<PAGE> 1
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 (AMENDMENT NO. __)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for Use of the Commission
[ ] Definitive proxy statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE HUNTINGTON FUNDS
(Name of Registrant as Specified in Its Charter)
N/A
(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)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies: ________
(2) Aggregate number of securities to which transaction
applies: ________
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): ________
(4) Proposed maximum aggregate value of transaction:
_________
(5) Total fee paid: _______
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form
or schedule and the date of its filing.
(1) Amount previously paid: _____________
(2) Form, schedule or registration statement no.:
____________
(3) Filing party: __________
(4) Date filed: __________
<PAGE> 2
THE HUNTINGTON FUNDS
Florida Tax-Free Money Fund
41 South High Street
Columbus, Ohio 43287
Telephone: 1-800-253-0412
May 30, 2000
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
of the Huntington Florida Tax-Free Money Fund (the "Fund") to be held at the
offices of SEI Investments Mutual Fund Services, One Freedom Valley Road, Oaks,
Pennsylvania 19456, on Wednesday, June ___, 2000, at 10:00 a.m., local time.
As you may recall, on October 29, 1999, Fort Washington Investment
Advisors, Inc. ("Fort Washington") purchased all of the stock of Countrywide
Financial Services, Inc. ("CFS"), the parent company of the Fund's sub-adviser,
Countrywide Investments, Inc. ("Countrywide"). As a result of this transaction,
Countrywide became an indirect subsidiary of Fort Washington and part of The
Western-Southern Enterprise, a dynamic group of financial services companies
owned by The Western and Southern Life Insurance Company of Cincinnati, Ohio.
Effective May 1, 2000, Countrywide's investment advisory personnel and
operations responsible for the Fund will be reorganized into Fort Washington. As
a full-service registered investment advisory firm, Fort Washington offers
professional and comprehensive investment management services for foundations
and endowments, corporate pension funds, insurance companies, mutual funds,
colleges and universities, religious organizations and high net worth
individuals. As of December 31, 1999, Fort Washington had assets under
management exceeding $12.9 billion.
We view this reorganization as very positive for a number of reasons.
The extensive resources of Fort Washington will become more accessible to the
Fund. Moreover, it is anticipated that there will be no material change in the
investment strategies employed or investment professionals assigned to the Fund.
Under the Investment Company Act of 1940, the sub-advisory agreement
for the Fund between The Huntington National Bank and Countrywide was
automatically terminated on May 1, 2000 as a result of this reorganization. In
anticipation of this result, the Board of Trustees of The Huntington Funds
approved an interim sub-advisory agreement with Fort Washington which took
effect as of May 1, 2000. This interim sub-advisory agreement will remain in
effect until September 28, 2000 or until the shareholders of the Fund approve a
new sub-advisory agreement with Fort Washington, whichever is earlier.
Accordingly, we are asking you to approve a new sub-
<PAGE> 3
advisory agreement with Fort Washington. THE ADVISORY FEES CHARGED TO YOUR FUND
WILL NOT CHANGE IF YOU APPROVE THE NEW SUB-ADVISORY AGREEMENT.
If shareholders approve the proposed new sub-advisory agreement, Fort
Washington will serve as sub-adviser under the new agreement effective as of the
date of the shareholder vote. In the event that shareholders do not approve the
new sub-advisory agreement, Huntington will consider alternative arrangements.
The Board of Trustees has given full and careful consideration to this
matter and has concluded that the proposal is in the best interests of the Fund
and its shareholders. The Board of Trustees therefore recommends that you vote
"FOR" the proposal.
Your vote is important. To assure your representation at the meeting,
please vote by signing and dating the enclosed proxy and returning it promptly
in the accompanying envelope, whether or not you expect to be present at the
meeting. If you attend the meeting, you may revoke your proxy and vote your
shares in person. PLEASE VOTE NOW TO HELP SAVE THE COST OF ADDITIONAL
SOLICITATIONS.
Very truly yours,
Mark Nagle
President
<PAGE> 4
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD. SIGN, DATE
AND RETURN IT IN THE ENVELOPE PROVIDED. TO SAVE THE COST OF ADDITIONAL
SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
THE HUNTINGTON FUNDS
Florida Tax-Free Money Fund
41 South High Street
Columbus, Ohio 43287
Telephone: 1-800-253-0412
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
TO BE HELD ON JUNE ___, 2000
To the Shareholders:
You are invited to attend a special meeting of shareholders of the
Huntington Florida Tax-Free Money Fund (the "Fund"). The special meeting will be
held at the offices of SEI Investments Mutual Fund Services, One Freedom Valley
Road, Oaks, Pennsylvania 19456, on Wednesday, June 7, 2000, at 10:00 a.m., local
time, for the following purposes:
1. To approve or disapprove a new sub-advisory agreement between
The Huntington National Bank and Fort Washington Investment
Advisors, Inc. to become effective upon shareholder approval.
There will be no change in the fees payable by the Fund as a
result of approval of the new sub-advisory agreement.
2. To act on any other matters that may properly come before the
special meeting or at any adjournment thereof.
THE ACCOMPANYING PROXY IS SOLICITED BY THE BOARD OF TRUSTEES (THE
"TRUSTEES") OF THE HUNTINGTON FUNDS (THE "TRUST") FOR VOTING AT THE SPECIAL
MEETING AND AT ANY AND ALL ADJOURNMENTS THEREOF. This proxy statement was first
mailed to shareholders on or about May 30, 2000.
Only the shareholders of the Fund will vote at the special meeting. The
Board of Trustees recommends an affirmative vote on Item 1 by the shareholders
of the Fund. The vote required to approve Item 1 is described under the section
of this proxy statement entitled "Outstanding Shares and Voting Requirements."
The Trustees have fixed the close of business on May 9, 2000 as the
record date for the determination of shareholders of the Fund entitled to notice
of and to vote at the special meeting.
<PAGE> 5
Because the proposed new sub-advisory agreement affects both the holders of
Investment A Shares (formerly known as Investment Shares) and the holders of
Trust Shares of the Fund on an identical basis, shares of both classes of the
Fund will vote together as a single class on Item 1 at the meeting. As of the
record date, the aggregate number of Investment A Shares (formerly known as
Investment Shares) and Trust Shares of the Fund issued and outstanding was as
follows:
<TABLE>
<S> <C>
Investment A Shares 16,394,761.45 shares
Trust Shares 22,766,252.92 shares
</TABLE>
PRINCIPAL SHAREHOLDERS
At May 9, 2000, the following persons owned of record 5% or more of the
outstanding voting shares of the Fund (for this purpose, Investment A Shares and
Trust Shares have been aggregated, since both classes of each series will vote
as a group):
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF COMBINED
NAME AND ADDRESS OF RECORD HOLDER SHARES OWNED SHARES OWNED
<S> <C> <C>
Huntington National Bank,
as Trustee
41 South High Street
Columbus, Ohio 43215-6101 22,766,252.92 58.13%
Huntington National Bank,
FBO Private Banking Accounts
41 South High Street
Columbus, Ohio 43215 16,095,256.03 41.10%
</TABLE>
PROPOSAL TO APPROVE OR DISAPPROVE
NEW SUB-ADVISORY AGREEMENT
BACKGROUND
The Fund is advised by The Huntington National Bank ("Huntington"),
located at 41 South High Street, Columbus, Ohio 43215, pursuant to an investment
advisory agreement approved by the Trustees on October 21, 1998 and by the
initial shareholder on January 6, 1999, and restated on April 30, 2000. Under
the terms of the investment advisory agreement, subject to the supervision and
direction of the Trustees, Huntington is responsible for providing a continuous
program for the Fund, including, but not limited to, investment research and
management with respect to all securities, investments, cash and cash
equivalents in the Fund. For its services to the Fund, effective April 30, 2000,
the Trustees approved a reduction in fees paid to Huntington under the
investment advisory agreement. Under the restated agreement, Huntington receives
an annual fee based on the average daily net assets of the Fund of: 0.30% up to
$500 million; 0.25% from $500 million to $1 billion;
2
<PAGE> 6
and 0.20% over $1 billion. Prior to April 30, 2000, Huntington earned an annual
fee based on the average daily net assets of the Fund of: 0.50% up to $100
million; 0.45% from $100 million to $200 million; 0.40% from $200 million to
$300 million; and 0.375% over $300 million.
Countrywide Investments, Inc. ("Countrywide") served as the sub-adviser
to the Fund from the inception of the Fund through October 29, 1999 pursuant to
a sub-advisory agreement with Huntington (the "Initial Countrywide Sub-Advisory
Agreement") which was approved by the Trust's Board of Trustees, including a
majority of the Trustees who are not interested persons, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), of Countrywide or
the Trust (the "Independent Trustees"), on October 21, 1998, and by the initial
shareholder of the Fund on January 6, 1999.
Following the automatic termination of the Initial Sub-Advisory
Agreement as a result of the sale of stock by Countrywide's parent company,
Countrywide Financial Services, Inc. ("CFS"), to Fort Washington Investment
Advisors, Inc. ("Fort Washington") on October 29, 1999, Countrywide continued to
serve as sub-adviser to the Fund pursuant to a new sub-advisory agreement with
Huntington (the "Second Sub-Advisory Agreement") which was approved by the
Trust's Board of Trustees, including a majority of the Independent Trustees, on
October 1, 1999, and by a majority of the outstanding voting securities of the
Fund on October 27, 1999.
On May 1, 2000, the investment advisory personnel and operations of
Countrywide were reorganized into Fort Washington. Under the 1940 Act, a
transaction which results in a change of control or management of an investment
adviser may be deemed an "assignment." The 1940 Act further provides that an
investment advisory agreement will automatically terminate in the event of its
assignment. The reorganization of Countrywide constituted a "change in control"
of Countrywide for purposes of the 1940 Act and, as a result, the Second
Sub-Advisory Agreement was automatically terminated.
On April 26, 2000, the Trust's Board of Trustees approved an interim
sub-advisory agreement (the "Interim Sub-Advisory Agreement") pursuant to which,
in accordance with Rule 15a-4 under the 1940 Act, Fort Washington may serve as
the sub-adviser to the Fund until the earlier of September 28, 2000, or until a
new sub-advisory agreement between Huntington and Fort Washington is approved by
a majority of the outstanding voting securities of the Fund.
THE COUNTRYWIDE SUB-ADVISORY AGREEMENTS
As described above, Countrywide served as the sub-adviser to the Fund
until May 1, 2000. Under both the Initial Sub-Advisory Agreement and the Second
Sub-Advisory Agreement, Countrywide provided to Huntington such investment
advice, statistical and other factual information as was from time to time
reasonably requested by Huntington for the Fund. The initial terms of each of
the two Countrywide Sub-Advisory Agreements were two years, with subsequent
renewals from year to year thereafter, subject to approval by the Trustees in
accordance with the 1940 Act.
3
<PAGE> 7
From the Fund's commencement of operations (January 6, 1999) through
December 31, 1999, Huntington earned $156,390 in advisory fees, $93,851 of which
was voluntarily waived. During the same period, Countrywide earned $62,555 in
sub-advisory fees, none of which was waived. Although there is no assurance that
any fee waivers will continue in the future, effective April 30, 2000,
Huntington reduced the fees charged to the Fund under its Advisory Agreement.
THE INTERIM SUB-ADVISORY AGREEMENT
As a result of the automatic termination of the Second Sub-Advisory
Agreement described above, in accordance with Rule 15a-4 under the 1940 Act,
Huntington entered into the Interim Sub-Advisory Agreement with Fort Washington
as of May 1, 2000. Except as discussed more fully below, the terms and
conditions of the Interim Sub-Advisory Agreement with Fort Washington are
substantially identical to those of the Second Sub-Advisory Agreement with
Countrywide with respect to duties, fees, and standard of care.
Under the Interim Sub-Advisory Agreement, Fort Washington selects
portfolio securities for investment by the Fund, purchases and sells securities
of the Fund, and upon making any purchase or sale decision, places orders for
the execution of such portfolio transactions, all in accordance with the 1940
Act and any rules thereunder, subject to instructions from Huntington, the
supervision and control of the Board of Trustees of the Trust, and the
investment objectives, policies and restrictions of the Fund.
Under the Interim Sub-Advisory Agreement, Huntington pays a
sub-advisory fee based on an annual rate of 0.20% of the average daily net
assets of the Fund. This is the same fee that Countrywide received from
Huntington under each of the previous Countrywide Sub-Advisory Agreements. Under
the Interim Sub-Advisory Agreement, however, Huntington will not pay the
sub-advisory fee directly to Fort Washington, but shall make such payment into
an interest-bearing escrow account at the end of each month.
In the event that the New Sub-Advisory Agreement with Fort Washington
is approved by a vote of a majority of the outstanding voting securities of the
Fund (as defined in Section 2(a)(42) of the 1940 Act) prior to the expiration of
the Interim Sub-Advisory Agreement, the total amount in the escrow account
(including interest earned) will be paid to Fort Washington.
In the event that the New Sub-Advisory Agreement with Fort Washington
is not approved by a vote of a majority of the outstanding voting securities of
the Fund prior to the expiration of the Interim Sub-Advisory Agreement, Fort
Washington will be paid, out of the escrow account, the lesser of: (1) any costs
incurred in performing the Interim Sub-Advisory Agreement (plus interest earned
on that amount while in escrow); or (2) the total amount in the escrow account
(plus interest earned). Any balance remaining in the escrow account following
such disbursement shall be paid to Huntington.
4
<PAGE> 8
The Interim Sub-Advisory Agreement provides that it will remain in
force for 150 days or until the New Sub-Advisory Agreement is approved by a vote
of a majority of the outstanding voting securities of the Fund, whichever is
earlier. The Interim Sub-Advisory Agreement may be terminated at any time, on 10
calendar days' written notice, without the payment of any penalty, by the Board
of Trustees or by a vote of the majority of the outstanding voting securities of
the Fund, or, upon 10 calendar days' written notice by Huntington. The Interim
Sub-Advisory Agreement automatically terminates in the event of its assignment.
THE NEW SUB-ADVISORY AGREEMENT
You are being asked to approve the New Sub-Advisory Agreement between
Huntington and Fort Washington, as a result of the automatic termination of the
Second Sub-Advisory Agreement and the requirements of Rule 15a-4 regarding the
duration of the Interim Sub-Advisory Agreement. The terms and conditions of the
New Sub-Advisory Agreement are substantially identical to those of Countrywide's
Second Sub-Advisory Agreement, including with respect to duties, fees, and
standard of care. The amendment provision of the New Sub-Advisory Agreement
differs from that of the Countrywide Sub-Advisory Agreements in that all
amendments to the agreement will no longer be subject to shareholder approval.
Under the New Sub-Advisory Agreement, the Trust will only seek shareholder
approval where required by the 1940 Act.
Under the New Sub-Advisory Agreement, Fort Washington will select
portfolio securities for investment by the Fund, purchase and sell securities of
the Fund, and upon making any purchase or sale decision, place orders for the
execution of such portfolio transactions, all in accordance with the 1940 Act
and any rules thereunder, subject to instructions from Huntington, the
supervision and control of the Board of Trustees of the Trust, and the
investment objectives, policies and restrictions of the Fund.
Under the New Sub-Advisory Agreement, Fort Washington will receive from
Huntington a fee at an annual rate of 0.20% of the average daily net assets of
the Fund. This is the same fee that Countrywide received from Huntington under
its Sub-Advisory Agreements and that Huntington pays under the Interim
Sub-Advisory Agreement.
If the New Sub-Advisory Agreement is approved by shareholders of the
Fund, it will become effective upon approval. The New Sub-Advisory Agreement
provides that it will remain in force for an initial term of two years, and from
year to year thereafter, subject to annual approval by the Board of Trustees,
including a majority of the Independent Trustees, by a vote cast in person at a
meeting called for the purpose of voting such approval. The New Sub-Advisory
Agreement may be terminated at any time, on 60 days' written notice, without the
payment of any penalty, by the Board of Trustees or by a vote of the majority of
the outstanding voting securities of the Fund, or, upon 120 days' written notice
by Huntington or Fort Washington. The New Sub-Advisory Agreement automatically
terminates in the event of its assignment.
5
<PAGE> 9
The form of the New Sub-Advisory Agreement for the Fund, marked to show
changes from the Second Countrywide Sub-Advisory Agreement, is attached as
Exhibit A. You should read the agreement. The description in this Proxy
Statement of the New Sub-Advisory Agreement is only a summary.
In the event that shareholders of the Fund do not approve the proposed
New Sub-Advisory Agreement, the Interim Sub-Advisory Agreement will
automatically terminate on September 28, 2000 and the Board of Trustees will
promptly take such actions as they consider are in the best interests of the
shareholders. These actions could include (i) choosing not to appoint a
sub-adviser for the Fund; or (ii) liquidating the Fund.
INFORMATION CONCERNING FORT WASHINGTON
Fort Washington, located at 420 East Fourth Street, Cincinnati, Ohio
45202, is part of The Western-Southern Enterprise, a dynamic group of financial
services companies owned by The Western and Southern Life Insurance Company,
located at 400 Broadway, Cincinnati, Ohio 45202. Fort Washington is a
wholly-owned subsidiary of The Western and Southern Life Insurance Company. The
Western-Southern Enterprise provides life insurance, annuities, mutual funds,
business planning insurance, health insurance, asset management and other
related financial services for millions of customers nationwide. Founded in
1888, The Western and Southern Life Insurance Company is a strong organization
with solid values, a rich heritage and an exciting future and holds the highest
ratings for claims paying ability awarded by three independent insurance rating
agencies.
As a full-service registered investment advisory firm, Fort Washington
offers professional and comprehensive investment management services for
foundations and endowments, corporate pension funds, insurance companies, mutual
funds, colleges and universities, religious organizations and high net worth
individuals. As of December 31, 1999, Fort Washington had assets under
management exceeding $12.9 billion.
The table below gives the name, address and principal occupation of
each current director and principal executive officer of Fort Washington.
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS FORT WASHINGTON
<S> <C> <C>
William J. Williams Chairman and Director Chairman of the Board of The Western
400 Broadway and Southern Life Insurance Company
Cincinnati, OH 45202
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS FORT WASHINGTON
<S> <C> <C>
William Francis Ledwin President and Director President and Director of Touchstone
420 East Fourth Street Advisors; Director of Countrywide
Cincinnati, OH 45202 Investments; Vice President and Chief
Investment Officer of Columbus Life
Insurance Company; Senior Vice
President and Chief Investment Officer
of The Western and Southern Life
Insurance Company
James J. Vance Vice President and Vice President and Treasurer of The
400 Broadway Treasurer Western and Southern Life Insurance
Cincinnati, OH 45202 Company
</TABLE>
In addition to serving as sub-adviser to the Fund, Fort Washington
serves as sub-adviser to several other investment companies which are not
affiliated with the Trust, including Touchstone Florida Tax-Free Money Fund
(formerly known as the Countrywide Florida Tax-Free Money Fund) (the "Touchstone
Fund"), a series of Touchstone Tax-Free Trust (formerly known as Countrywide
Tax-Free Trust) whose investment objective is similar to that of the Fund. As of
May 11, 2000, the Touchstone Fund had net assets of $18.5 million. Fort
Washington receives, for its sub-advisory services provided to the Touchstone
Fund, an annual fee based on the average daily net assets of the fund of: 0.50%
up to $100 million; 0.45% from $100 million to $200 million; 0.40% from $200
million to $300 million; and 0.375% over $300 million. Prior to May 1, 2000,
Countrywide served as the investment adviser to the Touchstone Fund under the
same fee schedule as Fort Washington. In each of the fiscal year ended June 30,
1999 and the six months ended December 31, 1999, Countrywide waived a portion of
its fee equal to 0.23% of the average daily net assets of the Touchstone Fund.
INFORMATION CONCERNING HUNTINGTON
Huntington is a wholly-owned subsidiary of Huntington Bancshares, Inc.
("HBI"). With approximately $28.7 billion in assets as of December 31, 1999, HBI
is a major Midwest regional bank holding company. Through its subsidiaries and
affiliates, HBI offers a full range of services to the public, including
commercial lending, depository services, cash management, brokerage services,
retail banking, international services, mortgage banking, investment advisory
services and trust services. Huntington, a recognized investment advisory and
fiduciary services entity, provides investment advisory services for corporate,
charitable, governmental, institutional, personal trust and other assets.
Huntington is responsible for $22.0 billion of assets as of December 31, 1999,
and has investment discretion over approximately $8.8 billion of that amount.
Huntington has served as
7
<PAGE> 11
investment adviser to The Huntington Funds (formerly known as The Monitor Funds)
since 1987, and has over 75 years of experience providing investment advisory
services to fiduciary accounts.
Set forth below are the names and principal occupations of the
directors and the principal executive officers of Huntington. The address for
each of the persons named below is 41 South High Street, Columbus, Ohio 43215.
<TABLE>
<CAPTION>
POSITION WITH
NAME HUNTINGTON PRINCIPAL OCCUPATION
<S> <C> <C>
Friedrich K.M. Bohm Director Chairman, NBBJ East Limited
Partnership
Douglas G. Borror Director President and Chief Executive
Officer, Dominion Homes, Inc.
Richard A. Cheap Executive Vice President, Executive Vice President, General
General Counsel, Counsel, Secretary and Cashier,
Secretary and Cashier Huntington
Anne Creek Treasurer Treasurer, Huntington
Peter H. Edwards Director Chairman, Edwards Companies
Douglas E. Fairbanks Director Retired; formerly Vice President,
Ameritech
Ralph K. Frasier Director Retired
Peter E. Geier Director, President and President and Chief Operating
Chief Operating Officer Officer, Huntington
Elaine H. Hairston Director Retired; formerly Chancellor, Ohio
Board of Regents
Edgar W. Ingram III Director President and Chief Executive
Officer, White Castle Systems, Inc.
Pete A. Klisares Director President and Chief Operating
Officer, Karrington, Inc.
Robert W. Rahal Director President and Chief Executive
Officer, Team Rahal, Inc.
John B. Schulze Director Chairman, President and Chief
Executive Officer, The Lamson &
Sessions Co.
Ronald J. Seiffert Director and Vice Vice Chairman, Huntington
Chairman
</TABLE>
8
<PAGE> 12
<TABLE>
<CAPTION>
POSITION WITH
NAME HUNTINGTON PRINCIPAL OCCUPATION
<S> <C> <C>
J. Richard Sisson Director Senior Advisor to the President, The
Ohio State University
Rodney Wasserstrom Director President and Chief Executive
Officer, The Wasserstrom Company
William J. Williams Director Retired; formerly Chairman,
Huntington
William S. Williams Director Retired; formerly Vice Chairman
and Chief Executive Officer, The
W.W. Williams Co., Inc.
Frank Wobst Director, Chairman and Chairman, President and Chief
Chief Executive Officer Executive Officer, HBI
Helen K. Wright Director Retired
</TABLE>
As noted above, Huntington is wholly-owned by HBI. No person owns, of
record or beneficially, 10% or more of any outstanding voting securities of HBI.
INFORMATION CONCERNING THE DISTRIBUTOR, ADMINISTRATOR AND SUB-ADMINISTRATOR
In addition to Huntington's role as investment adviser to the Fund,
Huntington serves as administrator to The Huntington Funds. SEI Investments
Mutual Fund Services, located at One Freedom Valley Road, Oaks, Pennsylvania
19456, serves as sub-administrator. SEI Investments Distribution Co., an
affiliate of SEI Investments Mutual Fund Services which is also located at One
Freedom Valley Road, Oaks, Pennsylvania 19456, serves as the distributor of The
Huntington Funds.
EVALUATION BY THE BOARD OF TRUSTEES
On April 26, 2000, the Board of Trustees, including all of the
Independent Trustees, by vote cast in person, unanimously approved the New
Sub-Advisory Agreement and directed that it be submitted to the shareholders of
the Fund for their approval. Prior to such approval, the Independent Trustees
consulted with their counsel, who did not represent Countrywide or Fort
Washington and/or their affiliates, to advise them with respect to their
responsibilities under state and federal law in reaching a determination with
respect to the New Sub-Advisory Agreement and related matters. In addition, the
Independent Trustees reviewed various materials provided on behalf of Fort
Washington by The Western and Southern Life Insurance Company or its affiliates
("Western Southern") at the request of the Independent Trustees and other
relevant information.
9
<PAGE> 13
Included among these materials were: (i) financial statements of Fort
Washington; (ii) information concerning the personnel and operations of Fort
Washington; (iii) biographical information concerning the directors and officers
of Fort Washington, and the investment management personnel of Fort Washington;
(iv) a form of proposed sub-advisory agreement and a comparison of such
agreement to the one currently in effect for the Fund; (v) information
pertaining to the composition of the Fund's investment portfolios and any
proposed changes in investment practices or techniques following consummation of
the transaction; and (vi) information pertaining to proposed sub-advisory fees.
In determining to recommend approval of the new sub-advisory agreement
to shareholders, the Independent Trustees, separately, and the entire Board of
Trustees considered the following factors, among others:
1. Fort Washington's commitment to the development and expansion
of its investment advisory business;
2. the sub-advisory fees and sub-advisory services to be
performed under the new sub-advisory agreement are the same as
those under the existing sub-advisory agreement, and the other
terms of the agreement are identical in all material respects,
except for the dates of its execution, effectiveness and
termination;
3. there are no changes contemplated in the objectives and
policies of the Fund, and the proposed transaction will not
materially affect the level or quality of advisory services
currently provided to the Fund;
4. the performance of the Fund as compared to similar mutual
funds and other comparable indices; and
5. the fact that Fort Washington or Countrywide, and not the
Fund, will bear the expenses of the transaction and any costs
of preparing and mailing proxy materials to shareholders.
As a result of their considerations, the Board of Trustees, including
all of the Independent Trustees, determined that the new sub-advisory agreement
would be in the best interests of the Fund and its shareholders. Accordingly,
the Board of Trustees unanimously approved the new sub-advisory agreement and
voted to recommend it to shareholders for approval.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
APPROVE THE NEW SUB-ADVISORY AGREEMENT.
10
<PAGE> 14
THE PROXY
The Board of Trustees solicits proxies so that each shareholder has the
opportunity to vote on each proposal to be considered at the meeting. A proxy
for voting your shares at the meeting is enclosed. Your proxy, if properly
executed, duly returned and not revoked, will be voted according to the
instructions on the proxy. A proxy which is properly executed that has no voting
instructions with respect to a proposal will be voted for that proposal. In
addition, proxies will be voted in the discretion of the proxy holders, in
accordance with the recommendations of the Board of Trustees, if any, on any
matter to come before the meeting that the Trust did not have notice of a
reasonable time prior to the mailing of this Proxy Statement. You may revoke
your proxy at any time before it is exercised by (1) filing a written
notification of revocation with the Secretary of the Trust, (2) submitting a
proxy bearing a later date, or (3) attending and voting at the meeting.
COST OF SOLICITATION
The Trust, with assistance from Fort Washington and Countrywide, will
be responsible for soliciting proxies for the special meeting. Together, the
Trust, Fort Washington and Countrywide will be responsible for printing proxies,
mailing proxy material to shareholders, soliciting brokers, custodians, nominees
and fiduciaries, tabulating the returned proxies and performing other proxy
solicitation services. The anticipated cost of such services is approximately
$20,000, and will be paid by Fort Washington or Countrywide. Fort Washington or
Countrywide will also pay the printing, postage and any other costs of the
solicitation.
In addition to solicitation through the mail, proxies may be solicited
by officers, employees and agents of the Trust without cost to the Trust. Such
solicitation may be by telephone, facsimile or otherwise. Fort Washington or
Countrywide will reimburse brokers, custodians, nominees and fiduciaries for the
reasonable expenses incurred by them in connection with forwarding solicitation
material to the beneficial owners of shares held of record by such persons
OUTSTANDING SHARES AND VOTING REQUIREMENTS
RECORD DATE
The Board of Trustees has fixed the close of business on May 9, 2000
as the record date for determining the shareholders entitled to notice of and to
vote at the special meeting of shareholders or any adjournment thereof. As of
the record date there were 39,161,014.37 shares of beneficial interest, no par
value, of the Fund outstanding, comprised of 16,394,761.45 Investment A Shares
and 22,766,252.92 Trust Shares. All full shares of the Fund are entitled to one
vote, with proportionate voting for fractional shares.
11
<PAGE> 15
VOTING; QUORUM
The vote of a majority of the outstanding shares of the Fund is
required for approval of the new sub-advisory agreement (Proposal 1 above). The
vote of a majority of the outstanding shares for purposes of Proposal 1 means
the vote of the lesser of (1) 67% or more of the shares present or represented
by proxy at the meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or (2) more than 50% of the
outstanding shares. In order to constitute a quorum for the purpose of voting on
Proposal 1, there must be present in person or by proxy, more than 50% of the
outstanding shares of the Fund.
If the meeting is called to order but a quorum is not represented at
the meeting, the persons named as proxies may vote the proxies which have been
received to adjourn the meeting to a later date. If a quorum is present at the
meeting but sufficient votes to approve Proposal 1 are not received, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the meeting in
person or by proxy. The proxy holders will vote those proxies received which
voted in favor of the proposal in favor of such an adjournment and will vote
those proxies received which voted against the proposal against any such
adjournment. A shareholder vote may be taken on one or more of the proposals in
this proxy statement prior to any such adjournment if sufficient votes have been
received and it is otherwise appropriate. Abstentions and "broker non-votes" are
counted for purposes of determining whether a quorum is present but do not
represent votes cast with respect to a proposal. "Broker non-votes'" are shares
held by a broker or nominee for which an executed proxy is received by the
Trust, but are not voted as to one or more proposals because instructions have
not been received from the beneficial owners or persons entitled to vote and the
broker or nominee does not have discretionary voting power. Accordingly, "broker
non-votes" and abstentions effectively will be a vote against Proposal 1.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
On May 9, 2000, the following persons owned beneficially 5% or more of
the outstanding shares of the Fund:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
NAME AND ADDRESS SHARES OF FUND
<S> <C> <C>
</TABLE>
[insert 5% beneficial owners]
No other person owned of record and, according to information
available to the Trust, no other person owned beneficially, 5% or more of the
outstanding shares of the Trust (or any Fund) on the record date. In addition,
as of the record date, the Trustees and officers of the Fund as a group owned
less than 1% of the shares of the Trust or the Fund.
12
<PAGE> 16
SHAREHOLDER PROPOSALS
Under the proxy rules of the Securities and Exchange Commission,
shareholder proposals may, under certain conditions, be included in the Trust's
proxy statement and proxy for a particular meeting. Under these rules, proposals
submitted for inclusion in the Trust's proxy material must be received by the
Trust a reasonable time before the solicitation is made. You should be aware
that annual meetings of shareholders are not required as long as there is no
particular requirement under the Investment Company Act which must be met by
convening such a shareholder meeting.
OTHER BUSINESS
The proxy holders have no present intention of bringing any matter
before the meeting other than those specifically referred to above or matters in
connection with or for the purpose of effecting the same. Neither the proxy
holders nor the Board of Trustees are aware of any matters which may be
presented by others. If any other business shall properly come before the
meeting, the proxy in the accompanying form will confer upon the person or
persons entitled to vote the shares as to any other proxy holders intend to vote
thereon in accordance with their best judgment.
A COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER
31, 1999, IS AVAILABLE WITHOUT CHARGE UPON REQUEST BY WRITING TO THE HUNTINGTON
FUNDS, 41 SOUTH HIGH STREET, COLUMBUS, OHIO 42387, OR BY CALLING 1-800-253-0412.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees,
James R. Foggo, Secretary
May 30, 2000
13
<PAGE> 17
EXHIBIT A
Additions are shown in bold, double underline (all caps)
Deletions are shown in strikeout (brackets [ ])
THE HUNTINGTON FUNDS
SUB-ADVISORY AGREEMENT
HUNTINGTON FLORIDA TAX-FREE MONEY FUND
THIS AGREEMENT is made between The Huntington National Bank, a
national banking association (hereinafter referred to as "Adviser") and
[Countrywide Investments] FORT WASHINGTON INVESTMENT ADVISORS, INC. a registered
investment adviser located in Cincinnati, Ohio (hereinafter referred to as the
"Sub-Adviser").
W I T N E S S E T H:
That the parties hereto, intending to be legally bound hereby agree as
follows:
1. Sub-Adviser hereby agrees to furnish to Adviser in its capacity as
investment adviser to the Huntington Florida Tax-Free Money Fund (the "Fund"), a
portfolio of The Huntington Funds ("Trust"), such investment advice, statistical
and other factual information, as may from time to time be reasonably requested
by Adviser for the Fund which may be offered in one or more classes of shares.
2. For its services under this Agreement, Sub-Adviser shall receive
from Adviser a monthly fee, as set forth in Exhibit A hereto.
3. This Agreement shall be effective as of the date [of the closing
of the proposed acquisition of Countrywide Financial Services, Inc., the parent
corporation of the Sub-Adviser, by Fort Washington Investment Advisors, Inc.] IT
IS APPROVED BY THE HOLDERS OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES
(AS DEFINED IN SECTION 2(A)(42) OF THE INVESTMENT COMPANY ACT OF 1940) OF THE
FUND. This Agreement shall remain in effect for the Fund for two years from the
date of its effectiveness and from year to year thereafter, subject to the
provisions for termination and all of the other terms and conditions hereof if:
(a) such continuation shall be specifically approved at least annually by the
vote of a majority of the Trustees of the Trust, including a majority of the
Trustees who are not parties to this Agreement or interested persons of any such
party (other than as Trustees of the Trust) cast in person at a meeting called
for that purpose; and (b) Adviser shall not have notified the Trust in writing
at least sixty (60) days prior to the anniversary date of this Agreement in any
year thereafter that it does not desire such continuation with respect to the
Fund.
4. Notwithstanding any provision in this Agreement, it may be
terminated at any time without the payment of any penalty: (a) by the Trustees
of the Trust or by a vote of a majority of the outstanding voting securities (as
defined in Section 2(a) (42) of the Act) of the Fund on sixty (60) days written
notice to the Adviser; or (b) by Sub-Adviser or Adviser upon 120 days written
notice to the other party to the Agreement.
<PAGE> 18
5. This Agreement shall automatically terminate: (a) in the event of
its assignment (as defined in the Investment Company Act of 1940); or (b) in the
event of termination of the Investment Advisory Agreement between the Trust and
the Adviser as to the Fund (the "Investment Advisory Agreement") for any reason
whatsoever.
6. So long as both Adviser and Sub-Adviser shall be legally qualified
to act as an investment adviser to the Fund, neither Adviser nor Sub-Adviser
shall act as an investment adviser (as such term is defined in the Investment
Company Act of 1940) to the Fund except as provided herein and in the Investment
Advisory Agreement or in such other manner as may be expressly agreed between
Adviser and Sub-Adviser.
Provided, however, that if the Adviser or Sub-Adviser shall resign
prior to the end of any term of this Agreement or for any reason be unable or
unwilling to serve for a successive term which has been approved by the Trustees
of the Trust pursuant to the provisions of Paragraph 3 of this Agreement or
pursuant to the Investment Advisory Agreement, the remaining party, Sub-Adviser
or Adviser as the case may be, shall not be prohibited from serving as an
investment adviser to such Fund by reason of the provisions of this Paragraph 6.
7. This Agreement may be amended from time to time by agreement of the
parties hereto provided that such amendment shall be approved both by the vote
of a majority of Trustees of the Trust, including a majority of Trustees who are
not parties to this Agreement or interested persons, as defined in Section
2(a)(19) of the Investment Company Act of 1940, of any such party at a meeting
called for that purpose, and, WHERE REQUIRED BY THE INVESTMENT COMPANY ACT OF
1940, by the holders of a majority of the outstanding voting securities (as
defined in Section 2(a)(42) of the Investment Company Act of 1940) of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by their duly authorized officers, as of this ____
day of [October, 1999] JUNE, 2000.
ATTEST: The Huntington National Bank
_______________________________ By: _____________________________________
[Countrywide Investments, Inc.]
FORT WASHINGTON INVESTMENT ADVISORS, INC.
_______________________________ By: _____________________________________
16
<PAGE> 19
EXHIBIT A
THE HUNTINGTON FUNDS
HUNTINGTON FLORIDA TAX-FREE MONEY FUND
SUB-ADVISORY AGREEMENT
For all services rendered by Sub-Adviser hereunder, Adviser shall pay
Sub-Adviser at the end of each month a Sub-Advisory Fee equal to the annual rate
of 0.20% of the average daily net assets ("Net Assets") of the Fund during such
month.
This Exhibit duly incorporates by reference the Sub-Advisory
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by their duly authorized officers, as of this ____
day of [October, 1999] JUNE, 2000.
ATTEST: The Huntington National Bank
________________________________ By: __________________________________
[Countrywide Investments, Inc.]
FORT WASHINGTON INVESTMENT ADVISORS, INC.
________________________________ By: __________________________________
<PAGE> 20
PROXY PROXY
Huntington Florida Tax-Free Money Fund
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
To be held June ___, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE HUNTINGTON
FUNDS
The undersigned hereby appoints Mark Nagle and James R. Foggo, or
either one of them, proxies with full power of substitution to vote as
designated below all shares of beneficial interest of the Huntington Florida
Tax-Free Money Fund that the undersigned is entitled to vote at a Special
Meeting of Shareholders of Huntington Florida Tax-Free Money Fund to be held on
Wednesday, June ___, 2000, or at any adjournment or adjournments thereof, as
follows:
1. On the proposal to approve a new sub-advisory agreement between The
Huntington National Bank and Fort Washington Investment Advisors, Inc., as more
fully set forth in the Fund's Notice of Special Meeting of Shareholders and
Proxy Statement dated May 30, 2000, receipt of which is hereby acknowledged:
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
2. Discretionary authority, to the extent permitted by law, is hereby conferred
as to any other matters as may properly come before the meeting.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED ABOVE. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEM 1
ABOVE. The undersigned ratifies all that the proxies or any of them or their
substitutes may lawfully do or cause to be done by virtue hereof and revokes all
former proxies.
[Insert Shareholder Information]
________________________________ ________________________
Signature of Shareholder Signature of Shareholder
Dated: _________________________, 2000
Please sign this proxy exactly as your name(s) appears on this proxy card. If
shares are registered in the names of two or more persons, each must sign.
Executors, administrators, trustees, guardians, attorneys and corporate officers
should add their titles. If a corporation, please sign in full corporate name
and indicate the signer's office. If a partner, please sign the partnership
name.
IMPORTANT: PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY IN THE ENVELOPE
PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
