RESERVES FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Financial Reserves Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 K
<PAGE> 221
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
K
</TABLE>
<PAGE> 222
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
GOVERNMENT BOND FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Government Bond Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 L
<PAGE> 223
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
L
</TABLE>
<PAGE> 224
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
INSTITUTIONAL MONEY MARKET FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Institutional Money Market Fund (the "Fund") of The
Victory Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 M
<PAGE> 225
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
M
</TABLE>
<PAGE> 226
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
NATIONAL MUNICIPAL BOND FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the National Municipal Bond Fund (the "Fund") of The
Victory Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 N
<PAGE> 227
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
N
</TABLE>
<PAGE> 228
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
NEW YORK TAX-FREE FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the New York Tax-Free Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 O
<PAGE> 229
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
O
</TABLE>
<PAGE> 230
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
OHIO MUNICIPAL MONEY MARKET FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Ohio Municipal Money Market Fund (the "Fund") of The
Victory Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 P
<PAGE> 231
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
P
</TABLE>
<PAGE> 232
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
FUND FOR INCOME
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Fund for Income (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 Q
<PAGE> 233
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
5. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and First Albany Asset Management Corporation.
Q
</TABLE>
<PAGE> 234
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
GOVERNMENT MORTGAGE FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Government Mortgage Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 R
<PAGE> 235
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C>
(a)Borrowing and Senior Securities (d)Purchases of Securities on Margin
(b)Investment for Purposes of Exercising Control (e)Underwriting Securities of Other Issuers
(c)Making of Loans (h)Commodities and Real Estate
R
</TABLE>
<PAGE> 236
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
INTERNATIONAL GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the International Growth Fund (the "Fund") of The
Victory Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 S
<PAGE> 237
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (e)Underwriting Securities of Other Issuers
(i)Investments in Other
Investment Companies
(b)Investment for Purposes of Exercising Control (f)Diversification
(j)Securities in Which
Affiliates Have Invested
(c)Making of Loans (g)Concentration of Investment (k)Securities
of Unseasoned
Issuers
(d)Purchases of Securities on Margin (h)Commodities and Real Estate
(l)Investments in Restricted
and Illiquid Securities S
</TABLE>
<PAGE> 238
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
OHIO MUNICIPAL BOND FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Ohio Municipal Bond Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 T
<PAGE> 239
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (g)Concentration of Investment
(l)Investments in Restricted and
Illiquid Securities
(b)Investment for Purposes of Exercising Control (h)Commodities and Real Estate
(n)Use of Options
(c)Making of Loans (i)Investments in Other Investment (p)Change
of Status to
Companies Nondiversified Fund
(d)Purchases of Securities on Margin (j)Securities in Which Affiliates
Have Invested
(e)Underwriting Securities of Other Issuers (k)Securities of Unseasoned Issuers
T
</TABLE>
<PAGE> 240
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
PRIME OBLIGATIONS FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Prime Obligations Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 U
<PAGE> 241
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
7. Vote on Proposal to approve a change in the maximum remaining maturity of portfolio
instruments. / / / / / /
8. Vote on Proposal to approve a restatement of the Fund's investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (e)Underwriting Securities of Other Issuers
(i)Investments in Other
Investment Companies
(b)Investment for Purposes of Exercising Control (f)Diversification
(j)Securities in Which
Affiliates Have Invested
(c)Making of Loans (g)Concentration of Investment (k)Securities
of Unseasoned
Issuers
(d)Purchases of Securities on Margin (h)Commodities and Real Estate
(l)Investments in Restricted
and Illiquid Securities U
</TABLE>
<PAGE> 242
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
SPECIAL GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Special Growth Fund (the "Fund") of The Victory
Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 V
<PAGE> 243
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
6. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and T. Rowe Price Associates, Inc.
V
</TABLE>
<PAGE> 244
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
TAX-FREE MONEY MARKET FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the Tax-Free Money Market Fund (the "Fund") of The
Victory Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 W
<PAGE> 245
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
7. Vote on Proposal to approve a change in the maximum remaining maturity of portfolio
instruments. / / / / / /
8. Vote on Proposal to approve a restatement of the Fund's Investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (g)Concentration of Investment
(l)Investments in Restricted and
Illiquid Securities
(b)Investment for Purposes of Exercising Control (h)Commodities and Real Estate
(m)Use of Options policy
(c)Making of Loans (i)Investments in Other Investment (n)Use of
Options
Companies
(d)Purchases of Securities on Margin (j)Securities in Which Affiliates
Have Invested
(e)Underwriting Securities of Other Issuers (k)Securities of Unseasoned Issuers
W
</TABLE>
<PAGE> 246
1678alt
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
IN ORDER TO HOLD THE MEETING, A QUORUM OF A FUND'S SHARES MUST BE
PRESENT IN
PERSON OR BY PROXY. YOU CAN HELP REDUCE THE COST OF ADDITIONAL
MAILINGS BY
PROMPTLY RETURNING YOUR SIGNED PROXY. NO MATTER HOW MANY SHARES
YOU OWN, YOUR
VOTE COUNTS!!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THE VICTORY PORTFOLIOS
U.S. GOVERNMENT OBLIGATIONS FUND
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 1, 1995
Know all men by these presents, that the undersigned holder of shares of
beneficial interest of the U.S. Government Obligations Fund (the "Fund") of The
Victory Portfolios (the "Company"), a Massachusetts business trust, does hereby
constitute and appoint Kathleen Dennis and Karen Haber, or either of them, the
attorneys and proxies of the undersigned with full power of substitution and
appointment, for, and in the name, place and stead, of the undersigned to vote
all the undersigned's shares of beneficial interest of the Fund at the Special
Meeting of Shareholders of the Fund to be held at 3435 Stelzer Road, Columbus,
Ohio on December 1, 1995, at 9:30 A.M., Eastern time, and at any and all
adjournments thereof, in the manner set forth on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE
VICTORY
PORTFOLIOS. Please refer to the Proxy Statement for a discussion of the
proposals set forth on the reverse side of this card. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting.
NOTE: The numerical designation of
each item on the reverse side
corresponds to its Proposal number
in the Proxy Statement; any Proxy
Statement Proposals which are
inapplicable to the Fund have been
omitted from this Proxy Card.
Please sign exactly as name
appears on this card. When shares
are held by joint tenants, all
should sign. When signing as
executor, administrator, trustee
or guardian, please give title. If
corporation or partnership, sign
in entity's name and by authorized
person.
__________________________________
Signature
__________________________________
Signature (if held jointly)
Dated:____________________, 1995 X
<PAGE> 247
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
IF YOU RECEIVED MORE THAN ONE PROXY
CARD, PLEASE BE SURE TO RETURN ALL CARDS!
---
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO VOTE, MARK AN X IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. THIS
PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MARKED AS TO ANY PROPOSAL(S), THIS PROXY WILL BE VOTED FOR
APPROVAL OF SUCH PROPOSAL(S).
<S> <C> <C> <C>
For Against Abstain
1. Vote on Proposal to approve a conversion of the Company to a Delaware business trust.
/ / / / / /
2. Vote on Proposal to approve a new Investment Advisory Agreement with KeyCorp Mutual
Fund Advisers, Inc. / / / / / /
3a. Vote on Proposal to elect new Board members; the nominees are:
R. Brown E. Campbell H. Gazelle T. Morrissey S. Landgraf L. Wilson H.P. Swygert
For Withhold For All Except
/ / / / / / TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
3b. Vote on Proposal to ratify the selection of independent auditors, Coopers and Lybrand L.L.P.
/ / / / / /
4. Vote on Proposal to approve a new Investment Sub-Advisory Agreement between KeyCorp
Mutual Fund / / / / / /
Advisers, Inc. and Society Asset Management, Inc.
7. Vote on Proposal to approve a change in the maximum remaining maturity of portfolio
instruments. / / / / / /
8. Vote on Proposal to approve a restatement of the Fund's Investment objective.
/ / / / / /
9. Vote on Proposals to approve changes to the Fund's fundamental investment restrictions. The
lettering of the items below matches
the lettering of the Proposals.
FOR the changes to each restriction Abstain For All Except FOR ANY CHANGES
YOU DO NOT WISH TO APPROVE,
listed below / / / / / / STRIKE A LINE THROUGH THE
RESTRICTION BELOW.
<S> <C> <C>
(a)Borrowing and Senior Securities (h)Commodities and Real Estate
(o)Investments in Government
Securities
(b)Investment for Purposes of Exercising Control (i)Investments in Other Investment
Companies
(c)Making of Loans (j)Securities in Which Affiliates
Have Invested
(d)Purchases of Securities on Margin (k)Securities of Unseasoned Issuers
(e)Underwriting Securities of Other Issuers (l)Investments in Restricted and Illiquid
Securities X
</TABLE>
