VICTORY PORTFOLIOS, DEF 14A, 2000-02-18

VICTORY PORTFOLIOS
DEF 14A, 2000-02-18

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As filed, via EDGAR, with the Securities and Exchange Commission on February 18,
2000.

File No.: 33-8982
ICA No.: 811-4852

SCHEDULE 14A (RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the registrant [X]
Filed by a party other than the registrant [ ]

Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
[X] Definitive proxy statement Commission Only
[ ] Definitive additional materials (as permitted by Rule 14a-6(e)(2))
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

THE VICTORY PORTFOLIOS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

Carl Frischling
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

|X| No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount previously paid:

(2) Form, schedule or registration statement no.:

(3) Filing party:

(4) Date filed:

<PAGE>

THE VICTORY PORTFOLIOS
3435 Stelzer Road
Columbus, Ohio 43219-3035
(800) 539-3863

February 4, 2000

Dear Shareholder:

You are invited to attend a Special Meeting of Shareholders of The
Victory Portfolios (the "Trust") to be held at the offices of The Victory
Portfolios, 3435 Stelzer Road, Columbus, Ohio 43219-3035 on March 20, 2000 at
8:30 a.m. Eastern Time.

At this Special Meeting, you are being asked to consider and approve
a series of proposals which include:

o the election of ten Trustees;
o an Amended and Restated Trust Instrument;
o an Amended and Restated Distribution Plan; and
o changes in, or the elimination of, certain fundamental investment
restrictions

We anticipate that approving these proposals will benefit all
shareholders of the investment portfolios within the Trust (the "Funds") by
installing three new Trustees, two of whom will be unaffiliated with either Key
Asset Management Inc., each Fund's investment adviser ("KAM" or the "Adviser")
or the principal underwriter of the Funds. These proposals will also benefit
shareholders by modernizing the Trust's governance (permitting the Trustees more
flexibility in managing the Funds) and making the fundamental investment
restrictions of each Fund as consistent as possible with the other Funds, thus
minimizing confusion. Finally, approval of the Amended and Restated
Distribution Plan will protect the Funds from potential difficulties that might
arise from the ambiguities in legal and regulatory provisions that govern
distribution of shares of the Funds.

The Board of Trustees has given careful consideration to the
proposals and has concluded that they are in the best interests of The Victory
Portfolios and its shareholders. We urge you to approve the proposals.

We welcome your attendance at the Special Meeting. If you are unable
to attend, please sign, date and return the enclosed proxy card promptly in
order to avoid the additional proxy solicitation expense.

Sincerely,

Robert D. Hingston
Secretary

You are not required to attend the Special Meeting;
however, be sure to exercise your right to vote by
signing, dating and returning the enclosed proxy
card promptly to avoid the additional expense of
further proxy solicitation. You may also vote by
phone, internet or fax.

<PAGE>

Important Information to Help You Understand the Proposals on Which You Are
Being Asked to Vote.

Please read the full text of this proxy
statement. Below is a brief overview of the
matters to be voted upon. Your vote is important.
If you have questions regarding the proposals
please call your Investment Consultant or the
Victory Portfolios at 1-800-539-3863. You are
also welcome to visit our web site at
www.victoryfunds.com. Select "Vote Your Proxy
Here" for information about the shareholder
meeting. We appreciate the confidence you have
placed in the Victory Portfolios and look forward
to helping you achieve your financial goals
through investment in the Victory Portfolios.

What proposals am I being asked to vote on?

You are being asked to vote on the following proposals:

1. The election of ten Trustees
2. To approve an Amended and Restated Trust Instrument
3. To approve an Amended and Restated Distribution Plan
4. To approve changes in, or the elimination of, certain
fundamental investment restrictions.

Has my Fund's Board of Trustees approved the Proposals?

Yes. The Board of the Victory Portfolios
unanimously approved these proposals on December
1, 1999, and recommends that you vote to approve
each proposal.

Why are the Victory Portfolios having a Shareholder Meeting?

Primarily, all of the shareholders in the Victory
Portfolios need to elect the Board of Trustees.
By doing so, the Trust will continue to maintain
the necessary number of Trustees that have been
elected by shareholders as required by law.

Why am I being asked to approve an Amended and Restated Trust Instrument?

To modernize the Trust's organizational documents
and create greater flexibility in managing the
affairs of the Trust. The Amended and
Restated Trust Instrument will:

o Allow the Board of Trustees to reorganize a
Fund into another Fund or investment company,
without holding a special shareholder meeting
(which can be costly), if it is in the
shareholders' best interests.

o Increase the maximum solicitation period from
60 days to 90 days when seeking shareholder
approval.

o Allow the Board of Trustees to restructure one
or more of the Funds into a master/feeder
structure if it is in the Fund's and its
shareholders' best interest to invest its
assets in another investment company.

o Permit the Board of Trustees to change
shareholder voting powers to a dollar-based
voting system to ensure that shareholders'
voting rights remain proportionate to their
investment in the Funds.

o Allow the Board of Trustees to amend the Trust
Instrument in the future without shareholder
approval unless required by law.

o Clarify that a Trustee is not an interested
person solely because of his or her
affiliation with an investment company which
is affiliated with the Trust.

o Permit the Board of Trustees to require
shareholders to redeem their shares when
accounts become too small or where certain
account information has not been made
available by the shareholders.

-i-
<PAGE>

Why am I being asked to elect Trustees?

Certain regulations require that a majority of
trustees be elected by shareholders. New trustees
cannot be appointed to fill vacancies created by
resignations or an expansion of the Board unless
after the appointments, two-thirds of the
trustees have been elected by shareholders. All
members, of the current Board of Trustees,
including three Trustees who are Advisory
Trustees of the Victory Portfolios, will stand
for election at this Special Meeting of
shareholders.

Why are certain shareholders of certain funds being asked to approve an Amended
and Restated Distribution Plan?

This Plan is designed to avoid uncertainties that
may arise from interpretation of certain legal
requirements relating to payment of distribution
expenses by Funds. The Plan does not provide for
the payment of any money by a Fund. It merely
clarifies that certain service providers to the
Funds are allowed to expend their own funds for
services which might be considered primarily
intended to result in sale of Fund shares.

Why are changes to certain investment restrictions being recommended for
these Funds, and why must the changes be submitted to shareholders?

In some cases the elimination of or a change in a
restriction is in response to changes in
regulatory requirements. Changes are also being
recommended in an effort to modernize prospectus
language or to maintain consistency across the
Funds. The proxy explains each of the proposed
changes to or the elimination of a restriction.

Shareholders are only being asked to approve the
changes that are "fundamental," and are,
therefore, required to be approved by
shareholders.

Will the proposed changes in the fundamental investment restrictions change the
investment objective of my Fund?

No. Each Fund will continue to be managed
according to its current investment objective.

When will the Shareholder Meeting be held?

A Shareholder Meeting will be held on March 20,
2000.

I have received other proxies from Victory. Is this a duplicate? Do I have to
vote again?

This is NOT a duplicate proxy. You must vote
separately for each account you have with the
Victory Funds.

How do I vote my shares?

You can vote your shares by completing and
signing the enclosed proxy card(s), and mailing
them in the enclosed postage paid envelope. You
may also vote your shares by phone at
888-634-9896, by fax at 800-733-1885, or via the
internet at www.proxyvote.com. If you need
assistance, or have any questions regarding the
proposals or how to vote your shares, please call
your Investment Consultant or the Victory
Portfolios at 1-800-539-3863.

-ii-
<PAGE>

THE VICTORY PORTFOLIOS
800-539-3863

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 20, 2000

The Victory Portfolios will host a Special Meeting of Shareholders on
March 20, 2000 at 8:30 a.m., Eastern Time. This will be a joint meeting for the
shareholders of each of the investment portfolios (the "Funds") of The Victory
Portfolios. The Special Meeting will be held at the Victory Portfolios offices,
3435 Stelzer Road, Columbus, Ohio. At the meeting, we will ask shareholders to
vote on:

1. A proposal to elect ten Trustees.

2. A proposal to amend and restate The Victory Portfolios' Trust
Instrument under Delaware law.

3. A proposed "defensive" Rule 12b-1 distribution plan. (The amount
of fees your Fund pays will not change if shareholders approve the
distribution plan.)

4. Proposed changes to certain fundamental investment restrictions.
(Your Fund's current investment objective will not change.)

5. Any other business properly brought before the meeting.

Any shareholder who owned shares of the Funds on January 21, 2000
(the "Record Date") will receive notice of the meeting and will be entitled to
vote at the meeting or any adjournment or postponement of the meeting. Please
read the full text of the Proxy Statement for a complete understanding of the
proposals.

Dated: February 4, 2000
By Order of the Board of Trustees

Robert D. Hingston, Secretary
3435 Stelzer Road
Columbus, Ohio 43219

YOUR VOTE IS IMPORTANT!
YOU CAN VOTE EASILY AND QUICKLY BY TOLL-FREE TELEPHONE CALL, THE
INTERNET, FAX OR MAIL. JUST FOLLOW THE SIMPLE INSTRUCTIONS THAT APPEAR
ON YOUR ENCLOSED PROXY CARD. PLEASE HELP YOUR FUND AVOID THE EXPENSES
OF ADDITIONAL SOLICITATIONS BY VOTING TODAY!

<PAGE>

THE VICTORY PORTFOLIOS
SPECIAL MEETING OF SHAREHOLDERS

MARCH 20, 2000

PROXY STATEMENT

INTRODUCTION
------------

This is a Proxy Statement for The Victory Portfolios (the "Trust").
The Trustees of the Trust are soliciting your proxy for a Special Meeting of
Shareholders to approve proposals that have already been approved by the
Trustees. For some proposals, shareholders of each series of the Trust (the
"Funds") will vote together. For other proposals, shareholders of each Fund (or
each class of a Fund) will vote separately. We've divided the Proxy Statement
into six parts:

Part 1-- An Overview begins on page 2
Part 2-- Your Fund's Proposals begins on page 5
Part 3-- More on Proxy Voting and Shareholder Meetings
begins on page 37
Part 4-- Fund Information begins on page 48
Part 5-- Trustee and Officer Information begins on page 49
Part 6-- A Copy of the Amended and Restated Trust
Instrument begins after page 51

You should read the entire Proxy Statement before voting. If you have
any questions, please call the Funds at 800-539-FUND (800-539-3863). Information
regarding this Special Meeting can be found by selecting "Vote Your Proxy Here"
on our web site, www.victoryfunds.com

We will begin mailing this Proxy Statement, Notice of Special Meeting
and Proxy Card to shareholders on or about February 4, 2000.

The Trust is required by federal law to file reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC"). The SEC maintains a Web site that contains information about the
Trust (www.sec.gov). Any such proxy material, reports and other information can
be inspected and copied at the public reference facilities of the SEC, 450 Fifth
Street, N.W., Washington DC 20549 and at the SEC's New York Regional Office,
Seven World Trade Center, New York, NY 10048. Copies of such materials can be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services of the SEC at 450 Fifth Street, N.W., Washington DC 20549,
at prescribed rates.

The Trust's most recent annual and semi-annual reports to
shareholders are available at no cost. To request a report, please call the
Funds toll-free at 800-539-FUND (800-539-3863) or write the Funds at P.O. Box
8527, Boston, MA 02266-8527.

-1-
<PAGE>

PART 1 - AN OVERVIEW

The Board of Trustees of the Trust has sent you this Proxy Statement
to ask for your vote on several proposals affecting your Fund. The Trust will
hold a Special Meeting of Shareholders on March 20, 2000 at 8:30 a.m., Eastern
Time, at its offices located at 3435 Stelzer Road, Columbus, Ohio 43219 in order
to consider the proposals described below. At the Special Meeting, you will be
asked to approve or disapprove these proposals.

The Board of Trustees has fixed the close of business on January 21,
2000 as the Record Date to determine the shareholders who are entitled to notice
of the Special Meeting and to vote their shares. Shareholders are entitled to
cast one vote for each full share and a fractional vote for each fractional
share they own on the Record Date.

The following tables summarize the proposals and how they apply to
the 30 Funds of the Trust for which this Proxy is solicited.

- -------------------------------------------------------------------------------
Proposal 2
Approve Amended and
Proposal 1 Restated Trust
Funds To Elect Ten Trustees Instrument
- -------------------------------------------------------------------------------
All funds, voting together x x
- -------------------------------------------------------------------------------

Funds will vote separately on the following proposals:

Proposal 3 - Approve "Defensive" Rule 12b-1 Distribution Plan

- ------------------------------------------------------------------------------------------------------------------------------------
Funds Proposal 3 Funds Proposal 3
Approve "Defensive" Rule 12b-1 Approve "Defensive" Rule 12b-1
Distribution Plan Distribution Plan
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balanced Lakefront Fund* x
Class A x LifeChoice Conservative Investor* x
Class B LifeChoice Growth Investor* x
Class G LifeChoice Moderate Investor* x
Convertible Securities Limited Term Income* x
Class A x National Municipal Bond
Class G Class A x
Diversified Stock Class B
Class A x Class G
Class B New York Tax-Free
Class G Class A x
Established Value Class B
Class A Class G
Class G Ohio Municipal Bond
Federal Money Market Class A x
Investor Shares x Class G
Select Shares x Ohio Municipal Money Market* x
Financial Reserves* x Prime Obligations* x
</TABLE>

- --------------------
* These Funds have only one class of shares, which will vote on each proposal
as indicated.

-2-
<PAGE>
<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Funds Proposal 3 Funds Proposal 3
Approve Amended and Restated Approve Amended and Restated
Distribution Plan Distribution Plan
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fund for Income Real Estate Investment
Class A x Class A x
Class G Class G
Gradison Government Reserves* Small Company Opportunity
Growth Class A x
Class A x Class G
Class G Special Value
Institutional Money Market Class A x
Investor Shares x Class B
Select Shares x Class G
Intermediate Income Stock Index
Class A x Class A x
Class G Class G x
International Growth Tax-Free Money Market* x
Class A x U.S. Government Obligations
Class B Investor Shares x
Class G Select Shares x
Investment Quality Bond Value
Class A x Class A x
Class G Class G
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

Proposal 4 - Approve New Fundamental Investment Restrictions

Key:

<S> <C> <C> <C>
Proposal 4a Diversification of investments Proposal 4h Underwriting
Proposal 4b Concentration of investments Proposal 4i Pledging
Proposal 4c Joint trading accounts Proposal 4j Investing to influence management or exercise control
Proposal 4d Borrowing Proposal 4k Purchasing on margin and selling short
Proposal 4e Lending Proposal 4l Illiquid securities
Proposal 4f Senior securities Proposal 4m Investment in issuers whose shares are owned by
Victory's Trustees or Officers
Proposal 4g Real estate Proposal 4n Investment in unseasoned issuers
</TABLE>

-3-
<PAGE>
<TABLE>
<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------------------
4a 4b 4c 4d 4e 4f 4g 4h 4i 4j 4k 4l 4m 4n
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balanced x x x x x x x x
Convertible Securities x x x x x x x x x x
Diversified Stock x x x x x x x x
Established Value x x x x x x x x x x x x x x
Federal Money Market x x x x x x x x
Financial Reserves x x x x x x x
Fund for Income x x x x x x x x
Gradison Government Reserves x x x x x x x
Growth x x x x x x x x
Institutional Money Market 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
Investment Quality Bond x x x x x x x x
Lakefront x x x x x x x
LifeChoice Conservative Investor x x x x x x
LifeChoice Growth Investor x x x x x x
LifeChoice Moderate Investor x x x x x x
Limited Term Income x x x x x x x x
National Municipal Bond x x x x x x x
New York Tax-Free x x x x x x x
Ohio Municipal Bond x x x x x x x x
Ohio Municipal Money Market x x x x x x x
Prime Obligations x x x x x x x x
Real Estate Investment x x x x x x x
Small Company Opportunity 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
U.S. Government Obligations x x x x x x
Value x x x x x x x x
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

-4-
<PAGE>

PART 2 - YOUR FUND'S PROPOSALS

PROPOSAL 1
ELECTION OF TRUSTEES

The Board of Trustees has nominated the individuals listed below (the
"Nominees") to serve as Trustees of the Trust until their successors have been
elected and qualified. The Board of Trustees presently consists of seven
Trustees (five of whom are not "interested persons" as defined in the Investment
Company Act of 1940, as amended (the "1940 Act") ("Independent Trustees")) and
three Advisory Trustees (two of whom are Independent Advisory Trustees). If
authority is granted on the accompanying proxy card to vote in the election of
Trustees, the persons named as proxies will vote for the election of the
Nominees named below, each of whom has consented to serve if elected. If any of
the Nominees is unable to serve for any reason, the persons named as proxies
will vote for such other Nominee or Nominees selected by the Board of Trustees,
or the Board may reduce the number of Trustees as provided in the Trust's
bylaws. Any other Nominee or Nominees who would serve as Independent Trustees
will be selected by the Independent Trustees currently serving on the Board of
Trustees. The Trust knows of no reason why any of the Nominees listed below
would be unable to serve if elected.

A. Why should you vote for this proposal?

1940 Act requirements

The Board of Trustees of the Trust presently consists of seven
Trustees, four of whom have been elected by shareholders, and three Advisory
Trustees who have been elected by the Board to fill vacancies created by
resignations or expansion of the Board. The 1940 Act generally provides that at
all times, a majority of trustees must be elected by shareholders, and that new
trustees cannot be appointed to fill vacancies unless, after such appointments,
two-thirds of the trustees have been elected by shareholders. At their regular
meeting on December 11, 1998, the Trustees elected Donald E. Weston and Theodore
Emmerich as Advisory Trustees. At their meeting on December 1, 1999, the
Trustees elected Frankie D. Hughes as an Advisory Trustee. The 1940 Act did not
permit the appointment of Mr. Weston, Mr. Emmerich and Ms. Hughes as Trustees,
because fewer than two-thirds of the Trustees then on the Board would have been
elected by shareholders. Additionally, if any present Trustee were to resign,
under the 1940 Act the Trust would be required to call a special meeting for the
election of trustees within 60 days. Accordingly, you are being asked to elect
all of the current Trustees, plus Mr. Weston, Mr. Emmerich and Ms. Hughes to the
Board of Trustees.

B. Nominees for election to the Board of Trustees

The nominees for election to the Board of Trustees are:

o Theodore H. Emmerich
o Dr. Harry Gazelle
o Frankie D. Hughes
o Eugene J. McDonald
o Dr. Thomas F. Morrissey
o Roger Noall

-5-
<PAGE>
o H. Patrick Swygert
o Frank A. Weil
o Donald E. Weston
o Leigh A. Wilson

The following tables summarize information about the Trustees, their
positions with the Trust, and their principal occupations.

Position(s)
Held With Principal Occupation
Name, Age and Address the Trust During Past 5 Years
- --------------------- --------- ---------------------------
Theodore H. Emmerich, 73 Advisory Trustee Retired; until 1986,
1201 Edgecliff Place managing partner
Apt. 1052 (Cincinnati office) Ernst &
Cincinnati, Ohio 45206 Whinney (now Ernst & Young
LLP); Director of Carillon
Fund, Inc. (investment
company); American
Financial Group (insurance)
and Cincinnati Milacron
Commercial Corporation
(financing); Trustee of
Summit Investment Trust
(investment company).

Dr. Harry Gazelle, 72 Trustee Retired radiologist, Drs.
17822 Lake Road Hill and Thomas
Lakewood, OH 44107 Corporation.

Frankie D. Hughes, 47 Advisory Trustee Since 1993, Principal and
Hughes Capital Management, Inc. Chief Investment Officer of
315 Cameron Street, 2nd Floor Hughes Capital Management,
Alexandria, VA 22314 Inc. (fixed income asset
management firm).

Eugene J. McDonald, 67 Trustee Since 1990, Executive Vice
Duke Management Company President and Chief
2200 West Main Street Investment Officer for
Suite 1000 Asset Management of Duke
Durham, NC 27705 University and President
and CEO of Duke Management
Company; Director of CCB
Financial Corporation, Flag
Group of Mutual Funds,
Greater Triangle Community
Foundation, and North
Carolina Bar Association
Investment Committee.

Dr. Thomas F. Morrissey, 66 Trustee Since 1970, Professor,
Weatherhead School of Management Weatherhead School of
Case Western Reserve University Management, Case Western
10900 Euclid Avenue Reserve University; from
Cleveland, OH 44106-7235 1989 to 1995, Associate
Dean of Weatherhead School
of Management.

Roger Noall, * 64 Chairman and Since 1996, Executive of
c/o Brighton Apt. 1603 Trustee KeyCorp; from 1995 to 1996,
8231 Bay Colony Drive General Counsel and
Naples, FL 34108 Secretary of KeyCorp; from
1994 to 1996, Senior
Executive Vice President
and Chief Administrative
Officer of KeyCorp;
Director of Alleghany
Corporation and Elite
Information Systems, Inc.

- ------------------
* Mr. Noall and Mr. Weston are "interested persons" as defined in the 1940
Act.

-6-
<PAGE>

Position(s)
Held With Principal Occupation
Name, Age and Address the Trust During Past 5 Years
- --------------------- --------- ---------------------------

H. Patrick Swygert, 56 Trustee Since 1995, President,
Howard University Howard University; from
2400 6th Street, N.W. 1990 to 1995, President,
Suite 402 State University of New
Washington, DC 20059 York at Albany; Director of
Hartford Financial Services
Group, Hartford Life
Insurance and Federal
National Mortgage
Association; Chairman,
Community Business
Partnership, Greater
Washington Board of Trade.

Frank A. Weil, 68 Trustee Since 1984, Chairman and
Abacus & Associates Chief Executive Officer of
147 E. 47th Street Abacus & Associates, Inc.
New York, NY 10017 (private investment firm);
Director and President of
the Hickrill Foundation.

Donald E. Weston,* 64 Advisory Trustee Since October 1998,
McDonald Investments Inc. Chairman of Gradison
580 Walnut Street McDonald Investments, a
Cincinnati, Ohio 45202 division of McDonald
Investments Inc.; until
October 1998, Chairman of
the Gradison Division of
McDonald & Company
Securities, Inc. and a
Director of McDonald &
Company Investments Inc.;
Director of Milacron
Commercial Corporation and
Katchall Industries Int'l,
Inc.

Leigh A. Wilson,** 55 President and Since 1989, Chairman and
New Century Care, Inc. Trustee Chief Executive Officer,
53 Sylvan Road North New Century Care, Inc.
Westport, CT 06880 (merchant bank); since
1995, Principal of New
Century Living, Inc.; since
1989, Director of Chimney
Rock Vineyard and Chimney
Rock Winery.

C. Information about the Board of Trustees

The Board currently has an Investment Committee, a Business, Legal
and Audit Committee, and a Board Process and Nominating Committee. The members
of the Investment Committee are Messrs. Weil (Chairman), McDonald, Swygert, and
Weston and Dr. Morrissey. The function of the Investment Committee is to review
the existing investment policies of the Trust, including the levels of risk and
types of funds available to shareholders, and make recommendations to the
Trustees regarding the revision of such policies or, if necessary, the
submission of such revisions to the Trust's shareholders for their
consideration. The members of the Business, Legal and Audit Committee are Dr.
Gazelle (Chairman), Ms. Hughes, and Messrs. Emmerich and Wilson. The function of
the Business, Legal and Audit Committee is to recommend independent auditors,
monitor accounting and financial matters, and review compliance and contract
matters. Mr. Swygert is the Chairman of the Board Process and Nominating
Committee (consisting of all the Trustees and Advisory Trustees), which
nominates persons to serve as Independent Trustees and Trustees to serve on
committees of the Board. This Committee also reviews Trustee performance and
compensation issues. The Board Process and Nominating Committee has a Nominating
Subcommittee, composed of Messrs. Swygert, Emmerich, McDonald and Weil and Drs.
Gazelle and Morrissey. This Subcommittee makes recommendations to the Board
Process and Nominating Committee concerning candidates to serve as trustees.
Shareholders may submit to the Trust recommendations for individuals to serve as
Trustees. See Part 3 -- "More on Proxy Voting and Shareholder Meetings
- --Submission of Proposals for the Next Annual Meeting."

- -----------------
** Mr. Wilson is deemed to be an "interested person" of the Trust under the
1940 Act solely by reason of his position as President.

-7-
<PAGE>

Last year, the Board of Trustees held eight meetings, of which four
were regular meetings. Each Committee held four meetings. The Nominating
Subcommittee of the Board Process and Nominating Committee held two meetings.

D. Remuneration of Trustees

Each Trustee (including Advisory Trustees) (other than Mr. Wilson)
receives an annual fee of $31,500 for serving as Trustee of all the Funds of the
Trust, and an additional per meeting fee ($3,500 in person and $1,500 per
telephonic meeting). Mr. Wilson receives an annual fee of $37,500 for serving as
President and Trustee for all of the Funds of the Trust, and an additional per
meeting fee ($4,100 in person and $1,800 per telephonic meeting). The Adviser
pays the expenses of Messrs. Noall and Weston.

The following table indicates the estimated compensation received by
each Trustee from the Victory "Fund Complex"(1) for the fiscal year ended
October 31, 1999.

<TABLE>
<CAPTION>
Aggregate
Pension or Retirement Estimated Annual Compensation
Benefits Accrued as Benefits Upon Aggregate Compensation from Victory
Portfolio Expenses Retirement from Victory Portfolios "Fund Complex"
------------------ ---------- ----------------------- --------------
<S> <C> <C> <C> <C> <C>
Edward P. Campbell*.................. -0- -0- $9,150 $10,275
Theodore H. Emmerich#................ -0- -0- 32,350 35,635
Harry Gazelle........................ -0- -0- 42,900 47,900
Frankie D. Hughes**.................. -0- -0- -0- -0-
Eugene J. McDonald................... -0- -0- 45,900 50,900
Thomas F. Morrissey.................. -0- -0- 45,900 50,900
Roger Noall.......................... -0- -0- -0- -0-
H. Patrick Swygert................... -0- -0- 41,400 46,400
Frank A. Weil........................ -0- -0- 45,900 50,650
Donald Weston#....................... -0- -0- -0- -0-
Leigh A. Wilson...................... -0- -0- 56,500 61,500
</TABLE>

(1) There are currently 35 mutual funds in the Victory "Fund Complex" for which
the above-named Trustees are compensated.

* Mr. Campbell resigned as of December 31, 1998.

# Messrs. Emmerich and Weston commenced service as Advisory Trustees as of
January 1, 1999.

** Ms. Hughes commenced service as an Advisory Trustee as of January 1, 2000.

E. Required vote

Trustees are elected by a plurality of the votes cast at the Special Meeting
in person and by proxy.

F. Does the Board of Trustees recommend the election of these Nominees to the
Board of Trustees of the Trust?

Yes. The Board of Trustees recommends that shareholders vote to elect the
Nominees to the Board of Trustees of the Trust.

-8-
<PAGE>

PROPOSAL 2
AMENDMENT AND RESTATEMENT OF TRUST INSTRUMENT

The Board of Trustees has approved an Amended and Restated Trust
Instrument for the Trust.

o The primary purpose of this proposal is to modernize the governing
document of the Trust and to allow the Trustees more flexibility in
overseeing the affairs of the Trust.

To adopt the Amended and Restated Trust Instrument, we need
shareholder approval.

The next few pages of this Proxy Statement discuss the details of
each material proposed change in the Amended and Restated Trust Instrument and
how it will affect your Fund.

A. Why do we want to adopt the Amended and Restated Trust Instrument?

The Trust was originally established as a business trust under the
laws of the Commonwealth of Massachusetts in 1984. In 1996, the Trust
reorganized as a business trust established under Delaware law. The operations
of the Trust are governed by a Trust Instrument dated December 5, 1995, as
amended on October 23, 1997.

The following summarizes the material changes that the Amended and
Restated Trust Instrument would contain, and summarizes the reasons that the
Board of Trustees believes that those changes would be in the best interests of
shareholders. Certain non-material changes, which are also included in the
Amended and Restated Trust Instrument, are not described here, but are noted in
the form of Amended and Restated Trust Instrument included with this Proxy
Statement. Because this is a summary, it does not contain all of the information
that may be important to you. Please refer to the complete form of Amended and
Restated Trust Instrument, which appears as Exhibit A in Part 6 of this Proxy
Statement to review all of the proposed changes before you decide how to vote on
this proposal.

o Reorganizations. The amendments would clarify the ability of the
Board of Trustees to reorganize a Fund with another investment
company or another series of the Trust or to liquidate a Fund, if
the Board determines that it would be in the best interests of
shareholders. The Trustees could take these actions without
shareholder approval, unless such approval is required by law.
The additional flexibility would save shareholders the expense of
costly special meetings. One situation where the Board of
Trustees might choose to reorganize a Fund without first
obtaining shareholder approval is where the acquiring Fund is a
shell created specifically for the reorganization and which after
the reorganization will be identical to the acquired Fund.
[Section 4.01(x)].

o Voting powers. The amendments would allow the Board of Trustees,
in its discretion, to make your voting rights "dollar-based,"
which is a different voting rights system than your Fund uses now.
Currently, all Funds of the Trust provide shareholders with one
vote for each whole share that they own and a fractional vote for
each fractional share that they own. This share-based system
treats shareholders equitably so long as all shares of various
Funds have the same share price. However, the share prices of the
Funds will vary significantly over time due to their different
investment programs. Similarly, the share prices of a Fund's
various share classes will differ over time because of their
different expense structures. As a result, when

-9-
<PAGE>

issues are voted at the Trust level, shareholders who acquired
their shares at lower prices have relatively greater voting power
than shareholders who paid more for their shares. Giving the Board
of Trustees the option to change to dollar-based voting will
ensure that shareholders' voting rights remain proportionate to
their financial interests if the Board believes it to be in the
best interests of shareholders. [Section 7.01(c)]

o Required redemptions. The amendments would clarify the ability of
the Board of Trustees to allow the Trust to require shareholders
to redeem their shares under certain circumstances. The Board of
Trustees may determine that it is in the best interest of all
shareholders to require redemptions of small accounts, which are
costly to maintain, or where a shareholder fails to provide a
Social Security number or taxpayer identification number as
required by law. This amendment could result in lower expenses to
the Trust or individual Funds. [Section 9.05]

o Record date. The amendments would change the maximum number of
days for a shareholder meeting to be held after the record date to
90 days from the current 60-day requirement. This change would
allow additional time to solicit shareholder votes and avoid
additional costs which can arise when shareholder meetings are
delayed. [Section 11.03]

o Master/Feeder structure. The amendments would allow the Trustees
to restructure one or more Funds into a "master/feeder" structure,
in which one Fund (a "feeder") would invest all of its assets in
another "master" Fund. Sometimes a master/feeder structure can
benefit shareholders because combining the asset bases of funds
with similar investment objectives and strategies may achieve
economies of scale and reduce costs and expenses of portfolio
management while retaining the benefits of having discrete,
targeted investment products. Although there are no current plans
to adopt this structure, the Trustees would have the power to use
the structure in the future if they determined it would be in the
best interests of shareholders. [Section 11.05(e)]

o Derivative actions. Any Trustee who is also a trustee of an
investment company affiliated with the Trust would not be deemed
to be an "interested person" under state law solely because of
such affiliation for purposes of determining whether the Trust
satisfies the notification provisions in the event of a
shareholder derivative action. Under current law, notification of
a shareholder derivative suit must be given to the Board where
fewer than a majority of the Trustees are interested persons. This
amendment is in response to recent litigation addressing the
issue. Whether a trustee is an "interested person" under state or
federal law depends on a number of factual circumstances. This
amendment merely clarifies that the fact that a trustee is also a
trustee of an affiliated investment company does not make that
trustee an "interested person" solely because of that affiliation.
[Section 11.08]

o Future amendments to the Trust Instrument. The amendments would
clarify the ability of the Trustees to amend the Trust Instrument
in the future without shareholder consent unless such consent is
required by law. This change would give the Board of Trustees
greater flexibility in overseeing the operations of the Trust
without incurring the additional expense of holding a special
meeting of shareholders to approve amendments to the Trust
Instrument where shareholder approval is not required by law.
[Section 11.09]

-10-
<PAGE>

B. Required vote

Proposal 2 requires the approval of a majority of the shares of the
Trust voted in person or by proxy at the Special Meeting. You may vote in favor
of, or abstain from voting on, all of the proposed material changes to the Trust
Instrument or, should you wish to vote against any particular proposed material
changes, you may so indicate on the proxy card. If shareholders of the Trust do
not approve this proposal, or any part of the proposal, the existing Trust
Instrument or that part of the Trust Instrument will remain in effect, and the
Board of Trustees will consider possible alternatives.

C. Has the Board of Trustees approved this Amended and Restated Trust
Instrument?

Yes. The Board of Trustees of the Trust carefully considered this
proposal at its meeting on December 1, 1999. After full consideration, the
Board, including all of the Independent Trustees, unanimously approved this
Amended and Restated Trust Instrument and recommended that it be submitted to
shareholders for approval. The Board recommends that shareholders vote "for"
Proposal 2.

PROPOSAL 3
APPROVE "DEFENSIVE" RULE 12b-1 DISTRIBUTION PLAN

This proposal is applicable only to certain classes of certain Funds.
Only shareholders owning, on the Record Date, Class A and Class G Shares of the
Stock Index Fund and Class A Shares, Select Shares or Investor Shares of those
Funds listed below will vote on this proposal:
<TABLE>
<CAPTION>

<S> <C> <C> <C>
Balanced International Growth Ohio Municipal Money Market
Convertible Securities Investment Quality Bond Prime Obligations
Diversified Stock Lakefront Real Estate Investment
Federal Money Market LifeChoice Conservative Investor Small Company Opportunity
Financial Reserves LifeChoice Growth Investor Special Value
Fund for Income LifeChoice Moderate Investor Stock Index
Growth Limited Term Income Tax-Free Money Market
Institutional Money Market National Municipal Bond U.S. Government Obligations
Intermediate Income New York Tax-Free Value
Ohio Municipal Bond
</TABLE>

For the following Funds, this is a new "defensive" Rule 12b-1 Plan:

Balanced Ohio Municipal Bond
Diversified Stock Prime Obligations
Growth Small Company Opportunity
Intermediate Income Special Value
International Growth Stock Index - Class A
Investment Quality Bond Tax-Free Money Market
Limited Term Income Value

For the following Funds, which have already adopted a "defensive"
Rule 12b-1 Plan, this is an amendment and restatement of the prior Plan, which
is desirable to avoid administrative confusion:

-11-
<PAGE>

Convertible Securities LifeChoice Moderate Investor
Federal Money Market National Municipal Bond
Financial Reserves New York Tax-Free
Fund for Income Ohio Municipal Money Market
Institutional Money Market Real Estate Investment
Lakefront Stock Index - Class G
LifeChoice Conservative Investor U.S. Government Obligations
LifeChoice Growth Investor

Adoption of this Plan does not change the Trustees' responsibility to
ensure that Fund assets are used appropriately.

Because this discussion is only a summary, it may not contain all of
the information that may be important to you. Please refer to the complete form
of the Plan, which appears as Exhibit B in Part 6 of this Proxy Statement, to
review the entire Plan before you decide how to vote on this proposal.

A. The Plan

Rule 12b-1 under the 1940 Act provides that a registered investment
company (i.e., a mutual fund), which engages "directly or indirectly in
financing any activity which is primarily intended to result in the sale of
shares issued by such company, including, but not necessarily limited to,
advertising, compensation of underwriters, dealers, and sales personnel, the
printing and mailing of prospectuses to other than current shareholders, and the
printing and mailing of sales literature," may only do so pursuant to a written
plan "describing all material aspects of the proposed financing of
distribution."

The Board of Trustees has adopted a Rule 12b-1 Plan (the "Plan") to
allow the Adviser, any sub-adviser and the distributor to incur certain expenses
that might be considered to constitute indirect payments by the Funds of
distribution expenses. THE PLAN DOES NOT AUTHORIZE PAYMENTS FOR DISTRIBUTION BY
A FUND DIRECTLY OUT OF ITS ASSETS. A plan with these features is called a
"defensive" Rule 12b-1 plan.

The SEC has neither approved nor disapproved the Plan. The Plan
contemplates that all expenses relating to the distribution of Fund shares shall
be paid by KAM or the distributor out of their past profits and other resources,
including advisory fees paid by a Fund to KAM. The Plan also recognizes that KAM
may make payments from these sources to securities dealers and to other third
parties who engage in the sale of Fund shares or who render shareholder
services. The Plan provides that, to the extent that a Fund's payment of
management fees to KAM or a sub-adviser might be considered to constitute the
"indirect" financing of activities "primarily intended to result in the sale of
shares," such payment is expressly authorized.

The Plan specifically recognizes that the Adviser, any sub-adviser,
administrator or the distributor, directly or through an affiliate, may use its
fee revenue, past profits, or other resources, without limitation, to pay
promotional and administrative expenses in connection with the offer and sale of
shares of the Funds. Direct payments are not made from the assets of the Funds
to the Distributor for performing these or other services related to the
distribution of your Fund Shares. In addition, the Plan provides that the
Adviser, a sub-adviser and the distributor may use their respective resources,
including fee revenues, to make payments to third parties that provide
assistance in selling the Funds' shares, or to third parties, including banks,
that render shareholder support services.

-12-
<PAGE>

The Funds may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments under the
Plan. No preference for the instruments of such depository institutions will be
shown in the selection of investments. Although the Plan contemplates that KAM
may engage in various distribution activities, it does not require KAM to
perform any specific type of distribution activity or to incur any specific
level of expense for such activities. The Plan also contains provisions relating
to reporting obligations and to its amendment and termination as required by the
Rule.

The Plan is not substantially different than the original plan. Only
technical changes have been made to make the Plan consistent with the current
operation and structure of the Trust and the Funds. The Plan continues to
provide for NO payments out of the assets of the Funds.

If approved by shareholders, the Plan will continue in effect as long
as its continuance is specifically approved at least annually by a majority of
the Board of Trustees, including a majority of the Trustees who are Independent
Trustees and who have no direct or indirect financial interest in the operation
of the Plan or any agreement related to the Plan (the "Non-interested
Trustees"), cast in person at a meeting called for the purpose of voting on the
Plan.

The Plan may be amended at any time by the Trustees, except that it
may not be amended to authorize direct payments by a Fund to finance any
activity primarily intended to result in the sale of shares issued by a Fund or
to increase materially the amount spent by a Fund for distribution without the
approval of a majority of the outstanding voting securities of a Fund and the
Trustees. In addition, any amendment of a Fund's investment advisory agreement
to increase the amount paid by a Fund to KAM shall be effective only upon
approval by vote of a majority of the outstanding voting securities of that
Fund. All material amendments to the Plan also must be approved by a majority of
the Independent Trustees. The Plan, and any agreements related to the Plan, may
be terminated at any time by a vote of the majority of the Independent Trustees
or by a vote of the majority of the outstanding voting securities of the Fund.

As required by the Rule, while the Plan is in effect, the selection
and nomination of all Independent Trustees shall be committed to the discretion
of the Independent Trustees then in office.

B. Why do we want to adopt this Amended and Restated Distribution Plan?

This Plan is designed to avoid legal uncertainties that may arise
from the ambiguity of the phrase "primarily intended to result in sales of
shares," and from the term "indirectly." The Plan does not provide for the
payment of any money by a Fund. The Plan provides that, to the extent that a
Fund's payment of management fees to KAM, or administration fees to BISYS Fund
Services, Inc., each Fund's administrator and distributor ("BISYS"), might be
considered to constitute "indirect" financing of activities primarily intended
to result in the sale of shares, such payment is expressly authorized.

C. Required vote

Proposal 3 requires the approval by a majority of the outstanding
securities of each class of each Fund voting separately. A majority of the
outstanding securities means the lesser of one more than half of the number of
shares of the Fund that were issued and outstanding as of the Record Date, or
67% of the voting shares present at the Special Meeting if more than 50% of the
voting shares are present at the Special Meeting in person or by proxy.

-13-
<PAGE>

D. Has the Board of Trustees approved the Plan?

Yes. As required by Rule 12b-1, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan prior to its
approval, and have determined that there is a reasonable likelihood that the
Plan will benefit the Funds and their shareholders. The Trustees believe that
the fees paid by the Funds to KAM under the investment advisory agreement and to
Bisys Fund Services of Ohio, Inc. under the administration agreement are fair
and reasonable, that the services provided thereunder are necessary and
appropriate for the Funds and their shareholders, and that the Funds do not
indirectly finance the distribution of their shares in contravention of Rule
12b-1. Nonetheless, the Trustees concluded that adoption of the Plan would avoid
legal uncertainties that might arise as a result of what they believe to be
potentially subjective and ambiguous language contained in Rule 12b-1 and in
public releases issued by the SEC in connection with the proposed adoption of
the Rule. The Trustees believe that the adoption of the Plan is advisable to
minimize such legal uncertainties and to provide other benefits to the Funds and
their shareholders. The Trustees noted that the Plan does not involve any direct
payment by any Fund to finance any activity primarily intended to result in the
sale of its shares, and that any amendment of any Fund's investment advisory
agreement with KAM to increase the amount paid thereunder would require approval
of both the Trustees and the Fund's shareholders.

After full consideration at its meeting on December 1, 1999, the
Board, including the Independent Trustees (who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related to
the Plan), unanimously approved the Plan and recommended that it be submitted to
shareholders for approval. The Board recommends that shareholders vote "for"
Proposal 3.

PROPOSAL 4

CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS

Proposal 4 is a series of proposals to change certain fundamental
investment restrictions presently applicable to the different Funds. We have
described each proposal contained within Proposal 4 separately and listed them
in order below. The table at the front of this Proxy Statement will assist you
in determining which proposals apply to your Funds and what investment policy or
restriction changes are proposed for each Fund.

The 1940 Act requires each Fund to have certain specific investment
policies that can be changed only by vote of a majority of the outstanding
voting securities of a Fund. These policies are often referred to as
"fundamental" investment policies or restrictions. Other policies not enumerated
in the 1940 Act can be designated by a Fund as fundamental. Any policy
designated by a Fund as "fundamental" may only be changed by the vote of a
majority of the outstanding voting securities of that Fund.

Certain fundamental policies have been adopted in the past by the
Funds to reflect regulatory, business or industry conditions that are no longer
in effect. Accordingly, KAM conducted a review of all of the fundamental
policies and restrictions with the following goals: (i) to simplify and
modernize the Funds' policies that are required to be fundamental, (ii) to make
the fundamental policies and restrictions of all the Funds consistent to the
extent possible, and (iii) to reclassify as non-fundamental or to eliminate
those policies previously required to be fundamental that are no longer required
to be so classified or that are no longer necessary. The Board may change
non-fundamental policies without shareholder approval, subject to compliance
with applicable disclosure requirements under rules promulgated by the SEC.

-14-
<PAGE>

These proposals seek shareholder approval of changes that are
intended to accomplish the foregoing goals. By making the fundamental policies
of all Funds consistent where it is possible to do so, monitoring compliance
would be streamlined and more efficient. Clarifying and modernizing investment
restrictions generally would allow the Funds to operate more efficiently within
the limits of the 1940 Act. These revisions should give the Funds greater
flexibility to take advantage of and react to changes in financial markets and
new investment vehicles. In addition, by reducing to a minimum those policies
that can be changed only by shareholder vote, the Funds in the future may be
able to avoid the costs and delay associated with a shareholder meeting, and the
Board of Trustees believes that the Adviser's ability to manage the Funds'
portfolios in a changing regulatory or investment environment will be enhanced.

If shareholders approve these investment policy changes at the
Special Meeting, the Trust will amend or supplement its registration statement
to reflect the elimination, modification and/or reclassification of the
investment policies and restrictions. The Trust will notify shareholders of any
future investment policy changes.

You may vote in favor of, or abstain from voting on, all of the
proposed changes applicable to your Fund or, should you wish to vote against any
particular proposed change, you may so indicate on the proxy card.

Item 4a - Diversification of investments

The Board of Trustees recommends that the investment restrictions
relating to diversification be eliminated for all Funds. This will not change
the diversification policy of any Fund or allow that policy to be changed
without shareholder approval. Section 5(b) of the 1940 Act requires each Fund to
indicate whether it is diversified or non-diversified. All of the Funds are
diversified except:

National Municipal Bond
New York Tax-Free
Ohio Municipal Bond
Real Estate Investment

Reason for the change

Diversified Funds. If a Fund elects to be diversified, it is required
to invest its assets according to specific statutory provisions. Since the 1940
Act dictates the requirements for a diversified Fund, there is no need to have
any specific fundamental investment restriction regarding diversification. In
addition, any diversified Funds wishing to become non-diversified must first
obtain shareholder approval.

Non-Diversified Funds. If a Fund elects to be non-diversified, it is
not subject to the diversification requirements of the 1940 Act. However, all of
the Funds, including the non-diversified Funds, are regulated investment
companies under the Internal Revenue Code of 1986, as amended (the "Code"), and
are subject to specific requirements under the Code. Since each Fund must adhere
to these requirements in order to be treated as a regulated investment company
under the Code, there is no need to state these requirements in a fundamental
restriction.

Operating criteria

Each of the following money market Funds operates in accordance with
Rule 2a-7 under the 1940 Act and, therefore, must invest its assets so that no
more than 5% of its total assets would be invested in any single issuer (other
than securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities ("U.S. Government Securities")):

-15-
<PAGE>

Federal Money Market Prime Obligations
Financial Reserves Tax-Free Money Market
Gradison Government Reserves U.S. Government Obligations
Institutional Money Market

In addition, in accordance with Rule 2a-7 under the 1940 Act, each of
these money market Funds may also invest up to 25% of its total assets in the
securities of single issuer for up to three days.

Ohio Municipal Money Market Fund, in accordance with Rule 2a-7 under
the 1940 Act, must invest its assets so that with respect to 75% of its total
assets, no more than 5% of its total assets is invested in the securities of a
single issuer (other than U.S. Government Securities).

Each of the following diversified non-money market funds must invest
its total assets so that with respect to 75% of these assets, no more than 5% is
invested in any one issuer (other than U.S. Government Securities), and no more
than 10% of the outstanding voting securities of any issuer can be held by a
Fund.
<TABLE>
<CAPTION>

<S> <C> <C> <C>
Balanced Intermediate Income LifeChoice Moderate Investor
Convertible Securities International Growth Limited Term Income
Diversified Stock Investment Quality Bond Small Company Opportunity
Established Value Lakefront Special Value
Fund for Income LifeChoice Conservative Investor Stock Index
Growth LifeChoice Growth Investor Value
</TABLE>

To comply with the Code, each of the following non-diversified
non-money market Funds must invest its assets so that no more than 25% of its
total assets is invested in the securities of a single issuer (other than U.S.
Government Securities) and, with regard to 50% of its total assets, no more than
5% is invested in any one issuer (other than U.S. Government Securities) and no
more than 10% of the outstanding voting securities of any issuer can be held by
a Fund:

National Municipal Bond Ohio Municipal Bond
New York Tax-Free Real Estate Investment

The applicable provisions of the Code apply at the end of each
quarter, and contain windows of time in which adjustments may be made in a
Fund's portfolio if a Fund exceeds the Code's percentage limitations.

Who is the "issuer" of tax-exempt securities? In determining who is
considered the issuer of a tax-exempt security, each state and each political
subdivision, agency and instrumentality of each state and each multi-state
agency of which such state is a member is deemed to be a separate issuer. When
securities are backed by the assets and/or revenues of a particular
instrumentality, facility or subdivision, such entity is considered to be the
issuer. Private activity bonds that are backed only by the assets and/or
revenues of a non-governmental issuer are considered to be issued by such
non-governmental issuer.

-16-

<PAGE>

Item 4b - Concentration of investments

This item does not apply to the LifeChoice or U.S. Government
Obligations Funds.

The 1940 Act requires a Fund to state its policies concerning
concentration of investments. These policies, which are stated in the form of
concentration restrictions, cannot be changed without shareholder approval.
Under the 1940 Act, a Fund "concentrates" its investments in an industry if 25%
or more of its total assets are invested in that industry. The Board of Trustees
recommends that every Fund revise and update its policy regarding concentration
to be consistent with current legal interpretations. These changes do not in any
way change how any Fund will concentrate its investments. Rather, these changes
will ensure that where Fund assets are managed the same way with respect to
concentration, the policy will be stated the same way to avoid the possibility
of inconsistent administration. In addition, if the proposed restrictions are
adopted, the Funds would be able to invest substantially all of their assets
into other "master" mutual funds, if desired. The present restrictions do not
permit that type of investment.

Reason for the change

The proposed modifications modernize and clarify the restrictions
concerning concentration by explicitly excluding U.S. Government Securities, as
is permitted by legal interpretation, and by permitting the Funds to invest in
other investment companies that have similar investment objectives and policies
on concentration of investments ("master" funds). These changes would give the
Funds more flexibility to enter into other types of investments at future times
in response to changing financial markets.

For each group of Funds, or each individual Fund, we set forth below
the proposed new restriction followed by the current restrictions.

The Board of Trustees is recommending that the Funds listed below
change their investment restriction on concentration to read as follows:

Proposed Concentration Restriction

The Funds may not:

purchase the securities of any issuer (other than the securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, repurchase agreements secured thereby, or
tax-exempt securities issued by governments or political subdivisions
of governments except tax-exempt securities backed only by the assets
or revenues of non-governmental issuers) if, as a result, 25% or more
of a Fund's total assets would be invested in the securities of
companies whose principal business activities are in the same
industry. This restriction shall not prevent a Fund from investing
all of its assets in a "master" fund that has adopted similar
investment objectives, policies and restrictions.

-17-
<PAGE>
- -------------------------------------------------------------------------------
Current Concentration Restriction
- -------------------------------------------------------------------------------
Balanced The Funds may not:
Diversified Stock
Growth purchase the securities of any issuer
Intermediate Income (other than securities issued or guaranteed
International Growth by the U.S. government or any of its
Investment Quality Bond agencies or instrumentalities, or
Lakefront repurchase agreements secured thereby) if,
Limited Term Income as a result, more than 25% of the Fund's
Special Value total assets would be invested in the
Stock Index securities of companies whose principal
Value 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.

Convertible Securities The Fund may not:

purchase securities if such purchase would
cause more than 25% of any of the Funds'
total assets to be invested in the
securities of issuers in any one industry.

Established Value The Established Value Fund will not
concentrate more than 25% of its total
assets in any one industry.

Fund for Income The Fund may not:

invest more than 25% of the Fund's total
assets in securities whose interest
payments are derived from revenue from
similar projects.

Small Company Opportunity The Fund may not:

Proposed Concentration Restriction

With respect to Financial Reserves Fund, Institutional Money Market
Fund and Prime Obligations Fund, the Funds may not:

Consistent with its investment objective and policies, each Fund
reserves the right to concentrate its investment in obligations
issued by domestic banks.

-18-

<PAGE>
- -------------------------------------------------------------------------------
Current Concentration Restriction
- -------------------------------------------------------------------------------
Financial Reserves The Funds may not:
Institutional Money Market
purchase the securities of any issuer
(other than obligations issued or
guaranteed as to principal and interest by
the United States government, its agencies
or instrumentalities) if, as a result
thereof: (i) more than 5% of its total
assets would be invested in the securities
of such issuer, provided, however, that in
the case of certificates of deposit, time
deposits and bankers' acceptances, up to
25% of the Fund's total assets may be
invested without regard to such 5%
limitation, but shall instead be subject to
a 10% limitation; (ii) more than 25% of its
total assets would be invested in the
securities of one or more issuers having
their principal business activities in the
same industry, provided, however, that it
may invest more than 25% of its total
assets in the obligations of domestic
banks. Neither finance companies as a group
nor utility companies as a group are
considered a single industry for purposes
of this policy (i.e., finance companies
will be considered a part of the industry
they finance and utilities will be divided
according to the types of services they
provide).

Prime Obligations The Fund may not:

purchase the securities of any issuer
(other than securities issued or guaranteed
by the U.S. Government or any of its
agencies or instrumentalities, or
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. Notwithstanding the foregoing,
there is no limitation with respect to
certificates of deposit and banker's
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.
- --------------------------------------------------------------------------------
The proposed concentration restriction for the Real Estate Investment
Fund will permit it to retain its policy to concentrate its investments in
securities in the real estate industry. The proposed concentration restriction
for this Fund reads as follows:

Proposed Concentration Restriction - Real Estate Investment Fund

The Fund may not:

purchase the securities of any issuer (other than the securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, repurchase agreements secured thereby, or
tax-exempt securities issued by governments or political subdivisions
of governments except tax-exempt securities backed only by the assets
or revenues of non-governmental issuers) if, as a result, 25% or more
of the Fund's total assets would be invested in the securities of
companies whose principal business activities are in the same
industry. This restriction shall not prevent the Fund from investing
all of its assets in a "master" fund that has adopted similar
investment objectives, policies and restrictions.

Notwithstanding the foregoing, the Fund will concentrate its
investments in securities in the real estate industry.

-19-
<PAGE>
- --------------------------------------------------------------------------------
Current Concentration Restriction
- --------------------------------------------------------------------------------
Real Estate Investment The Fund may not:

Finally, the proposed concentration restriction for the National
Municipal Bond Fund, New York Tax-Free Fund, Ohio Municipal Bond Fund, Ohio
Municipal Money Market Fund and Tax-Free Money Market Fund recognizes that the
restriction related to concentration does not apply to investments in municipal
securities, because the issuers of these securities are not members of any
industry. The proposed restriction will preserve and restate those Funds'
additional provision with respect to investments in industrial development
bonds. These Funds have no need to retain the ability to concentrate their
investments in securities issued by U.S. banks. The proposed concentration
restriction for these five Funds reads as follows:

Proposed Concentration Restriction

The Funds may not:

When investing in industrial development bonds, a Fund will look to
the source of the underlying payments. A Fund will not invest 25% or
more of its total assets in industrial development bonds with
underlying payments derived from similar projects.

- --------------------------------------------------------------------------------
Current Concentration Restriction
- --------------------------------------------------------------------------------
National Municipal Bond The Fund may not:

purchase securities (other than those
issued or guaranteed by the U.S. government
or any securities of its agencies or
instrumentalities or tax-exempt obligations
issued or guaranteed by a U.S. territory or
possession or a state or local government,
or a political subdivision of the
foregoing) if, as a result, more than 25%
of the Fund's total assets would be
invested in securities of companies whose
principal business activities are in the
same industry; for the purpose of this
restriction, utility companies will be
divided according to their services, for
example, gas, gas transmission, electric
and gas and telephone will each be
considered a separate industry. Industrial
development revenue bonds which are issued
by non-governmental entities within the
same industry shall be subject to this
industry limitation.

-20-
<PAGE>

with respect to non-municipal investments,
purchase securities (other than securities
of the United States government, its
agencies or instrumentalities), if as a
result of such purchase 25% or more of the
Fund's total assets would be invested in
any one industry, or enter into a
repurchase agreement if, as a result
thereof, more than 15% of its net assets
would be subject to repurchase agreements
maturing in more than seven days;

and

invest more than 25% of the Fund's total
assets in securities whose interest
payments are derived from revenue from
similar projects.

Ohio Municipal Bond The Fund may not:

purchase the securities of any issuer
(other than securities issued or guaranteed
by the U.S. government or any of its
agencies or instrumentalities, or
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; 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.

Ohio Municipal Money Market The Fund will not:

purchase securities (other than securities
issued or guaranteed by the U.S.
government, its agencies, or
instrumentalities) if, as a result of such
purchase, 25% or more of the value of the
Fund's total assets would be invested in
any one industry. The Fund will not invest
25% or more of its assets in securities,
the interest upon which is paid from
revenues of similar type projects. The Fund
may invest 25% or more of its assets in
industrial development bonds.

Tax-Free Money Market The Fund may not:

Notwithstanding the foregoing, there is no
limitation with respect to certificates of
deposit and banker's 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 a separate industries.

Proposed Elimination of Concentration Restriction

The Board of Trustees is proposing to eliminate the current
concentration restriction for the Federal Money Market Fund and Gradison
Government Reserves Fund. As a matter of investment

-21-
<PAGE>

policy, these Funds invest only in short term obligations issued or guaranteed
as to principal and interest by the U.S. government, its agencies or
instrumentalities or repurchase agreements secured by these securities. Since
the SEC permits investment companies to exclude from their concentration
policies and restrictions obligations issued or guaranteed as to principal and
interest by the U.S. government, its agencies or instrumentalities, there is no
need for a concentration restriction for these Funds.

purchase securities if such purchase would
cause more than 25% of any of the Funds'
total assets to be invested in the
securities of issuers in any one industry,
provided however that the Federal Money
Market Fund reserves the right to
concentrate in securities issued or
guaranteed as to principal and interest by
the United States Government, its agencies
or instrumentalities or U.S. bank
obligations. The Federal Money Market Fund,
however, will not exercise its right to
concentrate in U.S. bank obligations.

Gradison Government Reserves The Funds may not:

purchase the securities of any issuer other
than securities issued or guaranteed by the
U.S. government or any of its agencies or
instrumentalities, or 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.

Non-Fundamental Investment Policy on Calculating Concentration

For purposes of calculating concentration of investments in the
utility and finance categories, each Fund will operate under the following
non-fundamental investment policy, which will be implemented where appropriate:

Neither finance companies as a group nor utility companies as a group
are considered a single industry for purposes of a Fund's
concentration policy (i.e., finance companies will be considered a
part of the industry they finance and utilities will be divided
according to the types of services they provide).

Item 4c - Joint trading accounts

The Board of Trustees is recommending that the fundamental investment
restriction on joint trading accounts be eliminated for the following Funds:

Balanced Limited Term Income
Diversified Stock Ohio Municipal Bond
Established Value Prime Obligations
Growth Small Company Opportunity
Intermediate Income Special Value
International Growth Stock Index
Investment Quality Bond Tax-Free Money Market
Value

-22-
<PAGE>

This investment restriction currently reads:

The Funds may not:

participate on a joint or joint and several basis in any securities
trading account.

Reason for the change

Under the 1940 Act, the Funds are not specifically prohibited from
participating in joint trading accounts under all circumstances. However,
because participation in a joint trading account would be a joint transaction
with an affiliated person, the Funds would have to apply to the SEC for, and
receive, an exemption from the appropriate provisions of the 1940 Act. The Funds
adopted their fundamental investment restriction on joint trading accounts in
response to certain requirements imposed by state laws and regulations which are
no longer applicable.

The Funds may wish to participate in a joint trading account sometime
in the future, subject to obtaining the necessary relief from the SEC. In
addition, there is no longer any requirement that the Funds have this
restriction. Eliminating this restriction would clarify and modernize the
governing documents of the Funds by removing a clause that is no longer needed.

Item 4d - Borrowing

Currently, the Funds may borrow money for temporary or emergency
purposes only. "Temporary purposes" is not defined under the 1940 Act. However,
it is presumed that any loan repaid within 60 days and not extended is for
temporary purposes. The Funds need the ability to borrow temporarily for a
number of reasons. Sometimes they borrow money to pay redeeming shareholders
when the number or amount of redemptions exceeds available cash, and it is not a
good time to sell portfolio securities to meet redemptions. Other times, a Fund
must borrow money to pay redeeming shareholders, because the Fund has not yet
received payment for securities it has sold.

The current borrowing restriction also permits the Funds to engage in
certain types of securities transactions, including delayed-delivery,
when-issued and reverse repurchase agreements that might be construed as
borrowing transactions. (These types of transactions are described fully in the
Statement of Additional Information.)

The Funds would benefit from the ability to engage in other types of
transactions which might be considered borrowing. In particular, it might be
appropriate and advantageous to enter into a transaction known as a "dollar
roll." A "dollar roll" transaction is a special type of reverse repurchase
agreement where the Fund sells a mortgage-backed U.S. Government security to a
financial institution with the understanding that the Fund will repurchase the
security at an agreed upon time and price. In a "dollar roll" transaction, the
financial institution must deliver the same type of security at the time of
repurchase, from the same agency with similar characteristics but, unlike in a
reverse repurchase agreement, not necessarily the original security delivered by
the Fund. "Dollar rolls" are considered to be borrowings by the Fund and provide
an economical way for the Fund to obtain cash.

In addition, the Funds would benefit from the flexibility to borrow
money up to the maximum amount permitted by law and not just for the limited
time period covered by a temporary borrowing. The Funds do not intend to borrow
for leveraging purposes, which means that a Fund will not borrow to make
investments with the proceeds of the borrowing.

-23-
<PAGE>

Finally, it may be appropriate at times for the Funds to borrow from
each other. In order for the Funds to engage in this type of borrowing, they
would first have to apply to the SEC for, and receive, an exemption from certain
provisions of the 1940 Act.

Borrowing money may place a Fund at risk and therefore, although some
additional borrowing would be permitted under this restriction, it would be
limited (as required under the 1940 Act) to 33 1/3% of the total assets of a
Fund at the time the loan is made. In addition, the Board of Trustees will add a
non-fundamental borrowing restriction that a Fund will not borrow money for
leveraging purposes.

Reasons for the change

For each Fund, the proposed amendment clarifies, modernizes and
standardizes the restriction on borrowing. This change gives each Fund the
flexibility to engage in certain securities transactions, such as "dollar
rolls," that might be construed as "borrowing" transactions, and permits each
Fund to borrow money up to the limits permitted by the 1940 Act for any purpose
that does not involve leveraging. Changing this restriction will permit greater
flexibility in managing each Fund's portfolio and will allow each Fund to borrow
to the maximum extent permitted by law when such borrowings are necessary for
the efficient management of each Fund's assets.

The proposed changes also would allow a Fund to borrow from another
Fund when permissible. Borrowing from another Fund in the Trust could reduce
certain borrowing and transaction costs.

Proposed Borrowing Restriction

No Fund may:

borrow money, except that a Fund may (a) enter into commitments to
purchase securities and instruments in accordance with its investment
program, including when-issued and delayed-delivery transactions,
reverse repurchase agreements and "dollar roll" transactions,
provided that the total amount of any borrowing does not exceed 33
1/3% of the Fund's total assets at the time of the transaction; (b)
borrow money in an amount not to exceed 33 1/3% of the value of its
total assets at the time the loan is made; and (c) borrow money on a
short-term basis from investment companies that are part of the same
group of investment companies to the extent allowed by applicable
laws, rules or regulatory orders in an amount not to exceed 33 1/3%
of the value of its total assets at the time the loan is made.
Borrowings representing more than 33 1/3% of a Fund's total assets
must be repaid before the Fund may make additional investments.

Non-fundamental investment policy on borrowing for leverage:

The Funds of the Trust do not intend to borrow money for leveraging
purposes.

The following table states the current borrowing restriction for each Fund.

-24-
<PAGE>

- --------------------------------------------------------------------------------
Current Borrowing Restriction
- --------------------------------------------------------------------------------
Balanced The Funds may not:
Convertible Securities
Diversified Stock borrow money, except that (a) each Fund may
Growth enter into commitments to purchase
Intermediate Income securities in accordance with its
International Growth investment program, including
Investment Quality Bond delayed-delivery and when-issued securities
Lakefront and reverse repurchase agreements, provided
Limited Term Income that the total amount of any such borrowing
New York Tax-Free does not exceed 33 1/3 % of the Fund's
Ohio Municipal Bond total assets; and (b) each Fund may borrow
Prime Obligations money for temporary or emergency purposes
Real Estate Investment in an amount not exceeding 5% of the value
Small Company Opportunity of its total assets at the time when the
Special Value loan is made. Any borrowings representing
Stock Index more than 5% of a Fund's total assets must
Tax-Free Money Market be repaid before the Fund may make
U.S. Government Obligations additional investments.
Value

Established Value The Established Value Fund will not borrow
money, except as a temporary measure for
extraordinary or emergency purposes, and
then only in amounts not exceeding 5% of
the total assets of the Fund, taken at the
lower of acquisition cost or market value.

Federal Money Market No current restriction.

Financial Reserves The Funds may not:
Institutional Money Market
LifeChoice borrow money, except (a) from a bank for
temporary or emergency purposes (not for
leveraging or investment) or (b) by engaging
in reverse repurchase agreements, provided
that (a) and (b) in combination
("borrowings") do not exceed an amount equal
to one third of the current value of its
total assets (including the amount borrowed)
less liabilities (not including the amount
borrowed) at the time the borrowing is made.
This fundamental limitation is construed in
conformity with the 1940 Act, and if at any
time Fund borrowings exceed an amount equal
to 33 1/3 of the current value of the Fund's
total assets (including the amount borrowed)
less liabilities (other than borrowings) at
the time the borrowing is made due to a
decline in net assets, such borrowings will
be reduced within three days (not including
Sundays and holidays) to the extent
necessary to comply with the 33 1/3%
limitation.

Fund for Income The Fund may not:

borrow money, except for temporary or
emergency purposes and not for investment
purposes, and then only in an amount not
exceeding 5% of the value of its total
assets at the time of the borrowing.

Gradison Government Reserves The Gradison Government Reserves Fund will
not borrow money, except from banks as a
temporary measure or for extraordinary or
emergency purposes such as to enable the
Fund to satisfy redemption requests where
liquidation of portfolio securities is
considered disadvantageous, and not for
leverage purposes, and then only in amounts
not exceeding 15% of the total assets of the
Fund at the time of the borrowing. While any
borrowing of greater than 5% of the assets
is outstanding, the Fund will not purchase
additional portfolio securities.

-25-
<PAGE>

borrow money, except that the Fund may
borrow money from banks for temporary or
emergency purposes (not for leveraging or
investment) and engage in reverse repurchase
agreements in an amount not exceeding 33
1/3% of the value of its total assets
(including the amount borrowed) less
liabilities (other than borrowings). Any
borrowings that come to exceed this amount
will be reduced within three days (exclusive
of Sundays and holidays) to the extent
necessary to comply with the 33 1/3%
limitation.

Ohio Municipal Money Market The Fund may:

(a) borrow money and engage in reverse
repurchase agreements in amounts up to
one-third of the value of the Fund's net
assets including the amounts borrowed, and
(b) purchase securities on a when-issued or
delayed delivery basis. The Fund will not
borrow money or engage in reverse repurchase
agreements for investment leverage, but
rather as a temporary, extraordinary, or
emergency measure or to facilitate
management of the Fund by enabling the Fund
to meet redemption requests when the
liquidation of Fund securities would be
inconvenient or disadvantageous. The Fund
will not purchase any securities while any
such borrowings (including reverse
repurchase agreements) are outstanding.
- --------------------------------------------------------------------------------

Non-fundamental investment restriction - Federal Money Market only

The Trustees for the Federal Money Market Fund have adopted the
following non-fundamental investment restriction:

The Federal Money Market Fund will not borrow money.

Item 4e - Lending

The Board of Trustees is proposing that each Fund's (except Federal
Money Market Fund) lending restriction be updated to clarify that the Funds may
lend their portfolio securities and engage in certain types of securities
transactions that might be construed as "lending" transactions. The proposed
revisions also add language to allow the Funds to engage in "interfund" lending
of cash, when it is permissible and desirable to do so. The Trust would need to
obtain an exemptive order from the SEC to engage in interfund lending. No
application for such an order has been made, but the Trust may make such an
application in the future if this proposal is approved.

Some Funds are currently lending their portfolio securities as part
of a securities lending program. Funds can generate income from lending
portfolio securities, although there are risks involved. However, the Board of
Trustees requires that there be procedures in place to ensure that borrowers of
securities are creditworthy and that the loans are fully collateralized.

Reason for the change

This change will clarify that the Funds may lend their portfolio
securities to generate income within the limits of the 1940 Act where desirable
and appropriate in accordance with their investment objectives. In addition, the
Funds will be able to engage in transactions which may be considered lending,
but which could be beneficial to the management of the portfolio.

Considered together, items 4d and 4e permit the Funds to engage in
interfund cash lending when desirable and when permitted by the appropriate
regulatory authority. Interfund cash lending is beneficial

-26-
<PAGE>

to shareholders because it would permit the Funds to match lending and borrowing
needs and reduce costs associated with lending and borrowing, with virtually no
increase in risk. Funds would earn interest on money lent.

Proposed Lending Restriction -- All Funds (except Federal Money Market Fund)

The Funds may not:

make loans, a Fund, consistent with its investment
program, may (a) purchase bonds, debentures, other debt securities
and hybrid instruments, including short-term obligations; (b) enter
into repurchase transactions; (c) lend portfolio securities, provided
that the value of loaned securities does not exceed 33 1/3% of the
Fund's total assets; and (d) make short-term loans to other
investment companies that are part of the same group of investment
companies, as part of an interfund loan program, as allowed by
applicable laws, rules and regulatory orders.

The following table states the current lending restriction for each Fund:

- --------------------------------------------------------------------------------
Current Restriction
- --------------------------------------------------------------------------------
Balanced The Funds may not:
Diversified Stock
Growth lend any security or make any other loan if,
Intermediate Income as a result, more than 33 1/3% of its total
International Growth assets would be lent to other parties, but
Investment Quality Bond this limitation does not apply to purchases
Lakefront of publicly issued debt securities or to
Limited Term Income repurchase agreements.
National Municipal Bond
Ohio Municipal Bond
Prime Obligations
Real Estate Investment
Small Company Opportunity
Special Value
Stock Index
Tax-Free Money Market
U.S. Government Obligations
Value

Established Value The Fund will not:

make loans, except (a) through the purchase
of publicly distributed corporate
securities, U.S. Government obligations,
certificates of deposit, high-grade
commercial paper and other money market
instruments, and (b) loans of portfolio
securities to persons unaffiliated with the
Trust not in excess of 20% of the value of
the Fund's total assets (taken at market
value) made in accordance with the
guidelines of the SEC and with any standards
established from time to time by the Trust's
Board of Trustees, including the maintenance
of collateral from the borrower at all times
in an amount at least equal to the current
market value of the securities loaned.

Financial Reserves The Funds may not:
Institutional Money Market make loans to other persons, except (a) by
the purchase of debt obligations in which
the Fund is authorized to invest in
accordance with its investment objective,
and (b) by engaging in repurchase
agreements. In addition, each Fund may lend
its portfolio securities to broker-dealers
or other institutional investors, provided
that the borrower delivers cash or cash
equivalents as collateral to the Fund and
agrees to maintain such collateral so that
it equals at least 100% of the value of the
securities loaned. Any such securities loan
may not be made if, as a result thereof, the
aggregate value of all securities loaned
exceeds 33 1/3% of the total assets of the
Fund.

Fund for Income The Fund may not:

make loans to other persons except through
the use of repurchase agreements or the
purchase of commercial paper. For these
purposes, the purchase of a portion of an
issue of debt

-27-
<PAGE>

Gradison Government Reserves The Fund will not:

make loans, except that the purchase of debt
securities as allowed by the Fund's
investment objective and other investment
restrictions, entering into repurchase
agreements, and the lending of portfolio
securities in an amount not to exceed 30% of
the value of its total assets with the
collateral value of loaned securities
marked-to-market daily and in accordance
with applicable regulations or guidelines
established by the Securities and Exchange
Commission (the "SEC") shall not be
prohibited by this restriction.

New York Tax-Free The Fund may not:

make loans to other persons except through
the use of repurchase agreements, the
purchase of commercial paper or by lending
portfolio securities. For these purposes,
the purchase of a portion of an issue of
debt securities which is part of an issue to
the public shall not be considered the
making of a loan.

Convertible Securities The Funds may not:
lend any cash except in connection with the
acquisition of a portion of an issue of
publicly distributed bonds, debentures,
notes or other evidences of indebtedness or
in connection with the purchase of
securities subject to repurchase agreements,
except as outlined under "Additional
Information on Fund Investments" and the
sub-section, "Securities Lending." The Funds
will not lend other assets except as a
special investment method. See "Investment
Objectives and Policies" herein and
"Investment Objectives" in the Prospectus.
The Funds may not make a loan of its
portfolio securities if, immediately
thereafter and as a result thereof,
portfolio securities with a market value of
10% or more of the total assets of the Funds
would be subject to such loans.

Ohio Municipal Money Market The Fund will not:

lend any of its assets, except through the
purchase of a position of publicly
distributed debt instruments or repurchase
agreements and through the lending of its
portfolio securities. The Fund may lend its
securities if collateral values are
continuously maintained at no less than 100%
of the current market value of such
securities by marking to market daily.

LifeChoice Funds The Funds may not:

lend any security or make any other loan if,
as a result, more than 33-1/3% of a Fund's
total assets would be lent to other parties,
except that a Fund may invest in Underlying
Portfolios that lend portfolio securities
consistent with their investment objectives
and policies, but this limitation does not
apply to purchases of publicly issued debt
securities or to repurchase agreements.

- --------------------------------------------------------------------------------

Non-fundamental policy on lending portfolio securities:

The Trustees for Fund for Income have adopted the following
non-fundamental investment restriction:

The Fund will not lend any of its portfolio securities.

Item 4f - Senior securities

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<PAGE>

The Board of Trustees recommends that the restriction on issuing
senior securities applicable to all Funds except the Convertible Securities,
Established Value and Federal Money Market Funds be amended to read as follows:

Proposed Senior Securities Restriction

The Funds may not:

issue any senior security (as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), except that (a) a Fund may
engage in transactions that may result in the issuance of senior
securities to the extent permitted under applicable regulations and
interpretations of the 1940 Act, an exemptive order or interpretation
of the staff of the Securities and Exchange Commission (the "SEC");
(b) a Fund may acquire other securities, the acquisition of which may
result in the issuance of a senior security, to the extent permitted
under applicable regulations or interpretations of the 1940 Act; (c)
subject to the restrictions described in the Statement of Additional
Information, a Fund may borrow money as authorized by the 1940 Act;
and (d) a Fund may issue multiple classes of shares in accordance
with regulations of the SEC.

Reason for the change

Under the 1940 Act, an open-end investment company is not permitted
to issue senior securities, except under certain limited conditions. The
restriction makes clear that there are circumstances under which a Fund may
issue a senior security. The proposed amendment clarifies and modernizes the
language concerning senior securities to make it consistent with permitted
activities approved by the SEC, such as a Fund issuing multiple classes of
shares. The amendment ensures that all currently permitted activities are
enumerated so that the Fund has the greatest operating flexibility. This change
will have no immediate impact any Fund's investment strategies.

-29-
<PAGE>

The following table states the current senior securities restriction for each
Fund.

- --------------------------------------------------------------------------------
Current Restriction
- --------------------------------------------------------------------------------
All Funds except Established No Fund may:
Value, Gradison Government
Reserves, Convertible Securities issue any senior security (as defined in the
and Federal Money Market 1940 Act), except that (a) each Fund may
engage in transactions that may result in
the issuance of senior securities to the
extent permitted under applicable
regulations and interpretations of the 1940
Act or an exemptive order; (b) each Fund may
acquire other securities, the acquisition of
which may result in the issuance of a senior
security, to the extent permitted under
applicable regulations or interpretations of
the 1940 Act; (c) subject to the
restrictions set forth below, the Fund may
borrow money as authorized by the 1940 Act.

Gradison Government Reserves The Fund will not:

issue senior securities as defined in the
1940 Act, except to the extent that such
issuance might be involved with respect to
borrowings subject to fundamental
restriction no. 3 below or with respect to
transactions involving futures contracts or
the writing of options and provided that the
Trust may issue shares of additional series
or classes that the Trustees may establish.

Convertible Securities No current restriction.
Established Value
Federal Money Market
- --------------------------------------------------------------------------------

The Board of Trustees also recommends that the amended senior
securities restriction described above be adopted by the Convertible Securities,
Established Value and Federal Money Market Funds.

Reasons for the change

These three Funds currently have no separately stated restriction
regarding senior securities. In order to ensure that the Funds can engage in all
permitted activities consistent with the law, and in order to make clear that
with respect to senior securities, there is no intention to treat these Funds
differently from all the other Funds in the Trust, the restriction related to
issuing senior securities should be added to these Funds.

Item 4g - Real estate

The Board of Trustees recommends that the restriction regarding real
estate be amended for all funds except Fund for Income and New York Tax-Free
Fund (which currently has no restriction) and adopted for Fund for Income and
New York Tax-Free Fund to permit all Funds to invest in real estate-related
investments, if appropriate and desirable. The amended restriction reads as
follows:

Proposed Real Estate Restriction

The Funds may not:

purchase or sell real estate unless acquired as a result of direct
ownership of securities or other instruments. This restriction 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, including real estate investment trusts. This
restriction does not preclude a Fund from buying securities backed by
mortgages on real estate or securities of companies engaged in such
activities. This restriction shall not prevent a Fund from investing
in real estate operating companies and shares of companies engaged in
other real estate related businesses.

-30-
<PAGE>

Reasons for the change

The proposed change conforms the restriction on investing in real
estate to current interpretations of the 1940 Act. This change modernizes the
present restriction by allowing a Fund to invest in certain newer financial
instruments that were precluded under the prior restriction, when that type of
investment is consistent with the Fund's investment objectives and policies.

The following table states the current restriction for each Fund.

- --------------------------------------------------------------------------------
Current Restriction
- --------------------------------------------------------------------------------
Balanced The Funds may not:
Diversified Stock
Growth purchase or sell real estate unless acquired
Intermediate Income as a result of ownership of securities or
International Growth other instruments (but this shall not
Investment Quality Bond prevent each Fund from investing in
Lakefront securities or other instruments backed by
LifeChoice real estate or securities of companies
Limited Term Income engaged in the real estate business).
Ohio Municipal Bond Investments by the Funds in securities
Prime Obligations backed by mortgages on real estate or in
Small Company Opportunity marketable securities of companies engaged
Special Value in such activities are not hereby precluded.
Stock Index
Tax-Free Money Market
Value

Convertible Securities The Funds may not:
Federal Money Market purchase or hold any real estate, including
real estate limited partnerships, except
that the Funds may invest in securities
secured by real estate or interests therein
or issued by persons which deal in real
estate or interests therein.

Established Value The Fund will not:

purchase or sell real estate, except that it
is permissible to purchase securities
secured by real estate or real estate
interests or issued by companies that invest
in real estate or real estate interests.

Financial Reserves The Fund may not:

buy or sell real estate, commodities, or
commodity (futures) contracts.

Gradison Government Reserves The Fund will not:

purchase or sell real estate. The purchase
of securities secured by real estate which
are otherwise allowed by the Fund's
investment objective and other investment
restrictions shall not be prohibited by this
restriction.

Institutional Money Market The Fund may not:

buy or sell real estate, commodities, or
commodity (futures) contracts or invest in
oil, gas or other mineral exploration or
development programs.

National Municipal Bond The Fund may not:

purchase or sell real estate unless acquired
as a result of ownership of securities or
other instruments (but this shall not
prevent each Fund from investing in
securities or other instruments backed by
real estate or securities of companies
engaged in the real estate business).

Ohio Municipal Money Market The Fund will not:

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<PAGE>

- --------------------------------------------------------------------------------
Current Restriction
- --------------------------------------------------------------------------------
purchase or sell real estate, although it
may invest in Ohio Municipal Securities
secured by real estate or interests in real
estate.

Real Estate Investment The Fund may not:

purchase or sell real estate, except that
the Fund may purchase securities issued by
companies in the real estate industry and
will, as a matter of fundamental policy,
concentrate its investments in such
securities.

U.S. Government Obligations The Fund may not:

purchase or sell real estate unless acquired
as a result of ownership of securities or
other instruments.
- --------------------------------------------------------------------------------
Commodities and commodity (futures) contracts. Some of the current
restrictions stated above combine real estate with commodities and commodity
contracts. Should shareholders approve the proposed restriction regarding real
estate, the reference to real estate in the current restriction would be
removed, and the remainder of the current restriction relating to commodities
and commodity contract would be stated as a separate restriction.

Real Estate Investment Fund. Although the restriction relating to the
Real Estate Investment Fund would be amended, as a matter of fundamental policy,
the Fund intends to continue to concentrate its investments in the real estate
industry. (See Item 4b above.)

Item 4h - Underwriting

The Board of Trustees proposes that all Funds revise the restriction
relating to underwriting to read as follows:

Proposed Underwriting Restriction

The Funds may not:

underwrite securities issued by others, except to the extent that a
Fund may be considered an underwriter within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), when
reselling securities held in its own portfolio.

Reason for the change

The proposed change would modernize and clarify each Fund's
restriction on underwriting by stating it more succinctly. Under the proposed
restriction, a Fund would not be prohibited from selling any security in its
portfolio merely because the selling Fund might technically be deemed to be an
underwriter under the Securities Act. This change would give the Fund more
flexibility in disposing of securities that might not necessarily be considered
restricted securities but where the Fund might still be considered an
underwriter should it sell that security.

The proposed change in this investment restriction would not
substantively alter any Fund's investment strategy.

The following table reflects the current restriction for the each Fund.

- --------------------------------------------------------------------------------
Current Restriction
- --------------------------------------------------------------------------------
All Funds, except Established The Funds may not:
Value and Gradison Government
Reserves underwrite securities issued by others,
except to the extent that a Fund (or, with
respect to the LifeChoice Funds, an
Underlying Portfolio) may be

-32-
<PAGE>

considered an underwriter within the meaning
of the Securities Act of 1933, as amended
(the "Securities Act"), in the disposition
of restricted securities.

Established Value The Fund will not:

underwrite the securities of other issuers,
except insofar as the Trust may technically
be deemed an underwriter under the
Securities Act in connection with the
disposition of portfolio securities.

Gradison Government Reserves The Fund will not

underwrite the securities of other issuers,
except insofar as the Fund may technically
be deemed an underwriter under the
Securities Act of 1933, as amended (the
"Securities Act"), in connection with the
disposition of portfolio securities.
- --------------------------------------------------------------------------------

LifeChoice Funds. The proposed restriction on underwriting for the
LifeChoice Funds will continue to contain the statement: "(or, with respect to
the LifeChoice Funds, an Underlying Portfolio)."

Item 4i - Pledging - Established Value Fund and Fund for Income only

The Board of Trustees proposes to eliminate these Funds' fundamental
investment restrictions on pledging assets for security.

The following table states the current restriction for each Fund.

- --------------------------------------------------------------------------------
Current Restriction - Established Value Current Restriction - Fund for Income
- --------------------------------------------------------------------------------
The Established Value Fund will not: The Fund for Income may not:

mortgage, pledge or hypothecate pledge, mortgage, or hypothecate its
securities, except in connection assets, except that, to secure
with a permissible borrowing as borrowings permitted by its
set forth in fundamental investment fundamental restriction on borrowing,
restriction no. 2 above, and then it of may pledge securities having a
only in amounts not exceeding 10% of market value at the time of pledge
the value the assets of a Fund (taken not exceeding 10% of the value of its
at the lower of acquisition cost or total assets.
market).

Reasons for the change

The restriction on pledging and hypothecating assets was based on
state law requirements that are no longer applicable. Removing this restriction
will give each of these Funds greater flexibility by permitting management to
make changes in investment policy regarding pledging or mortgaging assets
without seeking shareholder approval. In addition, removing this restriction
would afford these Funds greater flexibility in permitted borrowing
transactions, because bank lenders often require a pledge of assets as security
for loans. Eliminating this restriction now would not affect these Funds'
present investment practices.

4j - Investing to influence management or exercise control -- Convertible
Securities, Established Value and Federal Money Market only

The Board of Trustees proposes to eliminate the restriction relating
to investing to influence management or exercise control with respect to the
Convertible Securities, Established Value and Federal Money Market Funds.

The following table states the current restriction for each Fund.

-33-
<PAGE>

- --------------------------------------------------------------------------------
Current Restriction - Convertible Current Restriction -
Securities and Federal Money Market Established Value
- --------------------------------------------------------------------------------

The Funds may not: The Fund will not:

invest in companies for the purpose invest in companies for the purpose
of influencing management or of exercising control or management.
exercising control, and will not
purchase more than 10% of the voting
securities of any one issuer. This
will not preclude the management
of the Funds from voting proxies in
their discretion.
- --------------------------------------------------------------------------------

Reasons for the change

The restriction on investing to influence management or exercise
control was originally adopted to ensure that investment companies not acquire
more than 10% of the outstanding voting securities of a single issuer. Since
both the Convertible Securities Fund and the Federal Money Market Fund invest
most, if not all, of their assets in debt securities, this restriction is
unnecessary. The owners of debt securities have no voting rights. Therefore, it
is impossible for the Funds to carry out their investment strategies and also
invest for the purpose of influencing management and exercising control.

For the Established Value Fund, the restriction came from state law
requirements that are no longer applicable. Because the Established Value Fund
invests primarily in companies that have a minimum market capitalization of $1
billion, and because it is diversified, it is unlikely that the Established
Value Fund could invest for the purpose of influencing management or exercising
control.

4k - Purchasing on margin and selling short - Convertible Securities,
Established Value and Federal Money Market only

The Board of Trustees proposes to eliminate the restriction relating
to purchasing on margin and short selling for the Convertible Securities,
Established Value and Federal Money Market Funds.

The following table states the current restriction for each Fund.

purchase securities on margin make short sales of securities, or
or sell securities short. purchase securities on margin,
except for short-term credit as is
necessary for the clearance of
transactions.
- --------------------------------------------------------------------------------

Reasons for the change

The practices of purchasing securities on margin and selling
securities short when a Fund does not own the security create the issuance of a
senior security. Open-end investment portfolios such as the Funds are by law not
permitted to issue senior securities except under very limited circumstances.
Therefore, there is no need for the Funds to have a restriction on purchasing on
margin or selling short since these activities are controlled by statutory
requirements and other restrictions adopted by the Funds.

Eliminating this restriction would not affect any Fund's present
investment strategies.

-34-
<PAGE>

4l - Illiquid and restricted securities - Convertible Securities and Established
Value only

The Board of Trustees proposes to amend and re-classify from
fundamental to non-fundamental the restrictions relating to illiquid and
restricted securities for the Convertible Securities and Established Value Funds
to read as follows:

Proposed non-fundamental illiquid and restricted securities restriction

The Funds may not:

invest more than 15% of any of the Fund's net assets in (i)
securities restricted as to disposition under the Federal securities
laws, except such restricted securities determined by the Funds'
investment adviser to be liquid based on the trading markets for the
particular security and other factors, (ii) securities as to which
there are no readily available market quotations, or (iii) repurchase
agreements with a maturity in excess of seven days.

The following table states the current illiquid securities restriction for each
Fund.

invest more than 15% of any of the
Convertible Securities Fund's net
assets or more than 10% of the
Federal Money Market Fund's net
assets in (i) securities restricted
as to disposition under the Federal
securities laws, (ii) securities as
to which there are no readily
available market quotations, or
(iii) repurchase agreements with a
maturity in excess of 7 days.

Established Value The Fund will not:

purchase securities subject to
restrictions on disposition under
the Securities Act.

and

purchase securities for which no
readily available market quotation
exists, if at the time of
acquisition more than 5% of the
total assets of the Fund would be
invested in such securities
(repurchase agreements maturing in
more than seven days are included
within this restriction).
- --------------------------------------------------------------------------------

Reasons for the changes

Illiquid securities are securities that cannot be sold by the Funds
within seven days at a price approximately equal to the price used in
determining the Fund's net asset value. Securities that are restricted as to
resale under the Federal securities laws are generally considered illiquid.
However, the staff of the SEC has indicated that where restricted securities can
be determined to be liquid based on criteria established by an investment
company's board of directors, those securities can be treated as liquid for
purposes of the investment company's investment restrictions. There are
currently numerous securities that are restricted as to resale but for which
markets have developed which make them highly liquid. The Board of Trustees is
proposing that the illiquid securities restriction for each Fund be amended to
permit these very liquid, though restricted, securities to be purchased without
including them in the percentage limitation applicable to illiquid securities.

-35-
<PAGE>

In addition, at one time, regulators required investment companies to
state their policy regarding illiquid securities as a fundamental limitation.
That requirement no longer exists, and there is no statutory requirement that
this restriction be fundamental.

Making the restriction on illiquid securities non-fundamental would
give the Board of Trustees more flexibility in responding to changing regulatory
requirements. As an example, a number of years ago, the SEC permitted non-money
market funds to increase the percentage of their assets that could be invested
in illiquid securities from 10% to 15%. Should the SEC change its policy again,
or should market conditions permit a change in this policy, it would be
advantageous to the Funds to have the Board of Trustees make the change without
incurring the cost of a shareholders meeting.

Neither the change in the restriction nor the change in the
classification of the restriction would impact the investment practices or
strategies of either Fund.

4m - Investment in issuers whose shares are owned by Victory's Trustees or
Officers -- Established Value only

The Board of Trustees proposes to eliminate the restriction which
prohibits the Fund from owning the securities of an issuer when a Trustee or
Officer of the Fund who is also a director or officer of that issuer owns
certain amounts of securities of that issuer.

The current restriction reads as follows:

The Established Value Fund will not purchase or retain the securities
of any issuer if any Trustee or officer of the Trust is or becomes a
director or officer of such issuer and owns beneficially more than
1/2 of 1% of the securities of such issuer, or if those directors,
trustees and officers of the Trust and its investment adviser who are
directors or officers of such issuer together own or acquire more
than 5% of the securities of such issuer.

Reason for the change

This restriction was based on state law requirements that are no
longer applicable. In addition, maintaining the restriction is not necessary,
because the conflict of interest that the restriction was probably meant to
prevent is already adequately covered under the 1940 Act. The restriction
sometimes imposes severe limitations on the operation of the portfolio and is
costly and difficult to administer. Because the restriction is no longer
necessary, the Board of Trustees recommends that it be eliminated. This action
would not change the Fund's investment strategy.

4n - Investment in unseasoned issuers - Established Value only

The Board of Trustees proposes to eliminate the restriction limiting
investments in the securities of unseasoned issuers to not more than 5% of the
assets of the Fund.

The current restriction reads as follows:

The Established Value Fund will not purchase any securities of
companies which have (with their predecessors) a record of less than three years
of continuous operation, if at the time of acquisition more than 5% of a Fund's
total assets would be invested in such securities.

Reason for the change

This is another restriction that was imposed by state laws which are
no longer applicable. Without these legal requirements, there is no longer any
need to so specifically limit the portfolio. Eliminating this restriction would
increase the flexibility the portfolio manager has over the investment of Fund
assets. However, this increase in flexibility would not change the Fund's
investment strategy.

-36-
<PAGE>

B. Required vote

Each item contained in Proposal 4 requires the approval of a majority
of each Fund's outstanding voting securities. A majority of the outstanding
voting securities means the lesser of one more than half of the number of shares
that are issued and outstanding as of the Record Date or 67% of the voting
shares present at the Special Meeting if more than 50% of the voting shares are
present at the Special Meeting in person or by proxy. You may vote in favor of,
or abstain from voting on, all of the proposed changes applicable to your Fund
or, should you wish to vote against any particular proposed change, you may so
indicate on the proxy card.

C. Has the Board of Trustees approved these proposed changes?

Yes. The Board of Trustees has considered each of these proposed
changes and has concluded that changing these restrictions now would be in the
best interests of each affected Funds' shareholders. The Board of Trustees
recommends that shareholders vote "for" the items contained in Proposal 4.

PROPOSAL 5
OTHER MATTERS

The Board of Trustees of the Trust does not know of any matters to be
presented at the Special Meeting other than those set forth in this Proxy
Statement. If any other business should come before the Special Meeting, the
persons named on the accompanying proxy card will vote thereon in accordance
with their best judgment.

PART 3: MORE ON PROXY VOTING AND SHAREHOLDER MEETINGS

General information about proxy voting

The Board of Trustees of the Trust is soliciting your proxy to vote
on the matters described in this Proxy Statement. We expect to solicit proxies
primarily by mail, but representatives of Shareholder Communications Corporation
or its affiliates or others may communicate with you by mail or by telephone or
other electronic means to discuss your vote. We will ask broker-dealers and
other institutions that hold shares for the benefit of their customers to send
the proxy materials to the beneficial owners of those shares and to obtain
authorization to vote on their behalf.

Only shareholders of record of the Funds of the Trust at the close of
business on the Record Date, January 21, 2000, may vote at the Special Meeting.
As of the Record Date, each Class of the Funds of the Trust had the number of
shares issued and outstanding listed below, each share being entitled to one
vote:

- --------------------------------------------------------------------------------
Fund Shares entitled to Vote
- --------------------------------------------------------------------------------
Balanced Fund
Class A 30,748,232
Class B 822,970
Class G 5,400
Convertible Securities Fund
Class A 6,061,659
Class G 6
Diversified Stock Fund
Class A 58,881,850
Class B 4,661,344
Class G 7,216,197
- --------------------------------------------------------------------------------

-37-
<PAGE>

- --------------------------------------------------------------------------------
Fund Shares entitled to Vote
- --------------------------------------------------------------------------------
Established Value Fund
Class A 0
Class G 14,698
Federal Money Market Fund
Investor Shares 814,969,061
Select Shares 334,411,494
Financial Reserves Fund 820,087,989
Fund for Income
Class A 3,282,353
Class G 13,164,606
Gradison Government Reserves Fund 2,269,054,063
Growth Fund
Class A 17,633,605
Class G 66,499
Institutional Money Market Fund
Investor Shares 1,677,403,980
Select Shares 1,651,386,946
Intermediate Income Fund
Class A 22,409,415
Class G 1,660
International Growth Fund
Class A 9,915,656
Class B 57,465
Class G 2,543,650
Investment Quality Bond Fund
Class A 13,670,531
Class G 3
Lakefront Fund 139,765
LifeChoice Conservative Investor Fund 631,462
LifeChoice Growth Investor Fund 1,297,365
LifeChoice Moderate Investor Fund 1,932,039
Limited Term Income Fund 4,547,221
National Municipal Bond Fund
Class A 3,516,590
Class B 220,838
Class G 4,862
New York Tax-Free Fund
Class A 1,086,147
Class B 263,401
Class G 2
Ohio Municipal Bond Fund
Class A 6,187,587
Class G 10,487,124
Ohio Municipal Money Market Fund 1,011,868,721
Prime Obligations Fund 2,140,018,189
Real Estate Investment Fund
Class A 1,424,042
Class G 291
Small Company Opportunity Fund
Class A 1,327,694

-38-
<PAGE>

- --------------------------------------------------------------------------------
Fund Shares entitled to Vote
- --------------------------------------------------------------------------------
Class G 4,593,053
Special Value Fund
Class A 15,627,830
Class B 103,223
Class G 3,777
Stock Index Fund
Class A 37,991,488
Class G 709,605
Tax-Free Money Market Fund 767,135,183
U.S. Government Obligations Fund
Investor Shares 395,174,607
Select Shares 1,802,105,680
Value Fund
Class A 35,017,375
Class G 31,496
Total Trust Shares: 14,096,969,728
- --------------------------------------------------------------------------------

As of the Record Date, the Trustees and officers of the Trust, as a
group, owned less than 1% of the outstanding shares of the Funds in the Trust.
To the best of the knowledge of the Trust, the following shareholders
beneficially owned 5% or more of the outstanding shares of the indicated classes
of Funds in the Trust as of January 21, 2000:

<TABLE>
<CAPTION>
5% Shareholders as of 01/21/00

Balanced Fund - Class A SNBOC and Company 96.53%
4900 Tiedeman Road
Cleveland, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced Fund - Class G McDonald & Co. Securities 99.95%
The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut St
Cincinnati, OH 45202
- ------------------------------------------------------------------------------------------------------------------------------------
Convertible Securities Fund - Charles Schwab & Co. 28.59%
Class A Special Custody Account #2
FOB Customers
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
- ------------------------------------------------------------------------------------------------------------------------------------
Key Trust 37.12%
Attn: Jim Osborne, OH-01-49-0330
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Norman Foundation Inc 5.15%
147 E 48th Street
New York NY 10017-1223
- ------------------------------------------------------------------------------------------------------------------------------------
Convertible Securities Fund - Boston Financial Data Services 59.48%
Class G Corp Actions Audit Acct #2
Victory Convertible Sec Class G
2 Heritage Drive
8th Floor
Quincy MA 02171-2144
- ------------------------------------------------------------------------------------------------------------------------------------
Boston Financial Data Services 29.34%
Corp Actions Audit Acct #1
Victory Convertible Sec Class G
2 Heritage Drive
8th Floor
Quincy MA 02171-2144
- ------------------------------------------------------------------------------------------------------------------------------------
BISYS Fund Services 11.18%
Attn: Fund Administration
3435 Stelzer Road
Columbus, OH 43219-6004
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Stock Fund - Class SNBOC and Company 72.88%
A Attn: Jim Osborne, OH-01-49-0330
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Stock Fund - Class McDonald & Co. Securities 98.52%
G The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut Street
Cincinnati, Ohio 45202-3110
- ------------------------------------------------------------------------------------------------------------------------------------
Established Value Fund - Class McDonald & Co. Securities 98.17%
G The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut Street
Cincinnati, OH 45202
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Money Market Fund - KeyCorp Investment Products 83.97%
Investor Class 127 Public Square
Cleveland, OH 44114-1216
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Money Market Fund - KeyCorp Investment Products 97.05%
Select Class 127 Public Square
Cleveland, OH 44114-1216
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Reserves Fund SNBOC and Company 91.03%
Attn: Jim Osborne OH-01-49-0330
4900 Tiedeman Road
Cleveland, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
KeyCorp Investment Products 6.09%
127 Public Square
Cleveland, OH 44114-1216
- ------------------------------------------------------------------------------------------------------------------------------------
Fund for Income - Class A Key Trust Cleveland 65.85%
PO Box 93971
4900 Tiedeman Road
Cleveland, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Fund for Income McDonald & Co. Securities 95.47%
Class G The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut Street
Cincinnati, Ohio 45202-3110
- ------------------------------------------------------------------------------------------------------------------------------------
Gradison Government Reserves - McDonald & Co. Securities 99.02%
Fund Class G The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut Street
Cincinnati, OH 45202
- ------------------------------------------------------------------------------------------------------------------------------------

-39-
<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Percent Owned Percent Owned
Victory Fund Name and Address of Owner of Record Beneficially
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund - Class A SNBOC and Company 89.00%
PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund - Class G McDonald & Co Securities 99.98%
c/o Gradison Division
Attn: Jeff Carter
580 Walnut St
Cincinnati, OH 45202-3110
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional Money Market KeyCorp Investment Products 6.76%
Fund - 127 Public Square
Investor Shares Cleveland, OH 44114-1216
- ------------------------------------------------------------------------------------------------------------------------------------
Liefke & Co. 73.15%
c/o KeyCorp Trust Services
PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
McDonald & Co. Securities 9.25%
The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut Street
Cincinnati, Ohio 45202-3110
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional Money Market BISYS Fund Services Ohio Inc. 94.59%
Fund - The Benefit of our Customers
Select Shares Attn: Victory Cash Control Dept. TA
3435 Stelzer Road
Columbus, OH 43219-6004
- ------------------------------------------------------------------------------------------------------------------------------------
Intermediate Income Fund - SNBOC and Company 96.85%
Class A PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Intermediate Income Fund - McDonald & Co. Securities 99.77%
Class G The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut St
Cincinnati, OH 45202-3110
- ------------------------------------------------------------------------------------------------------------------------------------
International Growth Fund - SNBOC and Company 88.87%
Class A PO Box 93971
4900 Tiedeman Road
Cleveland, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
International Growth Fund - Subash C Mahajan Keogh PS 14.81% 14.81%
Class B KeyBank C/FBO
7215 Old Oak Blvd., Suite 3104
Cleveland, Ohio 44130-3340
- ------------------------------------------------------------------------------------------------------------------------------------
Susan G. McCaskie 11.05% 11.05%
11420 Hosford Rd
Chardon, OH 44024-9684
- ------------------------------------------------------------------------------------------------------------------------------------
Jerry L Ufford IRA 5.21% 5.21%
McDonald Investments Inc. C/FBO
3303 Linden Road Suite 308
Rocky River, Ohio 44116-4105
- ------------------------------------------------------------------------------------------------------------------------------------

-40-
<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Percent Owned Percent Owned
Victory Fund Name and Address of Owner of Record Beneficially
- ------------------------------------------------------------------------------------------------------------------------------------
International Growth Fund - McDonald & Co. Securities 95.86%
Class G The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut Street
Cincinnati, Ohio 45202-3110
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Quality Bond Fund - SNBOC and Company 84.86%
Class A PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Quality Bond Fund - Susan G. McCaskie 71.10%
Class G Boston Financial Data Services
Corp Actions Audit Acct #1
Victory Investment Quality Bond G
2 Heritage Drive
8th Floor
Quincy MA 02171-21144
- ------------------------------------------------------------------------------------------------------------------------------------
BISYS Fund Services 28.90%
Attn: Fund Administration
3435 Stelzer Rd
Columbus, OH 43219-6004
- ------------------------------------------------------------------------------------------------------------------------------------
Lakefront Fund - Class A SNBOC and Company 41.37%
PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
BISYS Fund Services 26.29%
Attn: Fund Administration & Reg. Serv.
3435 Stelzer Road
Columbus, OH 43219-6004
- ------------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Pierce Fenner & Smith 22.25%
For Sole Benefit of its Customers
Attn: Fund Admin Team
4800 Deer Lake Drive East 3rd Floor
Jacksonville FL 32246-6484
- ------------------------------------------------------------------------------------------------------------------------------------
LifeChoice - Conservative SNBOC and Company 94.88%
Investor - Class A 4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
LifeChoice - SNBOC and Company 92.43%
Growth Investor - Class A 4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
CoreLink Financial Inc. 5.59%
PO Box 4054
Concord, CA 94524-4054
- ------------------------------------------------------------------------------------------------------------------------------------
LifeChoice - SNBOC and Company 93.16%
Moderate Investor - Class A 4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
CoreLink Financial Inc. 6.31%
PO Box 4054
Concord, CA 94524-4054
- ------------------------------------------------------------------------------------------------------------------------------------
Limited Term SNBOC and Company 97.47%
Income Fund - Class A PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
National Muni Bond Fund - Key Trust Cleveland 29.37%
Class A PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co 10.00%
Special Custody Acct# 2, FBO Customers
Attn: Mutual Funds Department
101 Montgomery St
San Francisco CA 94104-4122
- ------------------------------------------------------------------------------------------------------------------------------------
National Muni Bond Fund - For Robert, Geraldine and Janet Sylvester 13.97% 13.97%
Class B And GFS ND Manufacturing Co
115 Cocheco Street
Dover, NH 03820
- ------------------------------------------------------------------------------------------------------------------------------------

-41-
<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Percent Owned Percent Owned
Victory Fund Name and Address of Owner of Record Beneficially
- ------------------------------------------------------------------------------------------------------------------------------------
Samuel E Jorgensen & 5.27% 5.27%
Christine F
345 North 200 West
Logan UT 84321
- ------------------------------------------------------------------------------------------------------------------------------------
Anne C Quinn 12.51% 12.51%
42 Juniper Court
St. Marys Place
London W8 5UF England 44813
- ------------------------------------------------------------------------------------------------------------------------------------
Marden Spencer 6.45% 6.45%
958 E. Olympus Park Dr. #A102
Salt Lake City, UT 84117
- ------------------------------------------------------------------------------------------------------------------------------------
National Muni Bond Fund - McDonald & Co. Securities 99.93%
Class G The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut St
Cincinnati, OH 45202
- ------------------------------------------------------------------------------------------------------------------------------------
New York Tax-Free Key Trust Cleveland 19.11%
Fund - Class A PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
New York Tax-Free Anna Maria Desocio 8.13% 8.13%
Fund - Class B 1624 Caleb Ave.
Syracuse, NY 13206
- ------------------------------------------------------------------------------------------------------------------------------------
Richard A. Dudley 17.40% 17.40%
Margaret H. Dudley JTTEN
68 Center St.
Geneseo, NY 14454
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph M Bray 5.43% 5.43%
Mary J Bray
Mary Jo
200 Fayette Avenue
Buffalo NY 14223
- ------------------------------------------------------------------------------------------------------------------------------------
Catherine C Lieb 5.38% 5.38%
Sally L May JTTEN
19 Park Avenue
Dansville NY 14437
- ------------------------------------------------------------------------------------------------------------------------------------
New York Tax-Free Boston Financial Data Services 71.29%
Fund - Class G Corp Actions Audit Acct #2
Victory New York Tax Free G
2 Heritage Drive
8th Floor
Quincy MA 02171-2144
- ------------------------------------------------------------------------------------------------------------------------------------
BISYS Fund Services 28.71%
Attn: Fund Administration
3435 Stelzer Rd
Columbus, OH 43219-6004
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio Muni Bond Fund - SNBOC and Company 83.15%
Class A PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio Muni Bond Fund Class G McDonald & Co. Securities 98.80%
The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut Street
Cincinnati, OH 45202
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio Municipal McDonald & Co. Securities 33.11%
Money Market Fund The Exclusive Benefit of Customers
Attn: Jeff Carter
c/o Gradison Division
580 Walnut Street
Cincinnati, OH 45202
- ------------------------------------------------------------------------------------------------------------------------------------
SNBOC and Company 17.86%
PO Box 93971
4900 Tiedeman Road
Brooklyn, OH 44144-2338
- ------------------------------------------------------------------------------------------------------------------------------------
Private Banking 42.77%
c/o Society National Bank
Attn: Joe Caroscio
2025 Ontario Street
Cleveland, OH 44115-1022
- ------------------------------------------------------------------------------------------------------------------------------------

-42-
<PAGE>

-43-
<PAGE>

-44-
<PAGE>

</TABLE>

Revoking your proxy

Even if you sign and return the accompanying proxy card, you may
revoke your proxy by writing to the Secretary of the Trust prior to the Special
Meeting, by delivering a subsequently dated proxy, or by attending and voting at
the Special Meeting in person. In addition to the solicitation of proxies by
mail, the Trust may use the services of officers and employees of the Trust,
KAM, and BISYS Fund Services, the Funds' distributor and administrator (none of
whom receive any compensation for that service), to solicit proxies by
telephone, telegraph and personal interview, and may also provide shareholders
with a procedure for recording their votes by telegraph, facsimile, telephone or
other electronic means. In addition, the Trust will employ Shareholder
Communications Corporation to solicit proxies, for which it expects to pay proxy
solicitation fees of approximately $320,000.00. Shareholders may also vote by
internet at www.proxyvote.com by following the instructions on the enclosed
proxy card. You may also access this site by selecting "Vote Your Proxy Here" on
our web site, www.victoryfunds.com

This proxy solicitation is made by and on behalf of the Board of
Trustees of the Trust. The Trust will pay the costs of proxy solicitation, which
consists of printing, handling and mailing of the proxies and related materials.
The Trust may request brokers, custodians, nominees and fiduciaries to forward
proxy materials to the beneficial owners of shares. Persons holding shares as
nominees will, upon request, be reimbursed by the Trust for their reasonable
expenses incurred in sending soliciting material to their principals.

One-third of the outstanding shares of the Trust must be present at
the special meeting in person or by proxy in order for the Trust to conduct
business at the meeting. For proposal 3, which is considered by each class
separately, one-third of the outstanding shares of each class must be present in
person or by proxy to constitute a quorum as to that proposal. If a proxy
represents a broker "non-vote" (that is, a proxy from a broker or nominee
indicating that such person has not received instructions from the beneficial
owner or other person entitled to vote shares on a particular matter with
respect to which the broker or nominee does not have discretionary power) or if
a proxy is marked with an abstention, the shares represented thereby will be
considered to be present at the meeting for purposes of determining the
existence of a quorum for the transaction of business. Broker non-votes will
have no effect in the determination of proposals 1 and 2, but will have the
effect of a vote against proposals 3 and 4.

Voting information and discretion of the persons named as proxies

While the Special Meeting is called to act upon any other business
that may properly come before it, as of the date of this Proxy Statement, the
only business which management intends to present or knows that others will
present is the business mentioned in the Notice of Special Meeting. If any other
matters lawfully come before the Special Meeting, and in all procedural matters
at the Special Meeting, the persons named as proxies (or their substitutes) will
vote in accordance with their best business judgment.

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<PAGE>

At the time any session of the Special Meeting is called to order, if
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 Special Meeting to a
later date. In the event that a quorum is present but sufficient votes in favor
of the proposal have not been received, the persons named as proxies may propose
one or more adjournments of the Special Meeting to permit further solicitation
of proxies with respect to the 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 Special Meeting to be adjourned. In such event, the persons
named as proxies will vote those proxies which they are entitled to vote in
favor of the proposal, in favor of such an adjournment, and will vote those
proxies required to be voted against the proposal, against any such adjournment.
Any adjourned session or sessions may be held within a reasonable period after
the date set for the original Special Meeting without the necessity of further
notice.

Administrator and Distributor

BISYS Fund Services of Ohio, Inc., 3435 Stelzer Road, Columbus,
Ohio 43219, serves as the Administrator of the Funds. BISYS Fund Services,
Limited Partnership, serves as the Distributor of the Funds' shares.

Investment Adviser and Sub-Administrator

Key Asset Management Inc. ("KAM"), 127 Public Square, Cleveland, Ohio
44114, serves as Investment Adviser and sub-administrator of the Funds.

Submission of proposals for the next annual meeting

Under the Trust's Trust Instrument and By-Laws, annual meetings of
shareholders are not required to be held unless necessary under the 1940 Act.
Therefore, the Trust 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 Trust at 3435 Stelzer Road, Columbus, Ohio 43219-3035, and
must be received by the Trust 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.

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.

PART 4: FUND INFORMATION

The Trust is an open-end management investment company. The Trust
consists of 38 Funds, including six common trust funds, each issuing units of
beneficial interest ("shares"). The following Funds have non-diversified
portfolios: Ohio Municipal Bond Fund, National Municipal Bond Fund, New York
Tax-Free Fund and Real Estate Investment Fund. All other Funds have diversified
portfolios.

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<PAGE>

The Victory Portfolios, generally

The Trust is a business trust established under Delaware law. The
operations of the Trust are governed by a Trust Instrument dated December 5,
1995, as amended October 2, 1997.

Each Victory Fund is a separate series of the Trust and, as such, has
similar rights under the Trust Instrument and applicable Delaware law. You
should be aware of the following features of the Victory Funds:

o Shares of each class of the Victory Funds participate equally in
dividends and other distributions attributable to that class,
including any distributions in the event of a liquidation.

o Each share of each Victory Fund is entitled to one vote for all
purposes.

o Shares of all series of the Trust vote for the election of
Trustees and on any other matter that affects each Victory Fund in
substantially the same manner, except as otherwise required by
law.

o As to matters that affect each Fund differently, such as approval
of an investment advisory agreement, shares of each series vote as
a separate series.

o On matters that affect the classes of a series differently, shares
of each class vote separately.

o Delaware law does not require registered investment companies,
such as the Trust or its series, to hold annual meetings of
shareholders and it is anticipated that shareholder meetings will
be held only when specifically required by federal or state law.

o Shareholders have available certain procedures for the removal of
Trustees.

o The Trust indemnifies Trustees and officers to the fullest extent
permitted under federal and Delaware law.

Financial Statements. PricewaterhouseCoopers LLP, independent auditors of the
Victory Funds, has audited each Fund's financial statements for the year ended
October 31, 1999, and those financial statements are incorporated by reference
in the Trust's Statement of Additional Information dated December 15, 1999.

PART 5: TRUSTEE AND OFFICER INFORMATION

Board of Trustees

Overall responsibility for management of the Trust rests with the
Trustees, who are elected by the shareholders of the Trust. The Trust is managed
by the Trustees in accordance with the laws of the State of Delaware. There are
currently seven Trustees, five of whom are Independent Trustees. The Trustees,
in turn, elect the officers of the Trust to supervise actively its day-to-day
operations. There are also three Advisory Trustees who attend meetings and serve
on committees but do not vote. Two of the Advisory Trustees are Independent
Trustees. Information about the Trustees and Advisory Trustees, including their

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<PAGE>

ages, addresses and principal occupations during the past five years, is set
forth in proposal 2, at pages 6 to 7 of this Proxy Statement.

Officers

The officers of the Trust, their ages, and principal occupations
during the past five years, are as follows:

Position(s) with Principal Occupation
Name and Age the Trust During Past 5 Years
- ------------ ---------------- --------------------
Roger Noall, 64 Chairman See biographical information
under "Board of Trustees" in
Proposal 1.

Leigh A. Wilson, 54 President and See biographical information
Trustee under "Board of Trustees" in
Proposal 1.

William B. Blundin, 60+ Vice President Senior Vice President of
BISYS; officer of other
investment companies
administered by BISYS.

J. David Huber, 53 Vice President Managing Director, BISYS;
officer of BISYS since June
1987.

Robert D. Hingston, 47 Secretary Since November 1998, Vice
President of BISYS; from
January 1995 to October 1998,
founder and principal of RDH
Associates (mutual fund
management consulting firm);
from June 1980 to January
1995, Vice President of
Investors Bank & Trust
Company.

Joel B. Engle, 34 Treasurer Since September 1998, Vice
President of BISYS; from March
1995 to September 1998, Vice
President, Northern Trust
Company; from July 1994 to
February 1995, General
Accountant, Wanger Asset
Management; from September
1988 to June 1994, Audit
Manager with Ernst & Young
LLP.

Gary Tenkman, 29 Assistant Since April 1998, Financial
Treasurer Services Director for BISYS;
from August 1997 to March
1998, Audit Manager, Ernst &
Young LLP; from August 1994 to
July 1997, Audit Senior, Ernst
& Young LLP; from July 1993 to
July 1994, Audit Staff, Ernst
& Young LLP.

Jay Baris, 45 Assistant Since September 1994, Partner,
Secretary Kramer Levin Naftalis &
Frankel LLP.

Richard Baxt, 46 Assistant Since March 1996, Senior Vice
Secretary President of BISYS; from March
1994 to March 1996, President
of First Fidelity Brokers;
from June 1984 to March 1994,
President of Citicorp
Investment Services.

+ Mr. Blundin was an officer of the Trust during the fiscal year ending October
31, 1999. He resigned from BISYS and as an officer of the Trust effective August
23, 1999.

The mailing address of each officer of the Trust is 3435 Stelzer Road, Columbus,
Ohio 43219-3035.

The officers of the Trust (other than Mr. Wilson) receive no compensation
directly from the Trust for performing the duties of their offices. BISYS
receives fees from the Trust as Administrator.

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<PAGE>

As of December 31, 1999, the Trustees and officers as a group owned beneficially
less than 1% of all classes of the outstanding shares of the Funds.

The LifeChoice Funds -- Conflicts of interest

The Trustees and officers of the Trust are subject to conflicts of
interest in managing both the LifeChoice Funds and some of the mutual funds
advised by KAM in which the LifeChoice Funds invest (the "Proprietary
Portfolios"). This conflict is most evident in the Board's supervision of KAM.
KAM and certain of its affiliates may provide services to, and receive fees
from, not just the Funds, but also the Proprietary Portfolios and mutual funds
not advised by KAM in which the LifeChoice Funds invest ("Other Portfolios").
The selection of investments and allocation of LifeChoice Fund assets will be
continuously and closely scrutinized by the Board in order to avoid even the
appearance of improper practices. It is possible, however, that a situation
might arise where one course of action for a LifeChoice Fund would be
detrimental to a Proprietary Portfolio, or vice versa. In that unlikely event,
the Trustees and officers of the Trust will exercise good business judgment in
upholding their fiduciary duties to each set of Funds, thus minimizing such
conflicts, if any should arise.

PART 6: FORMS OF AMENDED AND RESTATED TRUST INSTRUMENT AND DISTRIBUTION AND
SERVICE PLAN

Attached as Exhibit A is the Form of Amended and Restated Trust
Instrument referred to in proposal 2. Attached as Exhibit B is the Form of
Distribution and Service Plan referred to in proposal 3.

-49-

<PAGE>

Exhibit A

THE VICTORY PORTFOLIOS

TRUST INSTRUMENT

DATED DECEMBER 6, 1995

AMENDED AND RESTATED AS OF _________ ___, 2000

<PAGE>

THE VICTORY PORTFOLIOS

TABLE OF CONTENTS

Page
----

ARTICLE I - NAME AND DEFINITIONS............................................
Section 1.01 Name.......................................................

Section 1.02 Definitions................................................

ARTICLE II - BENEFICIAL INTEREST............................................
Section 2.01 Shares Of Beneficial Interest..............................

Section 2.02 Issuance of Shares.........................................

Section 2.03 Register of Shares and Share Certificates..................

Section 2.04 Transfer of Shares.........................................

Section 2.05 Treasury Shares............................................

Section 2.06 Establishment of Series....................................

Section 2.07 Investment in the Trust....................................

Section 2.08 Assets and Liabilities of Series...........................

Section 2.09 No Preemptive Rights.......................................

Section 2.10 No Personal Liability of Shareholder.......................

ARTICLE III - THE TRUSTEES..................................................
Section 3.01 Management of the Trust...................................

Section 3.02 Initial Trustees...........................................

Section 3.03 Term of Office.............................................

Section 3.04 Vacancies and Appointments................................

Section 3.05 Temporary Absence.........................................

Section 3.06 Number of Trustees........................................

Section 3.07 Effect of Ending of a Trustee's Service...................

Section 3.08 Ownership of Assets of the Trust...........................

ARTICLE IV - POWERS OF THE TRUSTEES.........................................
Section 4.01 Powers.....................................................

Section 4.02 Issuance and Repurchase of Shares.........................

Section 4.03 Trustees and Officers as Shareholders......................

Section 4.04 Action by the Trustees....................................

Section 4.05 Chairman of the Trustees...................................

Section 4.06 Principal Transactions.....................................

ARTICLE V - EXPENSES OF THE TRUST...........................................

ARTICLE VI - INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
ADMINISTRATOR AND TRANSFER AGENT...............................
Section 6.01 Investment Adviser.........................................

Section 6.02 Principal Underwriter.....................................

Section 6.03 Administration.............................................

Section 6.04 Transfer Agent.............................................

Section 6.05 Parties to Contract.......................................

Section 6.06 Provisions and Amendments.................................

ARTICLE VII - SHAREHOLDERS' VOTING POWERS AND MEETINGS......................
Section 7.01 Voting Powers.............................................

Section 7.02 Meetings..................................................

Section 7.03 Quorum and Required Vote..................................

ARTICLE VIII - CUSTODIAN....................................................
Section 8.01 Appointment and Duties....................................

Section 8.02 Central Certificate System................................

ARTICLE IX - DISTRIBUTIONS AND REDEMPTIONS..................................
Section 9.01 Distributions..............................................

Section 9.02 Redemptions...............................................

Section 9.03 Determination of Net Asset Value and Valuation
of Portfolio Assets.......................................

Section 9.04 Suspension of the Right of Redemption.....................

ARTICLE X - LIMITATION OF LIABILITY AND INDEMNIFICATION.....................
Section 10.01 Limitation of Liability..................................

Section 10.02 Indemnification..........................................

Section 10.03 Shareholders.............................................

ARTICLE XI - MISCELLANEOUS..................................................
Section 11.01 Trust Not a Partnership..................................

Section 11.02 Trustee's Good Faith Action, Expert Advice,
No Bond or Surety........................................

Section 11.03 Establishment of Record Dates............................

Section 11.04 Dissolution and Termination of Trust......................

Section 11.05 Reorganization and Master/Feeder.........................

Section 11.06 Filing of Copies, References Headings....................

Section 11.07 Applicable Law...........................................

Section 11.08 Derivative Actions.......................................

Section 11.08 Amendments...............................................

Section 11.10 Fiscal Year..............................................

Section 11.11 Name Reservation.........................................

Section 11.12 Provisions in Conflict With Law..........................

<PAGE>

THE VICTORY PORTFOLIOS

December 6, 1995

Amended and Restated as of __________ ___, 2000

TRUST INSTRUMENT of The Victory Portfolios, a Delaware business trust
(the "Trust"), amended and restated by Harry Gazelle, Eugene J. McDonald, Thomas
F. Morrissey, Roger Noall, Frank A. Weil, Leigh A. Wilson, and H. Patrick
Swygert (the "Trustees").

WHEREAS Robert G. Brown, Edward P. Campbell, Harry Gazelle, Stanley
I. Landgraf, Thomas F. Morrissey, Leigh A. Wilson, and H. Patrick Swygert, as
the initial Trustees of the Trust, established the Trust pursuant to a Trust
Instrument dated December 6, 1995 (the "Original Trust Instrument"); and

WHEREAS, 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 set forth herein; and

WHEREAS, the Trustees consider it necessary and appropriate to amend
and restate the Original Trust Instrument; and

WHEREAS, a majority of the Shareholders of the Trust voted to approve
the amendment and restatement of the Original Trust Instrument at a meeting held
on __________ ___, 2000;

NOW THEREFORE, the Original Trust Instrument is amended and restated
as follows:

ARTICLE I
NAME AND DEFINITIONS

Section 1.01 Name. The name of the trust created under the Original
Trust Instrument and continued 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 them in 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

1
<PAGE>

1940 Act;

(d) "Delaware Act" refers to Chapter 38 of Title 12 of the Delaware
Code titled "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
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 Instrument" means this Trust Instrument, as amended or
restated from time to time.

(m) "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 a par value of $0.001. All Shares
issued hereunder, including, without limitation, Shares issued in connection
with a dividend paid in

2
<PAGE>

Shares or a split of Shares, shall be fully paid and non-assessable.

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. 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 1/1000ths
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 or otherwise to
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.

Section 2.06 Establishment of Series. Subject to the provisions of
this Section 2.06, the Trust shall consist of the Series indicated on Schedule A
attached hereto, as such Schedule may be amended from time to time. The initial
Series of the Trust were comprised of twenty-four Series, each of which
corresponded to a series of shares of The Victory Portfolios, a Massachusetts
business trust (the "Predecessor Trust"). The preferences, voting powers, rights

3
<PAGE>

and privileges of the Series and any classes thereof existing as of the date
hereof shall be as set forth in the Trust's registration statement or statements
as filed with the Commission, as from time to time in effect. 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 or any classes thereof (other than those existing as
of the date hereof) 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, whether
directly in such resolution or by reference to, or approval of, another document
that sets forth such relative rights and preferences of such Series (or class)
including, without limitation, any registration statement of the Trust, or as
otherwise provided in such resolution. Upon the establishment of any such Series
(or class), Schedule A shall be amended to reflect the addition of such Series
(or class) thereto; provided that amendment of Schedule A shall not be a
condition precedent to the establishment of any Series (or class) in accordance
with this Trust Instrument. 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 (or class) previously established and designated, the Trustees
may by a majority vote abolish that Series (or class) and the establishment and
designation thereof, and, in connection with such abolishment, Schedule A shall
be amended to reflect the removal of such Series (or class) therefrom; provided
that amendment of Schedule A shall not be a condition precedent to the
abolishment of any Series (or class) in accordance with this Trust Instrument.

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 Investment in the Trust. The Trustees shall accept
investments in any Series from such persons and on such terms as they may from
time to time authorize. At the Trustees' discretion, such investments, subject
to applicable law, may be in the form of cash or securities in which the
affected Series is authorized to invest, valued as provided in Article IX
Section 9.03 hereof. 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,

4
<PAGE>

that the Trustees may, in their sole discretion, (a) fix minimum amounts for
initial and subsequent investments or (b) impose a sales charge upon investments
in such manner and at such time determined by the Trustees.

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 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, and separate and
distinct records shall be maintained for each 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, changes 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 or of any other Series and none of the
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to the Trust generally or any other Series
thereof shall be enforceable against the assets of such Series. 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.

5
<PAGE>

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 and 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 shall
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 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

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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 in the Original Trust Instrument. The (i) election of initial
Trustees and (ii) an approval of the Plan of Conversion for the transfer of
assets from the Predecessor Trust to the Trust, at the Special Meeting of the
Shareholders was conducted in accordance with the Proxy Statement of the
Predecessor Trust dated October 31, 1995, and is 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, becomes 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 two (2), 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 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;

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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;

(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

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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 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;

(x) To invest part or all of the Trust Property (or part or all of
the assets of any Series), or to dispose of part or all of the Trust Property
(or part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act (including investment by means of transfer of part
or all of the Trust Property in exchange for an interest or interests in such
one or more investment companies) all without any requirement of approval by
Shareholders unless required by the 1940 Act. Any such other investment company
may (but need not) be a trust (formed under the laws

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of the State of Delaware or of any other state) which is classified as a
partnership for federal income tax purposes; and

(y) 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 (including a telephone meeting) duly called, provided
a quorum of Trustees participate, or by written consent of a majority of the
Trustees without a 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

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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 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 Board of 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.

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, 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, custodians,
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)

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<PAGE>

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 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 sub-adviser (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.

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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.

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 or 6.02 of this Article VI shall be
effective unless assented to in a manner consistent with the requirements of
said Section 15, as modified by any applicable rule, regulation or order of the
Commission.

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

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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 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 (A) the 1940 Act or any other applicable laws, or (B) any
registrations, undertakings or agreements of the Trust known to such counsel,
and if the Trustees determine that the taking of such action without a
Shareholder vote would be consistent with the best interests of the Shareholders
(considered as a group).

(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. As determined by the Trustees without the vote or consent
of Shareholders (except as required by the 1940 Act), on any matter submitted to
a vote of Shareholders, either (i) 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 or (ii) each dollar of Net
Asset Value (number of Shares owned times Net Asset Value per share of such
Series or class thereof, as applicable) shall be entitled to one vote on any
matter on which such Shares are entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. Without limiting
the power of the Trustees in any way to designate otherwise in accordance with
the preceding sentence, the Trustees hereby establish that 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. 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.

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Section 7.02 Meetings. 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 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 unanimous written consent, to the extent not
inconsistent with the 1940 Act, and any such actions taken by a Series (or
class) may be consented to unanimously 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 capital, surplus and undivided profits of
at least twenty million dollars ($20,000,000) 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

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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 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 among 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.

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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 reissued 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 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 the 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

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<PAGE>

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
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 Required Redemption of Shares. The Trustees may require
Shareholders to redeem Shares for any reason under terms set by the Trustees,
including, but not limited to, (i) the determination of the Trustees that direct
or indirect ownership of Shares of any Series has or may become concentrated in
such Shareholder to an extent that would disqualify any Series as a regulated
investment company under the Internal Revenue Code of 1986, as amended (or any
successor statute thereto), (ii) the failure of a Shareholder to supply a tax
identification number if required to do so, or to have the minimum investment
required (which may vary by Series), (iii) the failure of a Shareholder to make
payment when due for the purchase of Shares issued to him or (iv) the Shares
owned by such Shareholder being below the minimum investment set by the
Trustees, from time to time, for investments in the Trust or in such Series or
classes thereof, as applicable.

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 for the Trustees to make any determination contemplated by this
Section 9.05.

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 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

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<PAGE>

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 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 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

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<PAGE>

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.

Section 10.03 Shareholders. In case any 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,

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<PAGE>

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 ninety (90)
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 ninety (90) 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 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 Dissolution and 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,
and 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) enter into a plan of liquidation in order to dissolve
and liquidate any Series (or class) of the Trust, or the Trust; or

(iii) 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

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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 Trustees and the
Trust or any affected Series 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 canceled and discharged and
any such Series shall terminate.

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. Upon filing of the certificate of cancellation
for the Trust, the Trust shall terminate.

Section 11.05 Reorganization and Master/Feeder.

(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 or consolidate 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 under the 1940
Act, or is 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.

(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) of 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.

(e) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval (unless required by the 1940 Act), invest all or a portion
of the Trust Property of any Series, or dispose of all or a portion of the Trust
Property of any Series, and invest the proceeds of such disposition in interests
issued by one or more other investment companies registered under the 1940 Act.
Any such other investment company may (but need not) be a trust (formed under
the laws of the State of Delaware or any other state or jurisdiction) (or series
thereof) which is classified as a partnership for federal income tax purposes.
Notwithstanding anything else herein, the Trustees may, without Shareholder
approval unless such approval is required by

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<PAGE>

the 1940 Act, cause a Series that is organized in the master/feeder fund
structure to withdraw or redeem its Trust Property from the master fund and
cause such series to invest its Trust Property directly in securities and other
financial instruments or in another master fund.

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," shall be deemed to refer to this Trust
Instrument as amended or affected by any such supplemental Trust Instrument. All
expressions like "his," "he" and "him," 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 Derivative Actions. In addition to the requirements set
forth in Section

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<PAGE>

3816 of the Delaware Act, a Shareholder may bring a derivative action on behalf
of the Trust only if the following conditions are met:

(a) The Shareholder or Shareholders must make a pre-suit demand upon
the Trustees to bring the subject action unless an effort to cause the Trustees
to bring such an action is not likely to succeed. For purposes of this Section
11.08(a), a demand on the Trustees shall only be deemed not likely to succeed
and therefore excused if a majority of the Board of Trustees, or a majority of
any committee established to consider the merits of such action, has a personal
financial interest in the transaction at issue, and a Trustee shall not be
deemed interested in a transaction or otherwise disqualified from ruling on the
merits of a Shareholder demand by virtue of the fact that such Trustee receives
remuneration for his service on the Board of Trustees of the Trust or on the
boards of one or more investment companies that are under common management with
or otherwise affiliated with the Trust.

(b) Unless a demand is not required under paragraph (a) of this
Section 11.08, Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Series or Class to which such action
relates, shall join in the request for the Trustees to commence such action; and

(c) Unless a demand is not required under paragraph (a) of this
Section 11.08, the Trustees must be afforded a reasonable amount of time to
consider such Shareholder request and to investigate the basis of such claim.
The Trustees shall be entitled to retain counsel or other advisors in
considering the merits of the request and shall require an undertaking by the
Shareholders making such request to reimburse the Trust for the expense of any
such advisors in the event that the Trustees determine not to bring such action.

For purposes of this Section 11.08, the Board of Trustees may
designate a committee of one Trustee to consider a Shareholder demand if
necessary to create a committee with a majority of Trustees who do not have a
personal financial interest in the transaction at issue.

Section 11.09 Amendments. Except as specifically provided herein, the
Trustees may, without shareholder vote, 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
(a) on any amendment as may be required by law or by the Trust's registration
statement filed with the Commission and (b) on any amendment 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 shall be authorized by vote of the Shareholders of each
Series 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 11.10 Fiscal Year. The fiscal year of the Trust 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.

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Section 11.11 Name Reservation. The Trustees on behalf of the Trust
acknowledge that KeyCorp 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, KeyCorp 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. KeyCorp 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 11.12 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.

26
<PAGE>

IN WITNESS WHEREOF, the undersigned, being all of the current
Trustees of the Trust, have executed this instrument as of date first written
above.

------------------------------ -------------------------------
Harry Gazelle, as Trustee Leigh A. Wilson, as Trustee
and not individually and not individually

------------------------------- -------------------------------
Eugene J. McDonald, as Trustee H. Patrick Swygert, as Trustee
and not individually and not individually

------------------------------- -------------------------------
Thomas F. Morrissey, as Trustee Frank A. Weil, as Trustee
and not individually and not individually

-------------------------------
Roger Noall, as Trustee
and not individually

<PAGE>

SCHEDULE A

<S> <C>
Fund Classes
Balanced Fund.......................................................Class A, Class G and Class G
Convertible Securities Fund.........................................Class A and Class G
Diversified Stock Fund..............................................Class A, Class B and Class G
Equity Income Fund..................................................Class A
Established Value Fund..............................................Class A and Class G
Federal Money Market Fund...........................................Investor and Select
Financial Reserves Fund.............................................Class A
Fund for Income.....................................................Class A and Class G
Government Mortgage Fund............................................Class A
Gradison Government Reserves Fund...................................Class G
Growth Fund.........................................................Class A and Class G
Institutional Money Market Fund.....................................Investor and Select
Intermediate Income Fund............................................Class A and Class G
International Growth Fund...........................................Class A, Class B and Class G
Investment Quality Bond Fund........................................Class A and Class G
Lakefront Fund......................................................Class A
LifeChoice Conservative Investor Fund...............................Class A
LifeChoice Moderate Investor Fund...................................Class A
LifeChoice Growth Investor Fund.....................................Class A
Limited Term Income Fund............................................Class A
Maine Municipal Bond Fund (Intermediate)............................Class A
Maine Municipal Bond Fund (Long)....................................Class A
Michigan Municipal Bond Fund........................................Class A
National Municipal Bond Fund........................................Class A, Class B and Class G
National Municipal Bond Fund (Short Intermediate)...................Class A
National Municipal Bond Fund (Long).................................Class A
New York Tax-Free Fund..............................................Class A, Class B and Class G
Ohio Municipal Bond Fund............................................Class A and Class G
Ohio Municipal Money Market Fund....................................Class A
Ohio Regional Stock Fund............................................Class A and Class B
Prime Obligations Fund..............................................Class A
Real Estate Investment Fund.........................................Class A and Class G
Small Company Opportunity Fund......................................Class A and Class G
Special Value Fund..................................................Class A, Class B and Class G
Stock Index Fund....................................................Class A and Class G
Tax-Free Money Market Fund..........................................Class A
U.S. Government Obligations Fund....................................Investor and Select
Value Fund..........................................................Class A and Class G

As of December 1, 1999

</TABLE>

<PAGE>

Exhibit B

THE VICTORY PORTFOLIOS
FORM OF DISTRIBUTION AND SERVICE PLAN
AMENDED AND RESTATED FROM PLAN ADOPTED JUNE 5, 1995

1. This Distribution and Service Plan (the "Plan"), when
effective in accordance with its terms, shall be the written plan contemplated
by Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), of each of the series (individually, a "Fund" and collectively, the
"Funds") and each class set forth on Schedule I as amended from time to time,
each a duly established series of shares of The Victory Portfolios, a Delaware
business trust, registered as an open-end investment company under the 1940 Act
(the "Trust").

2. The Trust has entered into a separate Administration Agreement
and Distribution Agreement with respect to each Fund, under which the
Distributor uses all reasonable efforts, consistent with its other business, to
secure purchasers for each Fund's shares of beneficial interest ("Shares").
Under the Distribution Agreement, the Distributor pays, among other things, the
expenses of printing and distributing any prospectuses, reports and other
literature used by the Distributor, advertising, and other promotional
activities in connection with the offering of Shares of the Funds for sale to
the public. The Trust, on behalf of each of the Funds, has also entered into an
Investment Advisory Aagreement under which the Investment Advisor provides
investment advisory services.

3. The Funds will not make separate payments as a result of this
Plan. To the extent that any payments made by the Funds' Administrator,
Distributor, Investment Adviser or any sub-adviser, directly or through an
affiliate (in each case, from its own resources), should be deemed to be
indirect financing of any activity primarily intended to result in the sale of
Shares within the context of Rule 12b-1 under the 1940 Act, then such payments
shall be deemed to be authorized by this Plan.

4. This Plan shall become effective on the first business day of
the month following approval by a vote of at least a "majority of the
outstanding voting securities" (as defined by the 1940 Act) of each class of
Shares set forth on Schedule I, the Plan having been approved by a vote of a
majority of the Trustees of the Trust, including a majority of the Trustees who
are not interested persons of the Trust (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan (the "Independent Trustees"), cast in person
at a meeting called for the purpose of voting on the Plan.

5. This Plan shall, unless terminated as hereinafter provided,
remain in effect for a period of one year from the date specified below, and
from year to year thereafter, provided, however, that such continuance is
subject to approval annually by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any

<PAGE>

amendment to authorize direct payments by any of the Classes set forth on
Schedule I to finance any activity primarily intended to result in the sale of
shares of the Funds, shall be effective only upon approval by a vote of a
majority of the outstanding voting securities of that Class, and (b) any
material amendments to this Plan shall be effective only upon approval by a
majority of the Trustees, including a majority of the Independent Trustees, and
by a majority of the outstanding voting securities.of each Class set forth on
Schedule I.

6. This Plan may be terminated at any time, without the payment
of any penalty, by the vote of a majority of the Independent Trustees or by the
vote of a majority of the outstanding voting securities of the applicable class
of each Fund.

7. During the existence of the Plan, the Trust may require the
Administrator, Distributor, Investment Advisor or ant sub-adviser to provide to
the Trust, for review by the Board of Trustees, a written report of the amounts
expended in connection with the financing of any activity primarily intended to
result in the sale of Shares.

8. Consistent with the limitations of shareholder and Trustee
liability as set forth in the Trust's Trust Instrument, any obligations assumed
by a Fund pursuant to this Plan, shall be limited in all cases to each Fund
individually, and the assets of each Fund individually, and shall not constitute
obligations of any shareholder or other series or classes of shares of the Trust
or of any Trustee.

9. If any provision of this Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.

IN WITNESS WHEREOF, the Trust has executed this Plan on behalf of each Fund
listed on Schedule I, individually and not jointly, as of __________,_____.

The Victory Portfolios

By: _____________________

<PAGE>

SCHEDULE I

This Distribution Plan shall be adopted with respect to the following series and
classes thereof of the Trust:

Series: Class:

Dated as of ____________, ____

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

BALANCED FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Balanced Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

IF THIS PROXY CARD IS RETURNED, AND NO CHOICE IS INDICATED FOR ANY ITEM, THIS
PROXY WILL BE VOTED AFFIRMATIVELY ON THE MATTERS PRESENTED. THE BOARD OF
TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" THE FOLLOWING PROPOSALS.

If you wish to vote Against a specific item in proposals Two and Four, you must
mail or fax your proxy card. If you choose to vote the same for all items in
these proposals, Telephone and Internet services are available.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
KEEP THIS PORTION FOR YOUR RECORDS
- -------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

BALANCED FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

01) Theodore H. Emmerich, 02) Dr. Harry Gazelle, 03) Frankie D. Hughes,
04) Roger Noall, 05) Eugene J. McDonald, 06) Dr. Thomas F. Morrissey, 07)
H. Patrick Swygert, 08) Frank A. Weil, 09) Donald E. Weston and 10) Leigh
A. Wilson

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

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 (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

BALANCED FUND - CLASS B

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

BALANCED FUND - CLASS B

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

BALANCED FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

BALANCED FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

CONVERTIBLE SECURITIES FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Convertible Securities Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

CONVERTIBLE SECURITIES FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification (h) Underwriting
(b) Concentration (j) Investing to influence management
(d) Borrowing (k) Purchasing on margin and selling short
(e) Lending (l) Illiquid securities
(f) Senior securities
(g) Real estate

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

CONVERTIBLE SECURITIES FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

CONVERTIBLE SECURITIES FUND - CLASS G

Vote on Trustees:
1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

4. To approve changes to the Fund's fundamental investment restrictions.

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

DIVERSIFIED STOCK FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Diversified Stock Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

DIVERSIFIED STOCK FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

DIVERSIFIED STOCK FUND - CLASS B

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

DIVERSIFIED STOCK FUND - CLASS B

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

DIVERSIFIED STOCK FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

DIVERSIFIED STOCK FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

ESTABLISHED VALUE FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Established Value Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

ESTABLISHED VALUE FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification (h) Underwriting
(b) Concentration (i) Pledging
(c) Joint trading (j) Investing to influence management
(d) Borrowing (k) Purchasing on margin and selling short
(e) Lending (l) Illiquid securities
(f) Senior securities (m) Investment in issuers whose shares are
(g) Real estate owned by Victory's Tristees or Officers
(n) Investment in unseasoned issuers

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

FEDERAL MONEY MARKET FUND - INVESTOR SHARES

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Federal Money Market Fund (the "Fund"), for use at the Special Meeting
of shareholders to be held at the offices of The Victory Portfolios, 3435
Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern
time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski and
each of them, with full power of substitution, as proxies of the undersigned to
vote at the above stated Special Meeting, and at all adjournments thereof, all
shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

FEDERAL MONEY MARKET FUND - INVESTOR SHARES

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification (h) Underwriting
(b) Concentration (j) Investing to influence management
(d) Borrowing (k) Purchasing on margin and selling short
(f) Senior securities
(g) Real estate

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

FEDERAL MONEY MARKET FUND - SELECT SHARES

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

FEDERAL MONEY MARKET FUND - SELECT SHARES

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification (h) Underwriting
(b) Concentration (j) Investing to influence management
(d) Borrowing (k) Purchasing on margin and selling short
(f) Senior securities
(g) Real estate

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

FINANCIAL RESERVES FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Financial Reserves Fund (the "Fund"), for use at the Special Meeting
of shareholders to be held at the offices of The Victory Portfolios, 3435
Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern
time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski and
each of them, with full power of substitution, as proxies of the undersigned to
vote at the above stated Special Meeting, and at all adjournments thereof, all
shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

FINANCIAL RESERVES FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

FUND FOR INCOME - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Fund for Income (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

FUND FOR INCOME - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting
(i) Pledging

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

FUND FOR INCOME - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

FUND FOR INCOME - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting
(i) Pledging

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

GRADISON GOVERNMENT RESERVES FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Gradison Government Reserves Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

GRADISON GOVERNMENT RESERVES FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

GROWTH FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Growth Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

GROWTH FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

01) Theodore H. Emmerich, 02) Dr. Harry Gazelle, 03) Frankie D. Hughes, 04)
Roger Noall, 05) Eugene J. McDonald, 06) Dr. Thomas F. Morrissey, 07) H.
Patrick Swygert, 08) Frank A. Weil, 09) Donald E. Weston and 10) Leigh A.
Wilson

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:
- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for The
Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- ------------------------------
To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

GROWTH FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

GROWTH FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

01) Theodore H. Emmerich, 02) Dr. Harry Gazelle, 03) Frankie D. Hughes, 04)
Roger Noall, 05) Eugene J. McDonald, 06) Dr. Thomas F. Morrissey, 07) H.
Patrick Swygert, 08) Frank A. Weil, 09) Donald E. Weston and 10) Leigh A.
Wilson

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for The
Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- --------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- --------------------------------
To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INSTITUTIONAL MONEY MARKET FUND - INVESTOR SHARES

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Institutional Money Market Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

INSTITUTIONAL MONEY MARKET FUND - INVESTOR SHARES

Vote on Trustees
1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X__________________________________________
Signature (Please sign within box) (Date)

X__________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INSTITUTIONAL MONEY MARKET FUND - SELECT SHARES

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

INSTITUTIONAL MONEY MARKET FUND - SELECT SHARES

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:
- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X___________________________________________
Signature (Please sign within box) (Date)

X___________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INTERMEDIATE INCOME FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Intermediate Income Fund (the "Fund"), for use at the Special Meeting
of shareholders to be held at the offices of The Victory Portfolios, 3435
Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern
time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski and
each of them, with full power of substitution, as proxies of the undersigned to
vote at the above stated Special Meeting, and at all adjournments thereof, all
shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

INTERMEDIATE INCOME FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:
- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INTERMEDIATE INCOME FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

INTERMEDIATE INCOME FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:
- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INTERNATIONAL GROWTH FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of International Growth Fund (the "Fund"), for use at the Special Meeting
of shareholders to be held at the offices of The Victory Portfolios, 3435
Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern
time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski and
each of them, with full power of substitution, as proxies of the undersigned to
vote at the above stated Special Meeting, and at all adjournments thereof, all
shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

INTERNATIONAL GROWTH FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:
- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- --------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X___________________________________________
Signature (Please sign within box) (Date)

X___________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INTERNATIONAL GROWTH FUND - CLASS B

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

INTERNATIONAL GROWTH FUND - CLASS B

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INTERNATIONAL GROWTH FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

INTERNATIONAL GROWTH FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INVESTMENT QUALITY BOND FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Investment Quality Bond Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

INVESTMENT QUALITY BOND FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

INVESTMENT QUALITY BOND FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

INVESTMENT QUALITY BOND FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

LAKEFRONT FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Lakefront Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

LAKEFRONT FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

LIFECHOICE CONSERVATIVE INVESTOR FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of LifeChoice Conservative Investor Fund (the "Fund"), for use at the
Special Meeting of shareholders to be held at the offices of The Victory
Portfolios, 3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30
a.m. Eastern time. The undersigned hereby appoints Karen Haber and Anne M.
Dombrowski and each of them, with full power of substitution, as proxies of the
undersigned to vote at the above stated Special Meeting, and at all adjournments
thereof, all shares of beneficial interest of the Fund that are held of record
by the undersigned on the record date for the Special Meeting, upon the
proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

LIFECHOICE CONSERVATIVE INVESTOR FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

LIFECHOICE GROWTH INVESTOR FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of LifeChoice Growth Investor Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

LIFECHOICE GROWTH INVESTOR FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

LIFECHOICE MODERATE INVESTOR FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of LifeChoice Moderate Investor Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

LIFECHOICE MODERATE INVESTOR FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

LIMITED TERM INCOME FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Limited Term Income Fund (the "Fund"), for use at the Special Meeting
of shareholders to be held at the offices of The Victory Portfolios, 3435
Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern
time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski and
each of them, with full power of substitution, as proxies of the undersigned to
vote at the above stated Special Meeting, and at all adjournments thereof, all
shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

LIMITED TERM INCOME FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint Trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

NATIONAL MUNICIPAL BOND FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of National Municipal Bond Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

NATIONAL MUNICIPAL BOND FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X___________________________________________
Signature (Please sign within box) (Date)

X___________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

NATIONAL MUNICIPAL BOND FUND - CLASS B

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

NATIONAL MUNICIPAL BOND FUND - CLASS B

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

NATIONAL MUNICIPAL BOND FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

NATIONAL MUNICIPAL BOND FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

NEW YORK TAX-FREE FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of New York Tax-Free Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

NEW YORK TAX-FREE FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) `Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X______________________________________________
Signature (Please sign within box) (Date)

X______________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

NEW YORK TAX-FREE FUND - CLASS B

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

NEW YORK TAX-FREE FUND - CLASS B

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) `Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

NEW YORK TAX-FREE FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

NEW YORK TAX-FREE FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) `Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

OHIO MUNICIPAL BOND FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Ohio Municipal Bond Fund (the "Fund"), for use at the Special Meeting
of shareholders to be held at the offices of The Victory Portfolios, 3435
Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern
time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski and
each of them, with full power of substitution, as proxies of the undersigned to
vote at the above stated Special Meeting, and at all adjournments thereof, all
shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

OHIO MUNICIPAL BOND FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X___________________________________________
Signature (Please sign within box) (Date)

X___________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

OHIO MUNICIPAL BOND FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

OHIO MUNICIPAL BOND FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

OHIO MUNICIPAL MONEY MARKET FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Ohio Municipal Money Market Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

OHIO MUNICIPAL MONEY MARKET FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

PRIME OBLIGATIONS FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Prime Obligations Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

PRIME OBLIGATIONS FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

REAL ESTATE INVESTMENT FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Real Estate Investment Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

REAL ESTATE INVESTMENT FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X______________________________________________
Signature (Please sign within box) (Date)

X______________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

REAL ESTATE INVESTMENT FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

REAL ESTATE INVESTMENT FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

SMALL COMPANY OPPORTUNITY FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Small Company Opportunity Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

SMALL COMPANY OPPORTUNITY FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

SMALL COMPANY OPPORTUNITY FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

SMALL COMPANY OPPORTUNITY FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

SPECIAL VALUE FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Special Value Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

SPECIAL VALUE FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

SPECIAL VALUE FUND - CLASS B

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

SPECIAL VALUE FUND - CLASS B

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

SPECIAL VALUE FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

SPECIAL VALUE FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

STOCK INDEX FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Stock Index Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

STOCK INDEX FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

STOCK INDEX FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

STOCK INDEX FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

TAX-FREE MONEY MARKET FUND

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Tax-Free Money Market Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

TAX-FREE MONEY MARKET FUND

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

U.S. GOVERNMENT OBLIGATIONS FUND - INVESTOR SHARES

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of U.S. Government Obligations Fund (the "Fund"), for use at the Special
Meeting of shareholders to be held at the offices of The Victory Portfolios,
3435 Stelzer Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m.
Eastern time. The undersigned hereby appoints Karen Haber and Anne M. Dombrowski
and each of them, with full power of substitution, as proxies of the undersigned
to vote at the above stated Special Meeting, and at all adjournments thereof,
all shares of beneficial interest of the Fund that are held of record by the
undersigned on the record date for the Special Meeting, upon the proposals
indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

U.S. GOVERNMENT OBLIGATIONS FUND - INVESTOR SHARES

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

U.S. GOVERNMENT OBLIGATIONS FUND - SELECT SHARES

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

U.S. GOVERNMENT OBLIGATIONS FUND - SELECT SHARES

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

FOR FOR ALL ABSTAIN
ALL EXCEPT ALL
[ ] [ ] [ ]

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X______________________________________________
Signature (Please sign within box) (Date)

X______________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

VALUE FUND - CLASS A

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The Victory Portfolios, on
behalf of Value Fund (the "Fund"), for use at the Special Meeting of
shareholders to be held at the offices of The Victory Portfolios, 3435 Stelzer
Road, Columbus, OH 43219-3035 on March 20, 2000 at 8:30 a.m. Eastern time. The
undersigned hereby appoints Karen Haber and Anne M. Dombrowski and each of them,
with full power of substitution, as proxies of the undersigned to vote at the
above stated Special Meeting, and at all adjournments thereof, all shares of
beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the proposals indicated below:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

VALUE FUND - CLASS A

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:
- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

3. To approve the "defensive" Rule 12b-1 distribution plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)

<PAGE>

LOGO

After reviewing the Proxy Statement, please vote by utilizing one of the
following convenient options:

1. Vote by Telephone
To vote by Touch-Tone Telephone call 1-800-690-6903.
Please have the 12 digit control number available at the time of the call.

2. Vote by Internet
Got to Website www.proxyvote.com. Please enter the 12 digit control number
found on the proxy card and follow the simple instructions.

3. Vote by Fax
Complete, sign and date the proxy card and fax it to 1-800-733-1885
anytime.

4. Vote by Mail
Simply enclose your executed proxy in the enclosed postage-paid envelope.

THE VICTORY PORTFOLIOS

VALUE FUND - CLASS G

SPECIAL MEETING OF SHAREHOLDERS SCHEDULED TO BE HELD ON MARCH 20, 2000

PROXY CARD

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

VALUE FUND - CLASS G

Vote on Trustees

1. To elect trustees to serve as members of the Board of Trustees of The
Victory Portfolios, the nominees are:

FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ]

<PAGE>

To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below:

- -------------------------------

Vote on Proposals

2. To approve the adoption of an Amended and Restated Trust Instrument for
The Victory Portfolios.

(a) Reorganizations (e) Master/Feeder structure
(b) Voting powers (f) Derivative actions
(c) Required redemptions (g) Future amendments
(d) Record date

- -------------------------------

To vote against a particular change, mark "For All Except" and write the
corresponding letter of the item on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

4. To approve changes to the Fund's fundamental investment restrictions.

(a) Diversification
(b) Concentration
(c) Joint trading
(d) Borrowing
(e) Lending
(f) Senior securities
(g) Real estate
(h) Underwriting

- -------------------------------

To vote against a particular proposed change applicable to your Fund, mark "For
All Except" and write the policy's letter on the line above.

FOR ALL ABSTAIN
FOR ALL EXCEPT ALL
[ ] [ ] [ ]

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

X_____________________________________________
Signature (Please sign within box) (Date)

X_____________________________________________
Signature (joint owners) (Date)