As filed, via EDGAR, with the Securities and Exchange Commission on February 3,
1998
File No.: 333-42837
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. 2
[ ] Post-Effective Amendment No. __
(check appropriate box or boxes)
-------------------
THE VICTORY PORTFOLIOS
(Exact Name of Registrant as Specified in Charter)
1-800-539-3863
(Area Code and Telephone Number)
3435 Stelzer Road, Columbus, Ohio 43219-3035
(Address of Principal Executive Offices)
-------------------
Michael Sullivan
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-3035
(Name and address of agent for service)
Copies to:
William J. Blake
Key Asset Management Inc.
127 Public Square
Cleveland, Ohio 44114
Jay G. Baris
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
-------------------
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Section 24(f) of the Investment Company Act of 1940,
as amended.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
THE VICTORY PORTFOLIOS
Cross Reference Sheet
Items Required by Form N-14
<TABLE>
<CAPTION>
PART A
N-14
Item No. Item Caption Prospectus Caption
<S> <C> <C>
1. Beginning of Registration Statement Cross Reference Sheet;
and Outside Front Cover Page of Front Cover Page.
Prospectus
2. Beginning and Outside Back Cover
Page of Prospectus Table of Contents.
3. Fee Table, Synopsis Synopsis; Comparison of the Funds'
Information and Risk Factors Investment Objectives, Policies, and
Risks; Comparison of Fees and
Expenses.
4. Information About the Transaction Reasons for the Transaction;
Information about the Transaction.
5. Information About the Registrant Comparison of the Funds' Investment
Objectives, Policies, and Risks;
Information about the Funds;
Additional Information.
6. Information About the Company Comparison of the Funds'
Being Acquired Investment Objectives, Policies, and
Risks ; Information about the
Funds; Additional Information.
7. Voting Information Information Relating to Voting
Matters.
8. Interest of Certain Persons and Information About the Funds.
Experts
9. Additional Information Required Inapplicable.
for Reoffering by Persons Deemed
to be Underwriters
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART B
N-14 Statement of Additional
Item No. Item Caption Information Caption
<S> <C> <C>
10. Cover Page Cover Page.
11. Table of Contents Cover Page.
12. Additional Information About
the Registrant Statement of Additional Information
of The Victory Portfolios dated
March 1, 1997.
13. Additional Information About
the Company Being Acquired Inapplicable.
14. Financial Statements Audited annual financial statements
of The Victory Portfolios as of
October 31, 1997; Audited annual
financial statements of Key Mutual
Funds as of November 30, 1997; Pro-forma
combined financial statements of the
Victory Stock Index Fund, Victory
Special Growth Fund, Victory
Diversified Stock Fund, Key Stock
Index Fund, SBSF Capital Growth
Fund, and SBSF Fund, as of
October 31, 1997.
PART C
N-14
Item No. Item Caption Part C Caption
15. Indemnification Indemnification.
16. Exhibits Exhibits.
17. Undertakings Undertakings.
</TABLE>
<PAGE>
EXPLANATORY NOTE
THE REGISTRANT HAS FILED THE INFORMATION IN THE PART A AND PART B IN
PRE-EFFECTIVE AMENDMENT NO. 1 TO ITS REGISTRATION STATEMENT ON FORM N-14 ON
JANUARY 30, 1998, (ACCESSION NUMBER 0000922423-98-000087) AND ARE HEREBY
INCORPORATED HEREIN BY REFERENCE. THE REGISTRANT HAS NOT AMENDED ITS PART A AND
PART B.
<PAGE>
Part C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
THE VICTORY PORTFOLIOS
PART C
Item 15. Indemnification.
Article X, Section 10.02 of the Registrant's Delaware Trust Instrument,
incorporated herein as Exhibit 1 hereto, provides for the indemnification of
Registrant's Trustees and officers, as follows:
"Section 10.02 Indemnification.
(a) Subject to the exceptions and limitations contained in Subsection
10.02(b):
(i) every person who is, or has been, 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, 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
<PAGE>
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 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."
Indemnification of the Registrant's principal underwriter, custodian, fund
accountant, and transfer agent is provided for, respectively, in Section V of
the Distribution Agreement incorporated by reference as Exhibit 7(a) hereto,
Section 28 of the Custody Agreement incorporated by reference as Exhibit 9
hereto, Section 5 of the Registrant's Fund Accounting Agreement dated May 31,
1995 between the Registrant and BISYS Fund Services Ohio, Inc. which was filed
as Exhibit 9(d) to Post-Effective Amendment No. 22 of the Registrant's
Registration Statement on Form N-1A filed on August 28, 1995, and Section 7 of
the Transfer Agency and Service Agreement dated July 12, 1996 between the
Registrant and State Street Bank and Trust Company filed as Exhibit 6(a) to
Post-Effective Amendment No. 30 to the Registrant's Registration Statement on
Form N-1A. Registrant has obtained from a major insurance carrier a trustee's
and officer's liability policy covering certain types of errors and omissions.
In no event will Registrant indemnify any of its trustees, officers, employees
or agents against any liability to which such person would otherwise be subject
by reason of his willful misfeasance, bad faith, or gross negligence in the
performance of his duties, or by reason of his reckless disregard of the duties
involved in the conduct of his office or under his agreement with Registrant.
Registrant will comply with Rule 484 under the Securities Act of 1933 and
Release 11330 under the Investment Company Act of 1940 in connection with any
indemnification.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to trustees, officers, and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Investment Company
Act of 1940, as amended, and is therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer, or controlling
person of Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Investment
Company Act of 1940, as amended, and will be governed by the final adjudication
of such issue.
<PAGE>
Item 16. Exhibits.
Exhibit No.
EX-99.1 Delaware Trust Instrument dated December 6, 1995 is
incorporated herein by reference to Exhibit 99.B1(a) to
Post-Effective Amendment No. 26 to the Registrant's
Registration Statement on Form N-1A filed electronically on
December 28, 1995, accession number 0000950152-95-003085.
EX-99.2 By-Laws adopted December 6, 1995 are incorporated herein by
reference to Exhibit 99.B2 to Post-Effective Amendment No.
26 to the Registrant's Registration Statement on Form N-1A
filed electronically on December 28, 1995, accession number
0000950152-95-003085.
EX-99.3 Inapplicable.
EX-99.4 Agreement and Plan of Reorganization and Liquidation filed
as Exhibit A to Part A incorporated herein by reference to
Registrant's Pre-Effective Amendment No. 1 to Form N-14
filed electronically on January 30, 1998, accession number
0000922423-98-000087.
EX-99.5 Inapplicable.
EX-99.6(a) Investment Advisory Agreement dated as of March 1, 1997,
between the Registrant and Key Asset Management Inc. is
incorporated herein by reference to Exhibit 99.B(5)(a) to
Post-Effective Amendment No. 34 to the Registrant's
Registration Statement on Form N-1A filed electronically on
December 12, 1997, accession number 0000922423-97-001015.
EX-99.7(a) Distribution Agreement dated June 1, 1996 between the
Registrant and BISYS Fund Services Limited Partnership is
incorporated herein by reference to Exhibit 99.B6(a) to
Post-Effective Amendment No. 30 to the Registrant's
Registration Statement on Form N-1A filed electronically on
July 30, 1996, accession number 0000922423-96-000344.
EX-99.7(b) Form of Broker-Dealer Agreement is incorporated herein by
reference to Exhibit 99.B6(b) to Post-Effective Amendment
No. 27 to the Registrant's Registration Statement on Form
N-1A filed electronically on January 31, 1996, accession
number 0000922423-96-000047.
EX-99.8 Inapplicable.
EX-99.9(a) Amended and Restated Mutual Fund Custody Agreement dated May
24, 1995 by and between the Registrant and Key Trust Custody
of Ohio, N.A. is incorporated herein by reference to Exhibit
8(a) to Post-Effective Amendment No. 22 to the Registrant's
Registration Statement on Form N-1A filed on August 28,
1995.
EX-99.9(b) Custody Agreement dated May 31, 1996 between Morgan Stanley
Trust Company and Key Trust Company of Ohio is incorporated
herein by reference to Exhibit 99.B8(c) to Post-Effective
Amendment No. 30 to the Registrant's Registration Statement
on Form N-1A filed electronically on July 30, 1996,
accession number 0000922423-96-000344.
<PAGE>
EX-99.10(a) Inapplicable.
EX-99.10(b) Custody Agreement dated May 31, 1996 between Morgan Stanley
Trust Company and Key Trust Company of Ohio is incorporated
herein by reference to Exhibit 99.B8(c) to Post-Effective
Amendment No. 30 to the Registrant's Registration Statement
on Form N-1A filed electronically on July 30, 1996,
accession number 0000922423-96-000344.
EX-99.B10(c) Amended and Restated Rule 18f-3 Multi-Class Plan effective
as of February 14, 1996 is incorporated herein by reference
to Exhibit 99.B18(c) to Post-Effective Amendment No. 28 to
the Registrant's Registration Statement on Form N-1A filed
electronically on February 28, 1996, accession number
0000922423-96-000106.
EX-99.11(a) Form of Opinion of Kramer, Levin, Naftalis & Frankel
as to the legality of the securities being issued.
EX-99.11(b) Opinion of Morris, Nichols, Arscht & Tunnell as to the
legality of the securities being issued.
EX-99.11(c) Opinion of Morrison & Foerster is to be filed by amendment.
EX-99.11(d) Opinion of Ballard Spahr Ingersoll & Andrews is to be filed
by amendment.
EX-99.12 Form of Opinion of Kramer, Levin, Naftalis & Frankel
as to tax consequences.
EX-99.13 Inapplicable.
EX-99.14(a) Consents of Coopers & Lybrand L.L.P.
EX-99.14(b) Consent of Price Waterhouse.
EX-99.14(c) Consent of Kramer, Levin, Naftalis & Frankel.
EX-99.15 Inapplicable.
EX-99.16(a) Power of Attorney of Leigh A. Wilson is incorporated
herein by reference to Exhibit 99.B P of A to
Post-Effective Amendment No. 27 to Registrant's
Registration Statement on Form N-1A and Powers of
Attorney of Robert G. Brown, Edward P. Campbell, Harry
Gazelle, Stanley I. Landgraf, Thomas F. Morrissey and H.
Patrick Swygert are incorporated herein by reference to
Exhibit 99.B P of A to Post-Effective Amendment No. 26
to the Registrant's Registration Statement on Form N-1A
filed electronically on January 31, 1996, accession
number 0000922423-96-000047 and December 28, 1995,
accession number 0000950152-95-003085, respectively.
EX-99.16(b) Powers of Attorney of Roger Noall, Eugene J. McDonald, and
Frank A. Weil.
EX-99.17(a) Form of Proxy Card.
EX-99.17(b) Registrant's Registration Statement Part A and Part B
relating to the Victory Stock Index Fund, Victory Special
Growth Fund, and Victory Diversified Stock Fund is
incorporated herein by reference to Post-Effective Amendment
No. 31 to the
<PAGE>
Registrant's Registration Statement on Form N-1A as filed
electronically on February 7, 1997, accession number
0000922423-97-000066, as supplemented by Post-Effective
Amendment No. 32 to the Registrant's Registration Statement
on Form N-1A as filed electronically on June 27, 1997,
accession number 0000922423-97-000530, as supplemented on
August 29, 1997, accession number 0000922423-97-000710, and
as supplemented on December 1, 1997, accession number
0000922423-97-000986.
EX-99.17(c) Registration Statement of the SBSF Funds, Inc. (d/b/a Key
Mutual Funds) Part A and Part B, including audited financial
statements as of November 30, 1996 are incorporated herein
by reference to Post-Effective Amendment No. 30 to Key
Mutual Fund's Registration Statement on Form N-1A as filed
electronically on March 28, 1997, accession number
0000950152-97-002413, as supplemented on August 29, 1997,
accession number 0000925421-97-000046, and on October 1,
1997 accession number 0000925421-97-000054.
EX-99.17(d) Audited annual reports of Key Mutual Funds relating to
the Key Stock Index Fund, accession number
00000906197-98-000011, Key Money Market Mutual Fund,
accession number 0000906197-98-000010, KeyChoice Growth
Fund, KeyChoice Income and Growth Fund, and KeyChoice
Moderate Growth Fund, accession number
0000906197-98-000012, SBSF Fund, SBSF Convertible
Securities Fund, and SBSF Capital Growth Fund, accession
number 0000906197- 98-000013, as of November 30, 1997
are incorporated herein by reference to Key Mutual
Funds' Form N-30D filings as filed electronically on
January 28, 1998.
EX-99.17(e) Audited annual report of The Victory Portfolios relating
to all of the portfolios as of October 31, 1997 is
incorporated herein by reference to The Victory
Portfolios' Form N-30D as filed electronically on
December 24, 1997, accession number
0000906197-97-000068.
EX-99.17(f) Unaudited semi-annual report of Key Mutual Funds relating to
the SBSF Fund and SBSF Capital Growth Fund as of May 31,
1997 is incorporated herein by reference to Key Mutual
Funds' Form N-30D as filed electronically on July 31, 1997,
accession number 0000906197-97-000047.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a
part of this Registration Statement by any person or party who is deemed
to be an underwriter within the meaning of Rule 145(c) of the Securities
Act [17 CFR 230.145c], the reoffering prospectus will contain the
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
(3) The undersigned Registrant agrees to file by post-effective amendment
an opinion of counsel supporting the tax consequences of the proposed
reorganization and the opinion concerning the legality of shares
issued, within a reasonable time after receipt of such opinions.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Pre-Effective Amendment to the Registration Statement on Form
N-14 to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of New York and State of New York, the 2nd day of February, 1998.
THE VICTORY PORTFOLIOS
(Registrant)
By: /s/Leigh A. Wilson
--------------------
Leigh A. Wilson
President and Trustee
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement on Form N-14 has been signed by the following persons in the
capacities indicated on the 2nd day of February, 1998.
/s/Roger Noall Chairman of the Board and Trustee
- ------------------------
Roger Noall
/s/Leigh A. Wilson President and Trustee
- ------------------------
Leigh A. Wilson
/s/Thomas E. Line Treasurer
- ------------------------
Thomas E. Line
* Trusteee
- ------------------------
Robert G. Brown
* Trustee
- ------------------------
Edward P. Campbell
* Trustee
- ------------------------
Harry Gazelle
* Trustee
- ------------------------
Thomas F. Morrisey
* Trustee
- ------------------------
H. Patrick Swygert
* Trustee
- ------------------------
Frank A. Weil
* Trustee
- ------------------------
Eugene J. McDonald
*By: /s/ Carl Frischling
- ------------------------
Carl Frischling
Attorney-in-Fact
* Attorney-in-fact pursuant to powers of attorney filed herewith and with
Post-Effective Amendments 27 and 26 to Registrant's Registration Statement
on January 31, 1996 and December 28, 1995, respectively.
Kramer, Levin, Naftalis & Frankel
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
Arthur H. Aufses III Monica C. Lord Sherwin Kamin
Thomas D. Balliett Richard Marlin Arthur B. Kramer
Jay G. Baris Thomas Moers Mayer Maurice N. Nessen
Philip Bentley Thomas E. Molner Founding Partners
Saul E. Burian Thomas H. Moreland Counsel
Barry Michael Cass Ellen R. Nadler _____
Thomas E. Constance Gary P. Naftalis
Michael J. Dell Michael J. Nassau Martin Balsam
Kenneth H. Eckstein Michael S. Nelson Joshua M. Berman
Charlotte M. Fischman Jay A. Neveloff Jules Buchwald
David S. Frankel Michael S. Oberman Rudolph de Winter
Marvin E. Frankel Paul S. Pearlman Meyer Eisenberg
Alan R. Friedman Susan J. Penry-Williams Arthur D. Emil
Carl Frischling Bruce Rabb Maria T. Jones
Mark J. Headley Allan E. Reznick Maxwell M. Rabb
Robert M. Heller Scott S. Rosenblum James Schreiber
Philip S. Kaufman Michele D. Ross Counsel
Peter S. Kolevzon Howard J. Rothman _____
Kenneth P. Kopelman Max J. Schwartz
Michael Paul Korotkin Mark B. Segall M. Frances Buchinsky
Shari K. Krouner Judith Singer Abbe L. Dienstag
Kevin B. Leblang Howard A. Sobel Ronald S. Greenberg
David P. Levin Jeffrey S. Trachtman Debora K. Grobman
Ezra G. Levin Jonathan M. Wagner Christian S. Herzeca
Randy Lipsitz Harold P. Weinberger Jane Lee
Larry M. Loeb E. Lisk Wyckoff, Jr. Pinchas Mendelson
Lynn R. Saidenberg
Special Counsel
-----
FAX
(212) 715-8000
---
WRITER'S DIRECT NUMBER
(212)715-9100
-------------
[FORM OF]
__________, 1998
The Key Mutual Funds
3435 Stelzer Road
Columbus, Ohio 43219-3035
Dear Ladies and Gentlemen:
Reference is made to the Registration Statement on Form N-14,
Registration No. 333-42837, under the Securities Act of 1933, as amended (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "Commission") on December 19, 1997, registering shares of beneficial
interest, no par value, (the "Shares") of The Victory Portfolios (the "Trust"),
a Delaware business trust. The Shares are to be issued in connection with an
Agreement and Plan of Reorganization and Liquidation (the "Plan") whereby all of
the then-existing assets of the Key Mutual Funds, a Maryland corporation (the
"Company"), for itself and on behalf of each of its existing investment
portfolios, Key Stock Index Fund, SBSF Capital Growth Fund, SBSF Fund, KeyChoice
Growth Fund, KeyChoice Income and Growth Fund, KeyChoice Moderate Growth Fund,
Key Money Market Mutual Fund, and SBSF Convertible Securities Fund (each an
"Acquired Portfolio," and collectively the "Acquired Portfolios"), will be
transferred to a corresponding series of the Trust, Victory Stock Index
Fund-Class A, Victory Special Growth Fund-Class A, Victory Diversified Stock
Fund-Class A, Victory LifeChoice Growth Investor Fund-Class A, Victory
LifeChoice Conservative Investor Fund-Class A, Victory LifeChoice Moderate
Investor Fund-Class A, Victory Federal Money Market Fund-Investor Class, and
Victory Convertible Securities Fund-Class A (each an "Acquiring Portfolio," and
collectively the "Acquiring Portfolios"), in exchange for (i) the assumption of
all the obligations and stated liabilities of the Acquired
<PAGE>
The Key Mutual Funds
__________, 1998
Page 2
Portfolios and (ii) the issuance and delivery to each Acquired Portfolio of full
and fractional shares of the Acquiring Portfolio's Shares (as described in the
Plan); such Shares will be distributed by the Acquired Portfolio pro rata to its
shareholders upon its liquidation. The Plan was approved by the Board of
Directors of the Company on December 2, 1997, and by the Board of Trustees of
the Trust on December 3, 1997, and must be approved by the shareholders of the
Acquired Portfolios at a special meeting of shareholders called for that
purpose.
We have reviewed the Declaration of Trust of the Trust, its
By-Laws, resolutions of the Trustees of the Trust, and the Registration
Statement (including exhibits thereto). We have also made such inquiries and
have examined originals, certified copies or copies otherwise identified to our
satisfaction of such documents, records and other instruments as we have deemed
necessary or appropriate for the purposes of this opinion. For purposes of such
examination, we have assumed the genuineness of all signatures on original
documents and the conformity to the original documents of all copies submitted.
In addition, we have assumed that the representations to be made as of the
closing date by the Trust will be made by such parties in form acceptable to us
and that the Trust's activities in connection with the Plan and the transactions
contemplated therein have been and will be conducted in the manner provided in
such documents and as set forth herein.
The opinions expressed herein are limited to matters of law
which govern the due organization of the Trust and the authorization and
issuance of the Shares. We are members of the Bar of the State of New York and
do not hold ourselves out as experts as to the law of any other state or
jurisdiction. As to matters of Delaware law, we have relied upon the opinion of
Morris, Nichols, Arsht & Tunnell. Based upon and subject to the foregoing and
provided that the terms of reorganization occur in accordance with the terms of
the Plan, we are of the opinion that, and so advise you as follows:
(1) The Trust is a business trust validly existing under the
laws of the State of Delaware and is duly registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and each Acquiring Portfolio is a validly existing series of shares
of the Trust representing interests in the Acquiring Portfolio under the laws of
the State of Delaware;
(2) The execution, delivery and performance of the Plan will
not result in a violation of the Trust's Declaration of Trust or By-Laws, each
as amended to date;
(3) The execution, delivery and performance of the Plan has
been duly authorized by all necessary action on the part of the Trust and each
Acquiring Portfolio, and the Plan has been duly executed and delivered by the
Trust and is a valid and binding
<PAGE>
The Key Mutual Funds
__________, 1998
Page 3
obligation of the Trust and each Acquiring Portfolio, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights or remedies
and to general equity principles (regardless of whether considered at a
proceeding in law or equity), equitable defenses or waivers and the discretion
of the court before which any proceeding for specific performance, injunctive
and other forms of equitable relief may be brought; and
(4) The Acquiring Portfolio Shares to be issued and delivered
pursuant to the terms of the Plan will have been duly authorized as of the
closing date of the Reorganization and Liquidation, and, when so issued and
delivered, will be validly issued, fully paid and non-assessable (except as
disclosed in the Acquiring Portfolio's then current Prospectus and Statement of
Additional Information).
This opinion is solely for your information and is not to be
quoted in whole or in part, summarized or otherwise referred to, nor is it to be
filed with or supplied to or relied upon by any governmental agency or other
person without the prior written consent of this firm. This opinion is as of the
date hereof. We disclaim any responsibility to update or supplement this opinion
to reflect any events or state of facts which may hereafter come to our
attention, or any changes in statutes or regulations or any court decisions
which may hereafter occur.
Very truly yours,
------------------------------------
[LETTERHEAD OF MORRIS, NICHOLS, ARSHT & TUNNELL]
January 22, 1998
The Victory Portfolios
3435 Stelzer Road
Columbus, Ohio 43219-3035
Re: The Victory Portfolios
----------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to The Victory
Portfolios, a Delaware business trust (the "Trust"), in connection with certain
matters relating to the creation of the Trust and the issuance of Shares by the
Trust. Capitalized terms used herein and not otherwise herein defined are used
as defined in the Trust Instrument of the Trust dated December 6, 1995 (the
"Governing Instrument").
We understand that, pursuant to an Agreement and Plan of
Reorganization and Liquidation (the "Plan") to be entered into among SBSF Funds,
Inc. for itself and on behalf of each of its existing investment portfolios
identified by Schedule A thereto (each individually an "Acquired Portfolio" and
collectively, the "Acquired Portfolios") and the Trust for itself and on behalf
of each of its existing investment portfolios set forth on Schedule A thereto
(each individually an "Acquiring Fund" and collectively the "Acquiring Funds"),
and subject to the conditions set forth therein, Shares of each of the Acquiring
Funds will be distributed to the Shareholders of each corresponding Acquired
Portfolio in connection with the liquidation and termination of each of the
Acquired Portfolios.
In rendering this opinion, we have examined copies of the
following documents, each in the form provided to us: the Certificate of Trust
of the Trust as filed in the Office of the
<PAGE>
The Victory Portfolios
January 22, 1998
Page 2
Secretary of State of the State of Delaware (the "Recording Office") on December
21, 1995 (the "Certificate"); the Governing Instrument; the Bylaws of the Trust;
certain resolutions of the Trustees of the Trust; the Plan; Post-Effective
Amendment No. 26 to the Registration Statement on Form N-1A of The Victory
Portfolios, a Massachusetts business trust and the predecessor to the Trust (the
"Predecessor Trust") by which the Trust adopted such Registration Statement and
the Predecessor Trust's Notification of Registration and Registration Statement
under the Investment Company Act of 1940, as filed with the Securities and
Exchange Commission on December 28, 1995; the Trust's Registration Statement on
Form N-14 as filed with the Securities and Exchange Commission on December 19,
1997 (the "Registration Statement"); and a certification of good standing of the
Trust obtained as of a recent date from the Recording Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents submitted to us as copies or drafts of
documents to be executed, and the legal capacity of natural persons to complete
the execution of documents. We have further assumed for the purpose of this
opinion: (i) the due authorization, execution and delivery by, or on behalf of,
each of the parties thereto of the above-referenced instruments, certificates
and other documents, including, without limitation, the Plan, and of all
documents contemplated by the Governing Instrument and applicable resolutions of
the Trustees to be executed by investors desiring to become Shareholders; (ii)
the transfer of the assets of each Acquired Portfolios to the corresponding
Acquiring Fund, the satisfaction of all conditions precedent to the issuance of
Shares pursuant to the Plan and compliance with all other terms, conditions and
restrictions set forth in the Plan and the Governing Instrument and all
applicable resolutions of the Trustees in connection with the issuance of Shares
(including, without limitation, the taking of all appropriate action by the
Trustees to designate Series of Shares, including the Acquiring Funds, and the
rights and preferences attributable thereto as contemplated by the Governing
Instrument); (iii) that appropriate notation of the names and addresses of, the
number of Shares held by, and the consideration paid by, Shareholders will be
maintained in the appropriate registers and other books and records of the Trust
in connection with the issuance or transfer of Shares; (iv) that, subsequent to
the filing of the Certificate, no event has occurred, or prior to the issuance
of Shares pursuant to the Plan will occur, that would cause a termination or
dissolution of the Trust under Sections 11.04 or 11.05 of the Governing
Instrument; (v) that the activities of the
<PAGE>
The Victory Portfolios
January 22, 1998
Page 3
Trust have been and will be conducted in accordance with the terms of the
Governing Instrument and the Delaware Act; and (vi) that each of the documents
examined by us is in full force and effect and has not been amended,
supplemented or otherwise modified, except as herein referenced. No opinion is
expressed herein with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. Further, we express no opinion on
the sufficiency or accuracy of the Registration Statement, or any other
registration or offering documentation relating to the Trust or the Shares. As
to any facts material to our opinion, other than those assumed, we have relied
without independent investigation on the above-referenced documents and on the
accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that:
1. The Trust is a duly created and validly existing business
trust in good standing under the laws of the State of Delaware.
2. The Shares to be issued pursuant to the Plan will, upon
issuance, constitute legally issued, fully paid and non-assessable Shares of
beneficial interest in the Trust.
3. Under the Delaware Act and the terms of the Governing
Instrument, each Shareholder of the Trust, in such capacity, will be entitled to
the same limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the general corporation law of
the State of Delaware; provided, however, that we express no opinion with
respect to the liability of any Shareholder who is, was or may become a named
Trustee of the Trust.
We consent to the filing of a copy of this opinion with the
Securities and Exchange Commission as an exhibit to a pre-effective amendment to
the Registration Statement. In giving this consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as provided in this
paragraph, the opinion set forth above is expressed solely for the benefit of
the addressee hereof in connection with the matters contemplated hereby and may
not be
<PAGE>
The Victory Portfolios
January 22, 1998
Page 4
relied upon by, or filed with, any other person or entity or for any other
purpose without our prior written consent.
Sincerely,
/s/MORRIS, NICHOLS, ARSHT & TUNNELL
Kramer, Levin, Naftalis & Frankel
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
Arthur H. Aufses III Monica C. Lord Sherwin Kamin
Thomas D. Balliett Richard Marlin Arthur B. Kramer
Jay G. Baris Thomas Moers Mayer Maurice N. Nessen
Philip Bentley Thomas E. Molner Founding Partners
Saul E. Burian Thomas H. Moreland Counsel
Barry Michael Cass Ellen R. Nadler _____
Thomas E. Constance Gary P. Naftalis
Michael J. Dell Michael J. Nassau Martin Balsam
Kenneth H. Eckstein Michael S. Nelson Joshua M. Berman
Charlotte M. Fischman Jay A. Neveloff Jules Buchwald
David S. Frankel Michael S. Oberman Rudolph de Winter
Marvin E. Frankel Paul S. Pearlman Meyer Eisenberg
Alan R. Friedman Susan J. Penry-Williams Arthur D. Emil
Carl Frischling Bruce Rabb Maria T. Jones
Mark J. Headley Allan E. Reznick Maxwell M. Rabb
Robert M. Heller Scott S. Rosenblum James Schreiber
Philip S. Kaufman Michele D. Ross Counsel
Peter S. Kolevzon Howard J. Rothman _____
Kenneth P. Kopelman Max J. Schwartz
Michael Paul Korotkin Mark B. Segall M. Frances Buchinsky
Shari K. Krouner Judith Singer Abbe L. Dienstag
Kevin B. Leblang Howard A. Sobel Ronald S. Greenberg
David P. Levin Jeffrey S. Trachtman Debora K. Grobman
Ezra G. Levin Jonathan M. Wagner Christian S. Herzeca
Randy Lipsitz Harold P. Weinberger Jane Lee
Larry M. Loeb E. Lisk Wyckoff, Jr. Pinchas Mendelson
Lynn R. Saidenberg
Special Counsel
-----
FAX
(212) 715-8000
---
WRITER'S DIRECT NUMBER
(212)715-9100
-------------
[FORM OF]
March __, 1998
Key Mutual Funds
3435 Stelzer Road
Columbus, Ohio 43219
and
The Victory Portfolios
3435 Stelzer Road
Columbus, Ohio 43219
Ladies and Gentlemen:
This opinion is being furnished to you in connection with the
reorganization (the "Reorganization") of each series of SBSF Funds, Inc., doing
business as Key Mutual Funds, a Maryland corporation ("Key," and each such
series, a "Transferor"), into a corresponding series of The Victory Portfolios,
a Delaware business trust ("Victory," and each such series, a "Transferee"),
pursuant to the Agreement and Plan of Reorganization and Liquidation (the
"Reorganization Plan") dated as of _____, 1998, by and among Key, for itself and
on behalf of each Transferor, and Victory, for itself and on behalf of each
Transferee.
In the Reorganization, each Transferor will transfer
substantially all of its assets to a corresponding Transferee in exchange for
stock of such Transferee and the
<PAGE>
KRAMER, LEVIN, NAFTALIS & FRANKEL
Key Mutual Funds
and
The Victory Portfolios
March __, 1998
Page 2
assumption by such Transferee of the liabilities of Transferor.1 Each Transferor
will distribute the stock of the Transferee received in the Reorganization pro
rata to its shareholders in exchange for their Transferor stock in complete
liquidation of Transferor. Certain Transferors are reorganizing into new
Transferees created to carry on the operations of the corresponding Transferor
(each such Transferee, a "New Transferee"), as follows:
(1) KeyChoice Growth Fund into Victory LifeChoice Growth Investor Fund;
(2) KeyChoice Income and Growth Fund into Victory LifeChoice Conservative
Investor Fund;
(3) KeyChoice Moderate Growth Fund into Victory LifeChoice Moderate
Investor Fund;
(4) Key Money Market Mutual Fund into Victory Federal Money Market Fund;
and
(5) SBSF Convertible Securities Fund into Victory Convertible Securities
Fund.
Each of the other Transferors is reorganizing into an existing
Transferee (each such Transferee, an "Existing Transferee"), as follows:
(1) SBSF Fund into Victory Diversified Stock Fund;
(2) SBSF Capital Growth Fund into Victory Special Growth Fund; and
(3) Key Stock Index Fund into Victory Stock Index Fund.
All capitalized terms used in this opinion and not defined
herein have the respective meanings assigned to them in the Reorganization Plan
and the Combined Prospectus/Proxy Statement included in the registration
statement on Form N-14, as amended, filed by Victory with The Securities and
Exchange Commission on December 19, 1997 (the "Proxy Statement").
For purposes of the opinion set forth below, we have reviewed
and relied upon (i) the Reorganization Plan, (ii) the Proxy Statement, and (iii)
such other documents, records, and instruments as we have deemed necessary or
appropriate as a basis for our opinion. In
- --------
1 Pursuant to section 851(g)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), each Transferor and each Transferee is treated as a
separate corporation. Under Delaware law, ownership interests in a
Transferee constitute shares of beneficial interest. Such interests are
considered stock for federal income tax purposes and are referred to as
"stock" or "shares" in this letter.
<PAGE>
KRAMER, LEVIN, NAFTALIS & FRANKEL
Key Mutual Funds
and
The Victory Portfolios
March __, 1998
Page 3
addition, in rendering our opinion we have relied upon certain statements and
representations, which we have neither investigated nor verified, made by Key,
Victory, and Key Asset Management, Inc., the investment adviser to each of the
Transferees and Transferors (the "Certified Representations"), including, inter
alia, that with respect to each Transferor and its corresponding Transferee:
(i) there is no plan or intention by the holders of shares of Transferor
to sell, exchange, or otherwise dispose of a number of shares of
Transferee stock received in the Reorganization that would reduce the
Transferor shareholders' ownership of Transferee stock to a number of
shares having a value, as of the date of the Reorganization, of less
than 50 percent of the value of all of the formerly outstanding stock
of Transferor as of the same date,
(ii) the fair market value of Transferee stock received by each shareholder
of Transferor will be approximately equal to the fair market value of
the Transferor stock surrendered in the Reorganization,
(iii)each of Transferor and Transferee is qualified as a regulated
investment company, as defined in section 851 of the Code; and
(iv) Transferee will acquire at least 90 percent of the fair market value
of the net assets and at least 70 percent of the fair market value of
the gross assets held by Transferor immediately prior to the
Reorganization, calculated in accordance with the relevant provisions
of Rev. Proc. 77-37, 1977-2 C.B. 568, as amended.
We have also obtained such additional information and
representations as we have deemed relevant and necessary through consultation
with the officers and directors of Key and Victory, as well as with other
professionals engaged by them. We have assumed, with your consent, that all
documents reviewed by us are originals or photocopies that faithfully reproduce
the originals thereof, that all such documents have been or will be duly
executed to the extent required, that all representations and statements set
forth in such documents are true, correct, complete, and not breached, that no
actions that are inconsistent with such representations and statements will be
taken, and that all obligations imposed by any such documents on the parties
thereto have been or will be performed or satisfied in accordance with their
terms. We have further assumed that all representations made in the
<PAGE>
KRAMER, LEVIN, NAFTALIS & FRANKEL
Key Mutual Funds
and
The Victory Portfolios
March __, 1998
Page 4
Certified Representations "to the best knowledge of" any person will be true,
correct, and complete as if made without such qualification.
Based upon the foregoing, and subject to the qualifications
set forth below, it is our opinion that, with respect to each Transferor and its
corresponding Transferee, for federal income tax purposes:
(i) the transfer by Transferor of substantially all of its assets to
Transferee in exchange for shares of Transferee and the assumption by
Transferee of the liabilities of Transferor, and the subsequent
liquidation of Transferor, pursuant to the Plan, will constitute a
reorganization within the meaning of section 368(a)(1) of the Code,
and Transferor and Transferee will each be "a party to a
reorganization" within the meaning of section 368(b) of the Code;
(ii) Transferor will not recognize any gain or loss as a result of the
Reorganization;
(iii)Transferee will not recognize any gain or loss on the receipt of the
assets of Transferor in exchange for shares of Transferee and the
assumption of the liabilities of Transferor;
(iv) the shareholders of Transferor will not recognize any gain or loss on
the exchange of their shares of Transferor for shares of Transferee in
the Reorganization;
(v) the aggregate tax basis of the shares of Transferee received by each
shareholder of Transferor will be the same as the aggregate tax basis
of the shares of Transferor exchanged therefor;
(vi) Transferee's adjusted tax bases in the assets received from Transferor
in the Reorganization will be the same as the adjusted tax bases of
such assets in the hands of Transferor immediately prior to the
Reorganization;
(vii)the holding period of each former shareholder of Transferor in the
shares of Transferee received in the Reorganization will include the
period during which such shareholder held the Transferor shares
exchanged therefor, if such shares were held as a capital asset at the
time of the Reorganization; and
<PAGE>
KRAMER, LEVIN, NAFTALIS & FRANKEL
Key Mutual Funds
and
The Victory Portfolios
March __, 1998
Page 5
(viii) Transferee's holding periods in the assets received from Transferor
in the Reorganization will include the holding periods of such assets
in the hands of Transferor immediately prior to the Reorganization.
Our opinion, which is not binding on the Internal Revenue
Service or the courts, is based upon existing statutory, regulatory, and
administrative and judicial authority, any of which may be changed at any time
with retroactive effect to the detriment of Transferee, Transferor, and/or their
shareholders. We do not undertake to advise you as to any changes after the date
of this opinion in the above-referenced authorities that may affect our opinion
unless we are specifically requested to do so. As noted above, our opinion is
based solely on the documents that we have examined, the assumptions we have
made, the additional information that we have obtained, and the representations
that have been made to us. Our opinion cannot be relied upon if any of the facts
contained in such documents, such additional information, or any of our
assumptions or the representations made to us is, or later becomes, inaccurate.
Finally, our opinion is limited to the tax matters specifically stated above,
and we have not been asked to address, nor have we addressed, any other matters
relating to the Reorganization, Transferees, Transferors, or any investment in
or by Transferees or Transferors.
This opinion is intended for the exclusive use of Key and
Victory. This opinion may not be circulated or relied upon by any other person
or entity or for any other purpose without our prior consent. We hereby
authorize you to attach this opinion as an exhibit to the Registration Statement
on Form N-14.
Very truly yours,
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Pre-Effective Amendment No.
2 to the Registration Statement of The Victory Portfolios on Form N-14 (File No.
333-42837) of our report dated December 15, 1997 on our audits of the financial
statements and financial highlights of The Victory Portfolios (comprising,
respectively, the Institutional Money Market Fund, U.S. Government Obligations
Fund, Prime Obligations Fund, Financial Reserves Fund, Tax-Free Money Market
Fund, Ohio Municipal Money Market Fund, Limited Term Income Fund, Intermediate
Income Fund, Investment Quality Bond Fund, Government Mortgage Fund, Fund for
Income, National Municipal Bond Fund, New York Tax-Free Fund, Ohio Municipal
Bond Fund, Balanced Fund, Stock Index Fund, Diversified Stock Fund, Value Fund,
Growth Fund, Special Value Fund, Special Growth Fund, Ohio Regional Stock Fund,
International Growth Fund, Lakefront Fund, and Real Estate Investment Fund)
which report is included in the Annual Report to Shareholders for the year ended
October 31, 1997 which is incorporated by reference in the Registration
Statement. We also consent to the reference to our Firm under the caption
"Financial Statements" in this Registration Statement on Form N-14 (File No.
333-42837).
/s/COOPERS & LYBRAND L.L.P.
Columbus, Ohio
February 2, 1998
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Pre-Effective Amendment No.
2 to the Registration Statement of The Victory Portfolios on Form N-14 (File No.
333-42837) of our report dated January 16, 1998 on our audits of the financial
statements and financial highlights of Key Mutual Funds (SBSF Funds, Inc.)
(comprising, respectively, the Key Money Market Mutual Fund, Key Stock Index
Fund, KeyChoice Income & Growth Fund, KeyChoice Moderate Growth Fund, KeyChoice
Growth Fund, SBSF Fund, SBSF Convertible Securities Fund, and SBSF Capital
Growth Fund) which report is included in the Annual Report to Shareholders for
the year ended November 30, 1997 which is incorporated by reference in the
Registration Statement. We also consent to the reference to our Firm under the
caption "Financial Statements" in this Registration Statement on Form N-14 (File
No. 333-42837).
/s/COOPERS & LYBRAND L.L.P.
Columbus, Ohio
February 2, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statements of
Additional Information dated April 1, 1997 of our reports dated January 15,
1997, relating to the financial statements and financial highlights appearing in
the November 30, 1996 Annual Report to Shareholders of Key Money Market Mutual
Fund, Key Stock Index Fund, SBSF Capital Growth Fund, SBSF Convertible
Securities Fund and SBSF Fund, five of the portfolios comprising Key Mutual
Funds, which Statements of Information are incorporated by reference in the
Combined Prospectus/Proxy Statement constituting part of this Pre-Effective
Amendment No. 2 to the registration statement on Form N-14 (the "Registration
Statement"). We also consent to the reference to us under the heading "Financial
Information Summary" in the Prospectus dated April 1, 1997 for Key Money Market
Mutual Fund, Key Stock Index Fund, SBSF Capital Growth Fund, SBSF Convertible
Securities Fund, and SBSF Fund, which Prospectuses are incorporated by reference
into the Registration Statement. We also consent to the reference to us under
the heading "Independent Accountants and Reports" in the Statements of
Additional Information dated April 1, 1997 for Key Money Market Mutual Fund, Key
Stock Index Fund, SBSF Capital Growth Fund, SBSF Convertible Securities Fund,
and SBSF Fund.
Price Waterhouse LLP
New York, New York
January 27, 1998
Kramer, Levin, Naftalis & Frankel
919 THIRD AVENUE
NEW YORK, N.Y. 10022-3852
(212) 715-9100
Arthur H. Aufses III Monica C. Lord Sherwin Kamin
Thomas D. Balliett Richard Marlin Arthur B. Kramer
Jay G. Baris Thomas Moers Mayer Maurice N. Nessen
Philip Bentley Thomas E. Molner Founding Partners
Saul E. Burian Thomas H. Moreland Counsel
Barry Michael Cass Ellen R. Nadler _____
Thomas E. Constance Gary P. Naftalis
Michael J. Dell Michael J. Nassau Martin Balsam
Kenneth H. Eckstein Michael S. Nelson Joshua M. Berman
Charlotte M. Fischman Jay A. Neveloff Jules Buchwald
David S. Frankel Michael S. Oberman Rudolph de Winter
Marvin E. Frankel Paul S. Pearlman Meyer Eisenberg
Alan R. Friedman Susan J. Penry-Williams Arthur D. Emil
Carl Frischling Bruce Rabb Maria T. Jones
Mark J. Headley Allan E. Reznick Maxwell M. Rabb
Robert M. Heller Scott S. Rosenblum James Schreiber
Philip S. Kaufman Michele D. Ross Counsel
Peter S. Kolevzon Howard J. Rothman _____
Kenneth P. Kopelman Max J. Schwartz
Michael Paul Korotkin Mark B. Segall M. Frances Buchinsky
Shari K. Krouner Judith Singer Abbe L. Dienstag
Kevin B. Leblang Howard A. Sobel Ronald S. Greenberg
David P. Levin Jeffrey S. Trachtman Debora K. Grobman
Ezra G. Levin Jonathan M. Wagner Christian S. Herzeca
Randy Lipsitz Harold P. Weinberger Jane Lee
Larry M. Loeb E. Lisk Wyckoff, Jr. Pinchas Mendelson
Lynn R. Saidenberg
Special Counsel
-----
FAX
(212) 715-8000
---
WRITER'S DIRECT NUMBER
(212)715-9100
-------------
February 2, 1998
The Victory Portfolios
3435 Stelzer Road
Columbus, Ohio 43219
Re: The Victory Portfolios
File No. 333-42837
Pre-Effective Amendment No.2
to Registration Statement on Form N-14
--------------------------------------
Dear Gentlemen:
We hereby consent to the reference of our firm as counsel in
Pre-Effective Amendment No. 2 to the Registration Statement on Form N-14.
Very truly yours,
/s/ Kramer, Levin, Naftalis & Frankel
-------------------------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of THE
VICTORY PORTFOLIOS, a Delaware business trust, (the "Trust") constitutes and
appoints Carl Frischling and Jay G. Baris my true and lawful attorneys-in-fact,
with full power of substitution and resubstitution, for me and in my name, place
and stead, in any and all capacities as a trustee of the Trust, to sign for me
and in my name in the appropriate capacity, any and all Pre-Effective Amendments
to any Registration Statement of the Trust, any and all Post-Effective
Amendments to said Registration Statements, any Registration Statements on Form
N-14, and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection therewith as
said attorneys-in-fact deem necessary or appropriate, and that have been
approved by the Board of Trustees of the Trust or by the appropriate officers of
the Trust, acting in good faith and in a manner they reasonably believe to be in
the best interests of the Trust, upon the advice of counsel, such approval to be
conclusively evidenced by their execution thereof, to comply with the provisions
of the Securities Act of 1933, as amended, and the Investment Company Act of
1940, as amended, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
Witness my hand on this 2nd day of January, 1998.
/s/ Roger Noall
---------------
Roger Noall
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of THE
VICTORY PORTFOLIOS, a Delaware business trust, (the "Trust") constitutes and
appoints Carl Frischling and Jay G. Baris my true and lawful attorneys-in-fact,
with full power of substitution and resubstitution, for me and in my name, place
and stead, in any and all capacities as a trustee of the Trust, to sign for me
and in my name in the appropriate capacity, any and all Pre-Effective Amendments
to any Registration Statement of the Trust, any and all Post-Effective
Amendments to said Registration Statements, any Registration Statements on Form
N-14, and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection therewith as
said attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933, as amended, and the Investment Company
Act of 1940, as amended, and all related requirements of the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorneys-in-fact or their substitutes may do or cause to be done by virtue
hereof.
Witness my hand on this 2nd day of January, 1998.
/s/ Eugene J. McDonald
----------------------
Eugene J. McDonald
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of THE
VICTORY PORTFOLIOS, a Delaware business trust, (the "Trust") constitutes and
appoints Carl Frischling, Jay G. Baris and George O. Martinez my true and lawful
attorneys-in-fact, with full power of substitution and resubstitution, for me
and in my name, place and stead, in any and all capacities as a trustee of the
Trust, to sign for me and in my name in the appropriate capacity, any and all
Pre-Effective Amendments to any Registration Statement of the Trust, any and all
Post-Effective Amendments to said Registration Statements, any Registration
Statements on Form N-14, and any supplements or other instruments in connection
therewith, and generally to do all such things in my name and behalf in
connection therewith as said attorneys-in-fact deem necessary or appropriate,
and that have been approved by the Board of Trustees of the Trust or by the
appropriate officers of the Trust, acting in good faith and in a manner they
reasonably believe to be in the best interests of the Trust, upon the advice of
counsel, such approval to be conclusively evidenced by their execution thereof,
to comply with the provisions of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, and all related requirements of the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes may do or cause to be done by virtue
hereof.
Witness my hand on this 22nd day of January, 1998.
/s/ Frank A. Weill
----------------------
Frank A. Weill
================================================================================
IMPORTANT NOTICE: Please take a moment now to vote your shares. You may vote
directly over the telephone by calling 1-800-733-8481, Ext. 431. Representatives
are available from 9 a.m. to 11 p.m. Eastern Time. You may also fax your ballot
to 1-800-733-1885 or return it in the enclosed postage paid envelope.
Your vote is important. Thank you for your prompt action.
================================================================================
SBSF Funds, Inc. d/b/a
KEY MUTUAL FUNDS
KeyChoice Growth Fund
KeyChoice Income and Growth Fund
KeyChoice Moderate Growth Fund
Key Stock Index Fund
SBSF Capital Growth Fund
SBSF Convertible Securities Fund
SBSF Fund
Key Money Market Mutual Fund
-----------------------------------------------
SPECIAL MEETING OF SHAREHOLDERS SCHEDULED
TO BE HELD ON MARCH 6, 1998
------------------------------------------
Please refer to the Combined Prospectus/Proxy Statement for a discussion of
these matters. THE UNDERSIGNED CONSTITUTES AND APPOINTS KAREN HABER AND MARILYN
FARMER, OR EITHER OF THEM, THE ATTORNEYS AND PROXIES OF THE UNDERSIGNED WITH
FULL POWER OF SUBSTITUTION IN EACH OF THEM, TO ATTEND AND TO VOTE AS DIRECTED
ALL VOTES THE UNDERSIGNED IS ENTITLED TO CASH AT THE SPECIAL MEETING OF
SHAREHOLDERS OF SBSF FUNDS, INC., A MARYLAND CORPORATION, D/B/A KEY MUTUAL FUNDS
("Key Mutual Funds"), TO BE HELD AT 3435 STELZER ROAD, COLUMBUS, OHIO ON MARCH
6, 1998, AT 8:30 A.M. EASTERN TIME, AND AT ANY AND ALL ADJOURNMENTS THEREOF. THE
UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS AND THE ACCOMPANYING COMBINED PROSPECTUS/PROXY STATEMENT AND HEREBY
REVOKES ANY PRIOR PROXIES. To vote, mark an x in blue or black ink on the proxy
card below. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF KEY
MUTUAL FUNDS.
The attorneys and proxies are authorized and directed to vote as directed on the
matter or proposal to be voted upon when submitted for the approval of the
shareholders of any fund or series of Key Mutual Funds voting separately as a
fund or series, and when submitted for the approval of the shareholders of Key
Mutual Funds voting together as a single class. If this proxy is executed and
returned prior to the meeting, but no direction is given, the votes will be cast
"FOR" the approval of the Agreement and Plan of Reorganization and Liquidation
and each and every of the transactions contemplated thereby, and in the
discretion of the proxy holder on any other matter that may properly come before
the meeting for any adjournment thereof.
<PAGE>
1. To approve an Agreement and Plan of Reorganization and
Liquidation, as is more fully described in the accompanying Combined
Prospectus/Proxy Statement, together with each and every of the
transactions contemplated thereby.
FOR AGAINST ABSTAIN
|_| |_| |_|
2. To vote and otherwise represent the undersigned on any other
matter which may properly come before the meeting or any adjournment
thereof in the discretion of the proxy holder.
Please sign exactly as your name appears on this card. When account
is joint tenants, all should sign. When signing as executor,
administrator, trustee, or guardian, please give title. If a
corporation or partnership, sign entity's name and by authorized
person.
X___________________________________________
Signature
X___________________________________________
Signature (if jointly held)
Date:________________, 1998
