<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
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
The Parkstone Group of Funds - - SEC File Nos. 33-13283 811-5105
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
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(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
July ___, 1998
Dear Parkstone Group of Funds Shareholder:
You are invited to attend the Special Meeting of Shareholders of Parkstone
Group of Funds on August 13, 1998. The meeting is being held at the offices of
BISYS Fund Services Limited Partnership, 3435 Stelzer Road, Columbus, Ohio
43219 at ____ a.m. Eastern Time.
As a Parkstone shareholder, you are not required to attend the shareholder
meeting; however, you are strongly encouraged to exercise your vote. Your vote
is important no matter how many shares you own. A proxy package has been
enclosed outlining the proposed changes to the Parkstone Group of Funds, which
include the approval of:
- - Election of the Board of Trustees
- - Changes to the fundamental investment objectives of the funds
- - Changes which make uniform among the funds the fundamental investment
limitations
- - Changes in the classification of fundamental investment objectives,
policies and limitations to non-fundamental
For those who are unable to attend the meeting, please note that you have
received one proxy card for each fund you own. A postage-paid reply envelope
has been enclosed for you to return your signed and dated proxy vote. It is
important that we receive your vote(s) prior to the meeting.
If you have questions, please contact your trust administrator, financial
consultant or call 1-800-451-8377. Thank you in advance for your cooperation.
Sincerely,
John B. Rapp
Chairman
The Parkstone Group of Funds
<PAGE> 3
THE PARKSTONE GROUP OF FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 13, 1998
JULY 2, 1998
TO THE SHAREHOLDERS OF
THE PARKSTONE GROUP OF FUNDS:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of each of the Funds listed below (each, a "Fund" and collectively,
the "Funds") of The Parkstone Group of Funds (the "Trust") will be held on
August 13, 1998, at ____ a.m./p.m. (Eastern time), at the offices of BISYS Fund
Services Limited Partnership, 3435 Stelzer Road, Columbus, Ohio 43219.
The Funds of the Trust are: the Small Capitalization Fund, Mid
Capitalization Fund, Large Capitalization Fund, International Discovery Fund,
Equity Income Fund, Conservative Allocation Fund, Balanced Allocation Fund,
Aggressive Allocation Fund, Bond Fund, Limited Maturity Bond Fund, Intermediate
Government Obligations Fund, U.S. Government Income Fund, Municipal Bond Fund,
Michigan Municipal Bond Fund, Prime Obligations Fund, U.S. Government
Obligations Fund, Treasury Fund and Tax-Free Fund.
The Meeting will be held with respect to the Funds for the following
purposes:
PROPOSAL 1. To elect eight (8) nominees to the Board of Trustees.
PROPOSAL 2. To approve a change in each Fund's fundamental investment
objective to make such objective non-fundamental.
PROPOSAL 3. To approve changes to the following fundamental
investment limitations of the Funds:
(a) limitation on underwriting activities;
(b) limitation on real estate related transactions;
(c) limitation on investment in commodities;
<PAGE> 4
(d) limitation regarding industry concentration;
(e) limitation on loans;
(f) limitation on borrowing and the issuance of senior
securities; and
(g) limitation on issuer diversification (inapplicable to
Michigan Municipal Bond Fund).
PROPOSAL 4. To approve a change in the following
fundamental investment policies and
limitations to make such policies and
limitations non-fundamental:
(a) with respect to the Funds, the limitation on purchasing
securities on margin;
(b) with respect to the Funds, the limitation on writing or
selling call options; and
(c) with respect to the Michigan Municipal Bond Fund, which is
classified as a non-diversified fund under the Investment
Company Act of 1940, as amended, the limitation regarding
investments in securities of any one issuer.
PROPOSAL 5. To transact such other business as may properly come
before the Meeting or any adjournment thereof.
The Proposals stated above are discussed in detail in the attached Proxy
Statement. Shareholders of record as of the close of business on June 12, 1998
are entitled to notice of, and to vote at, the Meeting or any adjournment
thereof.
YOUR TRUSTEES UNANIMOUSLY RECOMMEND
THAT YOU VOTE IN FAVOR OF THE PROPOSALS.
-2-
<PAGE> 5
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE THE ACCOMPANYING PROXY CARD OR CARDS WHICH ARE BEING SOLICITED
BY THE TRUST'S BOARD OF TRUSTEES. YOU MAY ALSO FAX YOUR VOTED CARD(S) TO
1-888-451-8683 TO REGISTER YOUR VOTE. THIS IS IMPORTANT FOR THE PURPOSE OF
ENSURING A QUORUM AT THE MEETING. A PROXY MAY BE REVOKED BY ANY SHAREHOLDER AT
ANY TIME BEFORE IT IS EXERCISED BY EXECUTING AND SUBMITTING A REVISED PROXY, BY
GIVING WRITTEN NOTICE OF REVOCATION TO THE TRUST'S SECRETARY, OR BY WITHDRAWING
THE PROXY AND VOTING IN PERSON AT THE MEETING.
---------------------------
W. Bruce McConnel, III
Secretary
July 2, 1998
<PAGE> 6
THE PARKSTONE GROUP OF FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees (the "Board") of The Parkstone Group of
Funds (the "Trust") for use at the Special Meeting of Shareholders of the Trust
and any adjournment(s) thereof (the "Meeting") to be held on August 13, 1998 at
____ a.m./p.m. (Eastern time), at the offices of BISYS Fund Services Limited
Partnership, 3435 Stelzer Road, Columbus, Ohio 43219. This Proxy Statement and
accompanying proxy card or cards will first be mailed on or about July 2, 1998.
The Trust currently offers eighteen (18) investment portfolios which
are each referred to herein as a "Fund" and collectively, as the "Funds." The
Funds of the Trust are: the Small Capitalization Fund, Mid Capitalization Fund,
Large Capitalization Fund, International Discovery Fund, Equity Income Fund,
Conservative Allocation Fund, Balanced Allocation Fund, Aggressive Allocation
Fund, Bond Fund, Limited Maturity Bond Fund, Intermediate Government Obligations
Fund, U.S. Government Income Fund, Municipal Bond Fund, Michigan Municipal Bond
Fund, Prime Obligations Fund, U.S. Government Obligations Fund, Treasury Fund
and Tax-Free Fund.
Only shareholders of record of the Funds at the close of business on
June 12, 1998 will be entitled to notice of, and to vote at the Meeting. Each
shareholder of record on that date is entitled to one vote for each dollar of
net asset value and a proportionate fractional vote for any fraction of one
dollar of net asset value as to each proposal on which such shareholder is
entitled to vote. The Funds' shares are referred to herein as "Shares."
The following table summarizes the Proposals to be voted on at the
Meeting and indicates those shareholders who are being solicited with respect to
each Proposal:
<PAGE> 7
TABLE
<TABLE>
<CAPTION>
PROPOSAL SHAREHOLDERS SOLICITED
-------- ----------------------
<C> <S> <C>
1. To elect eight (8) nominees to the Board of All Funds of the Trust. All shareholders of all Funds
Trustees. of the Trust will vote together.
2. To approve a change in each Fund's All Funds, each voting separately as
fundamental investment objective to make such a Fund.
objective non-fundamental.
3. To approve changes to the following fundamental
investment limitations of the Funds:
(a) limitation on underwriting All Funds, each voting separately as a Fund.
activities;
(b) limitation on real estate related All Funds, each voting separately as a Fund.
transactions;
(c) limitation on investment in All Funds, each voting separately as a Fund.
commodities;
(d) limitation regarding industry All Funds, each voting separately as a Fund.
concentration;
(e) limitation on loans; All Funds, each voting separately as a Fund.
(f) limitation on borrowing and the All Funds, each voting separately as a Fund.
issuance of senior securities; and
(g) limitation on issuer
diversification. All Funds, except the Michigan Municipal
Bond Fund, each voting separately as a
Fund.
4. To approve a change in the following
fundamental investment policies and
limitations of the Funds indicated below to
make
</TABLE>
-2-
<PAGE> 8
<TABLE>
<CAPTION>
PROPOSAL SHAREHOLDERS SOLICITED
-------- ----------------------
<C> <S> <C>
such policies and limitations non-fundamental:
(a) limitation on purchasing securities All Funds, each voting separately as a Fund.
on margin;
(b) limitation on writing or selling All Funds, each voting separately as a Fund.
call options; and
(c) with respect to the Michigan Municipal Shareholders of the Michigan Municipal Bond Fund only.
Bond, Fund, which is classified as a
non-diversified fund under the Investment
Company Act of 1940, as amended (the "1940
Act"), the limitation regarding investments
in securities of any one issuer.
5. To transact such other business as may Any and/or all Funds, voting together or each voting
properly come before the Meeting or any separately as a Fund, as the circumstances may dictate.
adjournment(s) thereof.
</TABLE>
Although shares of each of the Funds have been divided into one or
more classes ("Classes"), which Classes differ primarily with respect to the
expenses borne solely by the particular Class under a distribution and
shareholder service plan, if any, adopted by such Class pursuant to Rule 12b-1
under the 1940 Act, none of the proposals to be presented at the Meeting, as
described in this Proxy Statement, involve a separate vote by a single Class of
Shares.
The following table sets forth, by Fund and as of the record date, the
number of Shares of each of the Funds which were outstanding and entitled to
vote and the number of votes per Share to which a shareholder of each such Fund
is entitled:
On June 12, 1998, the following Shares were outstanding and entitled to
notice of, and to vote at the Meeting:
-3-
<PAGE> 9
<TABLE>
<CAPTION>
FUND SHARES OUTSTANDING AGGREGATE NET NET ASSET VALUE VOTES
---- AS OF JUNE 12, 1998 ASSET VALUE AS PER SHARE AS OF PER
------------------- OF JUNE 12, 1998 JUNE 12, 1998 SHARE
---------------- ------------- -----
<S> <C> <C> <C> <C>
Small Capitalization Fund
Mid Capitalization Fund
Large Capitalization Fund
International Discovery Fund
Equity Income Fund
Conservative Allocation Fund
Balanced Allocation Fund
Aggressive Allocation Fund
Bond Fund
Limited Maturity Bond Fund
Intermediate Government
Obligations Fund
U.S. Government Income Fund
</TABLE>
-4-
<PAGE> 10
<TABLE>
<S> <C> <C> <C> <C>
Municipal Bond Fund
Michigan Municipal Bond Fund
Prime Obligations Fund
U.S. Government Obligations Fund
Treasury Fund
Tax-Free Fund
</TABLE>
Proxy solicitations will be made primarily by mail, but proxy
solicitations also may be made by telephone, facsimile, telegraph or personal
interview. The Trust will bear all proxy solicitation costs. Any shareholder
submitting a proxy may revoke it at any time before it is exercised by
submitting to the Trust a written notice of revocation or a subsequently
executed proxy or by attending the Meeting and voting in person.
The Board of Trustees intends to bring before the meeting the matters
set forth in items 1, 2, 3 and 4 in the foregoing notice. The persons named in
the enclosed proxy and acting thereunder will vote with respect to items 1, 2,
3, and 4 in accordance with the directions of the shareholders as specified on
the proxy card. If no choice is specified, the Shares will be voted IN FAVOR of
the election of the eight nominees to the Board of Trustees described in
proposal 1, IN FAVOR of the proposal to change each Fund's fundamental
investment objective to make such objective non-fundamental, as described in
proposal 2, IN FAVOR of the proposal to approve certain changes to investment
limitations of the Funds as described in proposal 3 and IN FAVOR of the proposal
to make certain fundamental investment policies and limitations non-fundamental
as described in proposal 4. If any other matters are properly presented to the
meeting for action, it is intended that the persons named in the enclosed proxy
and acting thereunder will vote in accordance with the views of management
thereon.
ADDITIONAL INFORMATION
BENEFICIAL OWNERS OF THE TRUST.
- -------------------------------
-5-
<PAGE> 11
The beneficial owners of more than 5% of the outstanding Shares of any
Fund as of the record date, known to the Trust, are as follows:
<TABLE>
<CAPTION>
NAME AND PERCENT
ADDRESS OF NUMBER OF OF
NAME OF FUND BENEFICIAL OWNER SHARES OWNED FUND
- ------------ ---------------- ------------ ----
<S> <C> <C> <C>
</TABLE>
All of these Shares were beneficially owned by the record owners named
above because they possessed or shared investment or voting power with respect
to them while owning the Shares or while acting in a fiduciary, advisory,
custodial, or other similar capacity on behalf of their customers.
For purposes of the 1940 Act, any person who owns directly or through
one or more controlled companies more than 25 percent of the voting securities
of a company is presumed to "control" such company. Under this definition,
National City Corporation and its affiliates may be deemed to be controlling
persons of the Trust.
QUORUM.
- -------
In the event that a quorum is not present at the Meeting, or in the
event that a quorum is present at the Meeting but sufficient votes to approve a
particular Proposal are not received, the persons named as proxies, or their
substitutes, may propose one or more adjournments of the Meeting to permit
further solicitation of the proxies. Any such adjournment will require the
affirmative vote of a majority of those Shares affected by the adjournment that
are represented at the Meeting in person or by proxy. If a quorum is present,
the persons named as proxies will vote those proxies which they are entitled to
vote FOR the Proposal in favor of such adjournments, and will vote those proxies
required to be voted AGAINST such Proposal against any adjournment. A
shareholder vote may be taken with respect to the Trust or one or more of the
Funds on any of the (but not all) Proposals prior to any such adjournment as to
which sufficient votes have been received for approval. A quorum is constituted
with respect to the Trust and each of the Funds by the presence in person or by
proxy of the holders of more than 50% of the outstanding Shares thereof entitled
to vote at the Meeting. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions, but not broker "non-votes"
(that is, proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owner
-6-
<PAGE> 12
or other persons entitled to vote Shares on a particular matter with respect to
which the brokers or nominees do not have discretionary power), will be treated
as Shares that are present at the Meeting but which have not been voted.
Abstentions and broker "non-votes" will have the effect of a "no" vote for
purposes of obtaining the requisite approval of each Proposal other than the
election of trustees.
National City Corporation and its bank subsidiaries hold shares for the
benefit of their customers and may be considered controlling persons of the
Trust for purposes of certain federal securities laws. National City Corporation
and its subsidiaries intend to vote Shares over which they have voting authority
pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA") in the
best interests of the plan participants. With respect to Shares over which
National City Corporation and its subsidiaries possess voting authority, but
which are not subject to ERISA, National City Corporation and its subsidiaries
will vote such Shares in the same proportion as the votes cast by other
shareholders.
THE TRUST WILL FURNISH TO SHAREHOLDERS UPON REQUEST, WITHOUT CHARGE,
COPIES OF ITS ANNUAL REPORT TO SHAREHOLDERS, CONTAINING AUDITED FINANCIAL
STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 1997 AND SEMI-ANNUAL REPORT TO
SHAREHOLDERS, CONTAINING UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED
DECEMBER 31, 1997. REQUESTS FOR COPIES OF THE ANNUAL AND SEMI-ANNUAL REPORTS
SHOULD BE DIRECTED TO THE TRUST C/O [NAME] AT THE ADDRESS AT THE BEGINNING OF
THIS DOCUMENT OR BY TELEPHONE AT 1-800-451-8377. THE ANNUAL AND SEMI-ANNUAL
REPORTS ARE NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WISH YOUR SHARES
TO BE VOTED, PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD OR CARDS AND MAIL THE
SAME IN THE ENCLOSED REPLY ENVELOPE. YOU MAY ALSO FAX YOUR VOTED CARD(S) TO
1-888-451-8683 TO REGISTER YOUR VOTE. PLEASE ALLOW SUFFICIENT TIME FOR THE PROXY
CARD OR CARDS TO BE RECEIVED ON OR BEFORE 5:00 P.M., EASTERN TIME, ON AUGUST 12,
1998.
PROPOSAL 1: ELECTION OF TRUSTEES
BACKGROUND.
- -----------
Eight trustees, constituting the entire Board of Trustees, are to be
elected at the Meeting. Each trustee so elected will hold office effective
following the end of the next regular board meeting of the incumbent trustees,
currently scheduled for August 14, 1998, until the next meeting of shareholders
and until his successor is elected and qualifies, or until his term as a trustee
is terminated as provided in the Trust's Code of
-7-
<PAGE> 13
Regulations. The persons named as proxies in the accompanying proxy have been
designated by the Board of Trustees and intend to vote for the nominees named
below.
At a meeting of the Board of Trustees on May 14, 1998, the trustees
approved a proposal whereby the current Board of Trustees would resign and,
subject to shareholder approval, eight new trustees would be elected. The
current trustees of the Trust nominated Messrs. Neary, Carter, Durkott, Farling,
Furst, Gherlein, Martens and Pullen as the trustees to be voted on by the
shareholders. Each of the nominees currently serves as a trustee to Armada
Funds. The Armada Funds are a registered open-end management investment company.
The Armada Funds are advised by National City Bank, a wholly-owned subsidiary of
National City Corporation, which is an affiliate of First of America Investment
Corporation ("First of America"), a wholly-owned subsidiary of First of America
Bank, N.A. and the investment adviser to the Funds.
The change in trustees was not based upon any disagreement with the
Trust's management or with First of America. The primary reason for the change
is the recently completed merger between First of America Bank Corporation, the
former parent corporation of First of America Bank, N.A., and National City
Corporation. First of America is now an indirect wholly-owned subsidiary of
National City Corporation. The proposed change would allow a common set of
trustees to oversee both fund complexes. In its consideration and approval of
this change, the Board of Trustees of the Trust considered the fact that it
would be economically and administratively beneficial to consolidate management
of the two fund complexes. Although there can be no assurance that any benefit
will materialize from this change, the trustees agreed to adopt one cohesive
management group.
THE NOMINEES.
- -------------
All Shares represented by valid proxies will be voted in the election
of trustees for each nominee named below, unless authority to vote for a
particular nominee is withheld. Should any nominee withdraw from the election or
otherwise be unable to serve, the named proxies will vote for the election of
such substitute nominee as the Board of Trustees may recommend unless a decision
is made to reduce the number of trustees serving on the Board. The following
table sets forth certain information about the nominees:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- ---- --- DURING PAST 5 YEARS
--------------------
<S> <C> <C>
Robert D. Neary 64 Retired Co-Chairman of Ernst & Young, April
1984-September 1993; Director, Cold Metal Products,
Inc., since March 1994; Director,
</TABLE>
-8-
<PAGE> 14
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- ---- --- DURING PAST 5 YEARS
--------------------
<S> <C> <C>
Zurn Industries, Inc. (building products and
construction services), since June 1995; Chairman
of the Board of Armada Funds since November 1996
and a trustee since August 1996.
Leigh Carter* 72 Retired President and Chief Operating Officer, B.F.
Goodrich Company, August 1986 to September 1990;
Director, Adams Express Company (closed-end
investment company), April 1982 to December 1997;
Director, Acromed Corporation (producer of spinal
implants), since June 1992; Director, Petroleum &
Resources Corp., April 1987 to December 1997;
Director, Morrison Products (manufacturer of blower
fans and air moving equipment), since April 1983;
Director, Kirtland Capital Corp. (privately funded
investment group), since January 1992; trustee,
Armada Funds, since November 1993.
John F. Durkott 54 President and Chief Operating Officer, Kittle's Home
Furnishings Center, Inc., since January 1982;
partner, Kittles Bloomington Property Company, since
January 1981; partner, KK&D (Affiliated Real Estate
Companies of Kittle's Home Furnishings Center),
since January 1989; trustee, Armada Funds, since
November 1993.
Robert J. Farling 61 Retired Chairman, President and Chief Executive
Officer, Centerior Energy (electric utility), March
1992 to October 1997; Director, National City
Corporation (bank holding company) until October
1997; Director, Republic Engineered Steels, since
October 1997; Trustee, Armada Funds, since November
1997.
Richard W. Furst, Dean 59 Professor of Finance and Dean, Carol Martin Gatton
College of Business and Economics, University of
Kentucky, since 1981; Director, The Seed Corporation
(restaurant group), since 1990; Director, Foam
Design, Inc. (manufacturer of industrial and
commercial foam products), since 1993; Trustee,
Armada Funds, since June 1990.
Gerald L. Gherlein 60 Executive Vice-President and General Counsel, Eaton
Corporation
</TABLE>
-9-
<PAGE> 15
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- ---- --- DURING PAST 5 YEARS
--------------------
<S> <C> <C>
(global manufacturing), since 1991; Trustee,
Meridia Health System (four hospital health
system); Trustee, WVIZ Educational Television
(public television); Trustee, Armada Funds, since
July 1997.
Herbert R. Martens, Jr.* 45 Executive Vice President, National City Corporation
(bank holding company), since July 1997; Chairman,
President and Chief Executive Officer, NatCity
Investments, Inc. (investment banking), since July
1995; President and Chief Executive Officer,
Raffensperger, Hughes & Co. (broker-dealer), from
1993 until 1995; President, Reserve Capital Group,
from 1990 until 1993; President, since July 1997 and
Trustee, since November 1997 of Armada Funds.
J. William Pullen 59 President and Chief Executive Officer, Whayne Supply
Co. (engine and heavy equipment distribution), since
1986; President and Chief Executive Officer,
American Contractors Rentals & Sales (rental
subsidiary of Whayne Supply Co.), since 1988;
Trustee of Armada Funds, since November 1993.
</TABLE>
- -------------------------
*Mr. Carter is an "interested person" of the Trust, as defined in the
1940 Act, due to his ownership of ______ shares of stock of National City
Corporation, the parent corporation of First of America, the Funds' investment
adviser. Mr. Martens is an "interested person" because (1) he is an Executive
Vice President of National City Corporation, (2) he owns shares of common stock
and options to purchase common stock of National City Corporation, and (3) he is
the Chief Executive Officer of NatCity Investments, Inc., a broker-dealer
affiliated with First of America.
Until October 1997, Mr. Farling was a director of National City
Corporation, the parent corporation to First of America. Mr Farling also was a
shareholder of National City Corporation during the past five years.
The Board of Trustees held four regular and one special meeting during
the last full fiscal year. The Trust does not have standing committees of the
Board of Trustees. During the fiscal year ended May 31, 1998, none of the
nominees served on the Board of Trustees or was compensated by the Trust. Set
forth
-10-
<PAGE> 16
below is the compensation received by the nominees from the Armada Funds,
a member of the same "Fund Complex" as that term is defined in the Investment
Company Act of 1940 (the "1940 Act"). Each trustee will receive an annual fee of
$_______ plus $______ for each Board meeting attended and will be reimbursed for
reasonable expenses incurred in attending meetings. The trustees and officers of
the Trust own less than 1% of the outstanding Shares of the Trust and less than
1% of the outstanding Shares of each of the Funds.
OFFICERS.
- ---------
Officers of the Trust are elected by, and serve at the pleasure of, the
Board. Officers of the Trust receive no remuneration from the Trust for their
services in such capacities. The following table sets forth certain information
about the Trust's officers:
<TABLE>
<CAPTION>
OFFICER POSITION WITH
NAME SINCE THE PRINCIPAL OCCUPATION
- ---- ------- TRUST DURING PAST 5 YEARS
------------- ---------------------
<S> <C> <C> <C>
Herbert R. Martens, Jr. May 14, 1998 President Executive Vice President, National City
Age 45 Corporation (bank holding company),
since July 1997; Chairman, President and
Chief Executive Officer, NatCity
Investments, Inc. (investment banking),
since July 1995; President and Chief
Executive Officer, Raffensberger, Hughes &
Co. (broker-dealer), from 1993 until 1995;
President, Reserve Capital Group, from
1990 until 1993, Trustee of the Armada
Funds since November 1997.
W. Bruce McConnel, III April 21, 1998 Secretary Partner of the law firm
Age 54 Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania.
Gary Tenkman May 14, 1998 Treasurer Director of Financial Services, BISYS
Age 27 Fund Services since April 1998;
Formerly, Audit Manager, Ernst & Young
LLP.
</TABLE>
Mr. Martens is employed by National City Corporation, the parent
corporation to First of America, which receives fees as an investment adviser to
the Trust. Mr. McConnel is a partner of the law firm Drinker Biddle & Reath LLP,
which receives fees as counsel to the Trust. Mr. Tenkman is employed by BISYS,
which receives fees as administrator, distributor, transfer agent and dividend
disbursing agent to the Trust.
-11-
<PAGE> 17
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
NOMINEE AGGREGATE PENSION OR ESTIMATED TOTAL COMPENSATION
------- COMPENSATION FROM RETIREMENT ANNUAL BENEFITS FROM TRUST AND
TRUST BENEFITS UPON RETIREMENT FUND COMPLEX
----------------- ---------- --------------- (ARMADA FUNDS)
PAID TO TRUSTEES
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert D. Neary -0- -0- -0-
- ---------------------------------------------------------------------------------------------------------------------
Leigh Carter -0- -0- -0-
- ---------------------------------------------------------------------------------------------------------------------
John F. Durkott -0- -0- -0-
- ---------------------------------------------------------------------------------------------------------------------
Robert J. Farling -0- -0- -0-
- ---------------------------------------------------------------------------------------------------------------------
Richard W. Furst -0- -0- -0-
- ---------------------------------------------------------------------------------------------------------------------
Gerald L. Gherlein -0- -0- -0-
- ---------------------------------------------------------------------------------------------------------------------
Herbert R. Martens, Jr. -0- -0- -0- -0-
- ---------------------------------------------------------------------------------------------------------------------
J. William Pullen -0- -0- -0-
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
APPROVAL OF PROPOSAL 1
In order for Proposal 1 to be adopted, it must be approved by a
plurality of the votes cast by shareholders of the Trust. All shareholders of
all Funds will vote together.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
ELECTION OF EACH NOMINEE TO THE BOARD OF TRUSTEES.
PROPOSAL 2: TO APPROVE A CHANGE IN EACH
FUND'S FUNDAMENTAL INVESTMENT OBJECTIVE TO MAKE
SUCH OBJECTIVE NON-FUNDAMENTAL.
Currently, the investment objective of each Fund is fundamental, and
may be changed only upon the approval of its shareholders. A non-fundamental
investment objective may be changed by the Board of Trustees, without the
approval of shareholders. The Trustees believe that the change in each Fund's
objective to non-fundamental will benefit each Fund by providing increased
flexibility in investing the Fund's assets in response to regulatory and market
developments affecting a Fund's investments. Rendering the investment objectives
non-fundamental would avoid the delay and expense of a shareholder vote in the
event that circumstances should change such that the Board of Trustees deemed
the current objective to be no longer in the best interests of the particular
Fund's shareholders. Neither the 1940 Act nor state securities laws require a
Fund's investment objective to be fundamental. The Trustees have no present
intention of changing the investment objective of any Fund; however, if the
proposal is approved, the Board of Trustees may do so in the future.
-12-
<PAGE> 18
<TABLE>
<CAPTION>
PROPOSED NEW
CURRENT INVESTMENT OBJECTIVE INVESTMENT OBJECTIVE
---------------------------- --------------------
<S> <C> <C>
(a) SMALL CAPITALIZATION FUND
-------------------------
The Fund seeks growth of capital by investing primarily This investment objective would be made
in a diversified portfolio of common stocks and non-fundamental.
securities convertible into common stocks of small- to
medium-sized companies.
(b) MID CAPITALIZATION FUND
-----------------------
The Fund seeks growth of capital by investing primarily This investment objective would be made
in a diversified portfolio of common stocks and non-fundamental.
securities convertible into common stocks.
(c) LARGE CAPITALIZATION FUND
-------------------------
The Fund seeks growth of capital by investing primarily This investment objective would be made
in a diversified portfolio of common stocks and non-fundamental.
securities convertible into common stocks of companies
with large market capitalization.
(d) INTERNATIONAL DISCOVERY FUND
----------------------------
The Fund seeks long-term growth of capital. This investment objective would be made
non-fundamental.
(e) EQUITY INCOME FUND
------------------
The Fund primarily seeks current income by investing in a This investment objective would be made
diversified portfolio of high quality, dividend-paying non-fundamental.
common stocks and securities convertible into common stocks;
a secondary objective is growth of capital.
(f) CONSERVATIVE ALLOCATION FUND
----------------------------
The Fund seeks current income and conservation of This investment objective would be made
capital, with a secondary objective of long-term capital non-fundamental.
growth.
</TABLE>
-13-
<PAGE> 19
<TABLE>
<CAPTION>
PROPOSED NEW
CURRENT INVESTMENT OBJECTIVE INVESTMENT OBJECTIVE
---------------------------- --------------------
<S> <C> <C>
(g) BALANCED ALLOCATION FUND
------------------------
The Fund seeks current income, long-term capital growth This investment objective would be made
and conservation of capital. non-fundamental.
(h) AGGRESSIVE ALLOCATION FUND
--------------------------
The Fund seeks capital appreciation and income growth. This investment objective would be made
non-fundamental.
(i) BOND FUND
---------
The Fund seeks to provide current income as well as This investment objective would be made
preservation of capital by investing in a portfolio of non-fundamental.
high- and medium-grade fixed-income securities.
(j) LIMITED MATURITY BOND FUND
--------------------------
The Fund seeks to provide current income as well as This investment objective would be made
preservation of capital by investing in a portfolio of non-fundamental.
high- and medium-grade fixed-income securities with
remaining maturities of six years or less.
(k) INTERMEDIATE GOVERNMENT OBLIGATIONS FUND
----------------------------------------
The Fund seeks to provide current income with This investment objective would be made
preservation of capital by investing in U.S. government non-fundamental.
securities with remaining maturities of 12 years or less.
(l) U.S. GOVERNMENT INCOME FUND
---------------------------
The Fund seeks to provide shareholders with a high level This investment objective would be made
of current income consistent with prudent investment non-fundamental.
risk.
</TABLE>
-14
<PAGE> 20
<TABLE>
<CAPTION>
PROPOSED NEW
CURRENT INVESTMENT OBJECTIVE INVESTMENT OBJECTIVE
---------------------------- --------------------
<S> <C> <C>
(m) MUNICIPAL BOND FUND
-------------------
The Fund seeks to provide current interest income which This investment objective would be made
is exempt from federal income taxes and preservation of non-fundamental.
capital.
(n) MICHIGAN MUNICIPAL BOND FUND
----------------------------
The Fund seeks income which is exempt from federal income This investment objective would be made
tax and Michigan state income and intangibles tax, non-fundamental.
although such income may be subject to the federal
alternative minimum tax when received by certain
shareholders; also seeks preservation of capital.
(o) PRIME OBLIGATIONS FUND
----------------------
The Fund seeks to provide current income, with liquidity This investment objective would be made
and stability of principal. non-fundamental.
(p) U.S. GOVERNMENT OBLIGATIONS FUND
--------------------------------
The Fund seeks to provide current income, with liquidity This investment objective would be made
and stability of principal. non-fundamental.
(q) TREASURY FUND
-------------
The Fund seeks to provide current income, with liquidity This investment objective would be made
and stability of principal. non-fundamental.
</TABLE>
-15
<PAGE> 21
<TABLE>
<CAPTION>
PROPOSED NEW
CURRENT INVESTMENT OBJECTIVE INVESTMENT OBJECTIVE
---------------------------- --------------------
<S> <C> <C>
(r) TAX-FREE FUND
-------------
The Fund seeks to provide current interest income free This investment objective would be made
from federal income taxes, preservation of capital and non-fundamental.
relative stability of principal.
</TABLE>
APPROVAL OF PROPOSAL 2
In order for Proposal 2(a), (b), (c), (d), (e), (f), (g), (h), (i),
(j), (k), (l), (m), (n), (o), (p), (q) or (r) to be adopted for a particular
Fund, it must be approved by a majority of the outstanding Shares of that Fund.
Shares of each Fund will be voted separately on a Fund-by-Fund basis.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
CHANGING OF THE FUNDAMENTAL INVESTMENT OBJECTIVES AS SET FORTH IN PROPOSAL 2.
PROPOSAL 3: TO APPROVE CHANGES TO THE FUNDAMENTAL INVESTMENT
POLICIES AND LIMITATIONS OF THE FUNDS
Certain investment policies and limitations of the Funds are matters of
fundamental policy and may not be changed with respect to a particular Fund
without the approval of its shareholders. First of America, the Trust's
investment adviser, has recommended to the Board of Trustees that certain
fundamental investment policies and limitations of the Funds be amended as shown
below. The proposed changes would conform the fundamental investment policies
and limitations of the Funds to those currently in place for corresponding
investment funds of Armada Funds. This will allow the investment advisers of the
two fund complexes, who comprise the Asset Management Group of National City
Corporation, to manage their portfolios of investments in a more streamlined and
efficient manner. The Trustees believe that the proposal is in the best
interests of each Fund's shareholders.
-16-
<PAGE> 22
PROPOSAL 3(a)
AMENDMENT TO THE FUNDS' FUNDAMENTAL INVESTMENT LIMITATION
ON UNDERWRITING ACTIVITIES
For each of the Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Funds will underwrite the securities issued No Fund may act as an underwriter of securities within
by other persons, except to the extent that a the meaning of the Securities Act of 1933 except
Fund may be deemed to be an underwriter under certain insofar as it might be deemed to be an underwriter
securities laws in the disposition upon the disposition of portfolio securities acquired within
of "restricted securities." the limitation on purchases of illiquid securities and
except to the extent that the purchase of obligations
directly from the issuer thereof in accordance with its
investment objective, policies and limitations may be deemed
to be underwriting.
</TABLE>
EXPLANATION OF PROPOSED CHANGE: The proposed change would modernize and
make the language of this limitation uniform among the Funds and corresponding
investment funds of Armada Funds.
-17-
<PAGE> 23
PROPOSAL 3(b)
AMENDMENT TO THE FUNDS' FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING REAL ESTATE RELATED TRANSACTIONS
For each of the Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Funds will purchase or sell real estate No Fund may purchase or sell real estate, except that
(although investments in marketable securities of it may purchase securities of issuers which deal in
companies engaged in such activities and securities real estate and may purchase securities which are
secured by real estate or interests therein are not secured by interests in real estate.
prohibited by this restriction).
</TABLE>
EXPLANATION OF PROPOSED CHANGE: The proposed change would modernize and
make uniform the language of this limitation among the Funds and corresponding
investment funds of Armada Funds.
-18-
<PAGE> 24
PROPOSAL 3(c)
AMENDMENT TO THE FUNDS' FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING COMMODITIES
For each of the Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Funds will purchase or sell commodities or No Fund may invest in commodities, except that as
commodities contracts except, to the extent disclosed in consistent with its investment objective and policies
the current Prospectus of the Fund. the Fund may: (a) purchase and sell options, forward
contracts, futures contracts, including without
limitation those relating to indices; (b) purchase and
sell options on futures contracts or indices; and
(c) purchase publicly traded securities of companies
engaging in whole or in part in such activities.
</TABLE>
EXPLANATION OF PROPOSED CHANGE: The proposed amendment would modernize
and make uniform among the Funds and corresponding investment funds of Armada
Funds the language addressing the Funds' investments in commodities but is not
intended to signify a change in the Funds' approach to investing in commodities.
The Funds do not intend to engage in the selling of commodities such as pork,
corn and wheat futures or related commodity contracts other than financial
instruments.
-19-
<PAGE> 25
PROPOSAL 3(d)
AMENDMENT TO THE FUNDS' FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING INDUSTRY CONCENTRATION
For each of the Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Funds will purchase any securities which would No Fund may purchase any securities which would cause
cause more than 25% of the value of the Fund's total assets 25% or more of the value of its total assets at the
at the time of purchase to be invested in securities of one time of purchase to be invested in the securities of
or more issuers conducting their principal business one or more issuers conducting their principal
activities in the same industry, provided that: (a) there is business activities in the same industry, provided
no limitation with respect to obligations issued or that: (a) there is no limitation with respect to
guaranteed by the U.S. government or its agencies or obligations issued or guaranteed by the U.S.
instrumentalities and repurchase agreements secured by government, any state, territory or possession of the
obligations of the U.S. government or its agencies or United States, the District of Columbia or any of
instrumentalities; (b) wholly-owned finance companies will be their authorities, agencies, instrumentalities or
considered to be in the industries of their parents if their political subdivisions, and repurchase agreements
activities are primarily related to financing the activities secured by such instruments, or in the case of the
of their parents; and (c) utilities will be divided according Prime Obligations, U.S. Government Obligations,
to their services. For example, gas, gas transmission, Treasury and Tax-Free Funds, domestic bank obligations
electric and gas, electric, and telephone will each be and repurchase agreements secured by such obligations;
considered a separate industry. (b) wholly-owned finance companies will be considered
to be in the industries of their parents if their
activities are primarily related to financing the
activities of the parents; (c) utilities will be
divided according to their services, for example, gas,
gas transmission, electric and gas, electric, and
telephone will each be considered a separate industry;
and (d) personal credit and business credit businesses
will be considered separate industries.
</TABLE>
-20-
<PAGE> 26
EXPLANATION OF PROPOSED CHANGE: The proposed amendment would modernize
and make uniform the language of this limitation among the Funds and
corresponding investment funds of Armada Funds.
-21-
<PAGE> 27
PROPOSAL 3(e)
AMENDMENT TO THE FUNDS' INVESTMENT LIMITATION
CONCERNING LOANS
For each of the Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Funds will make loans, except that a Fund may No Fund may make loans, except that each Fund may
purchase or hold debt instruments and lend portfolio purchase and hold debt instruments and enter into
securities in accordance with its investment objective and repurchase agreements in accordance with its investment
policies, make time deposits with financial institutions and objective and policies and may lend portfolio
enter into repurchase agreements. securities in an amount not exceeding one-third of its
total assets.
</TABLE>
EXPLANATION OF PROPOSED CHANGE: The proposed amendment would modernize
the language of this limitation and conform it to provisions of the 1940 Act. It
would permit those transactions which are not prohibited by current regulatory
interpretations.
-22-
<PAGE> 28
PROPOSAL 3(f)
AMENDMENT TO THE FUNDS' INVESTMENT LIMITATION
CONCERNING BORROWING AND THE ISSUANCE OF SENIOR SECURITIES
For each of the Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Funds will (a) borrow money (not including reverse No Fund may borrow money, issue senior securities or
repurchase agreements or dollar roll agreements), except that mortgage, pledge or hypothecate its assets except to the
each Fund may borrow from banks for temporary or emergency extent permitted under the 1940 Act.
purposes and then only in amounts up to 30% (10% in the case of
the Prime Obligations Fund, U.S. Government Obligations Fund, As a non-fundamental policy, no Fund will purchase
Treasury Fund and Tax-Free Fund (collectively the "Money Market securities while its outstanding borrowings (including
Funds")) of its total assets at the time of borrowing (and reverse repurchase agreements) are in excess of 5% of its
provided that such bank borrowings, reverse repurchase agreements total assets. Securities held in escrow or in separate
and dollar roll agreements do not exceed in the aggregate accounts in connection with a Fund's investment practices
one-third of the Fund's total assets less liabilities other than described in the Fund's Prospectus or Statement of
the obligations represented by the bank borrowings, reverse Additional Information are not deemed to be pledged for
repurchase agreements and dollar roll agreements), or mortgage, purposes of this limitation.
pledge or hypothecate any assets except in connection with a bank
borrowing in amounts not to exceed 30% of the Fund's net assets
at the time of borrowing; (b) enter into reverse repurchase
agreements, dollar roll agreements and other permitted borrowings
in amounts exceeding in the aggregate one-third of the Fund's
total assets less liabilities other than the obligations
represented by such reverse repurchase and dollar roll
agreements; and (c) issue senior securities except as permitted
by the 1940 Act or any rule, order or interpretation thereunder.
</TABLE>
EXPLANATION OF PROPOSED CHANGE: The proposed amendment would clarify
and modernize the limitations concerning borrowing and the issuance of senior
securities, and conform them to provisions of the 1940 Act, and the limitations
currently in place for the corresponding funds of Armada Funds. Reverse
-23-
<PAGE> 29
repurchase agreements and dollar roll agreements are considered to be borrowings
under the 1940 Act. Accordingly, the Funds' proposed amendment to their policy
regarding senior securities and borrowings would also apply to reverse
repurchase agreements and dollar roll agreements. The proposed amendment would
allow those transactions which are not prohibited by current regulatory
interpretations. It would also expand the Money Market Funds' power to borrow
money from 10% to 33% of their total assets at the time of a borrowing.
Additionally, the Funds will adopt a non-fundamental policy which
prevents the purchase of securities while a Fund's borrowings, including reverse
repurchase agreements, are in excess of 5% of a Fund's total assets. As a
non-fundamental policy, the Board of Trustees may change it without the approval
of shareholders. So long as the Board of Trustees does not change this
non-fundamental limitation, this limitation will limit each Fund's ability to
borrow money for purposes of investment leverage. The Funds have no present
intention to use investment leverage. If they did so at some time in the future,
however, such leverage could increase the opportunity for greater total return,
but also increase the risk of loss if securities purchased with borrowed funds
decline in value. Borrowed funds are subject to interest costs.
-24-
<PAGE> 30
PROPOSAL 3(g)
AMENDMENT TO THE FUNDS' INVESTMENT LIMITATION CONCERNING ISSUER
DIVERSIFICATION
For each of the Non-Money Market Funds other than the Michigan
Municipal Bond Fund (the Small Capitalization Fund, Mid
Capitalization Fund, Large Capitalization Fund, International
Discovery Fund, Equity Income Fund, Conservative Allocation
Fund, Balanced Allocation Fund, Aggressive Allocation Fund,
Bond Fund, Limited Maturity Bond Fund, Intermediate Government
Obligations Fund, U.S. Government Income Fund, Municipal Bond
Fund and Michigan Municipal Bond Fund are collectively the
"Non-Money Market Funds"):
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Non-Money Market Funds, with the exception of No Non-Money Market Fund may purchase securities of
the Michigan Municipal Bond Fund, may purchase securities any one issuer, other than securities issued or
of any one issuer, other than obligations issued or guaranteed by the U.S. government or its agencies or
guaranteed by the U.S. government or its agencies or instrumentalities or, in the case of the International
instrumentalities, if, immediately after such purchase, Discovery Fund, securities issued or guaranteed by any
more than 5% of the value of the Fund's total assets would foreign government, if, immediately after such
be invested in such issuer, or the Fund would hold more purchase, more than 5% of the value of the Fund's
than 10% of the outstanding voting securities of the total assets would be invested in such issuer or the
issuer, except that 25% or less of the value of such Fund's Fund would hold more than 10% of any class of
total assets may be invested without regard to such securities of the issuer or more than 10% of the
limitations. There is no limit to the percentage of assets outstanding voting securities of the issuer, except
that may be invested in U.S. Treasury bills, notes, or that up to 25% of the value of the Fund's total assets
other obligations issued or guaranteed by the U.S. may be invested without regard to such limitations.
government or its agencies or instrumentalities.
</TABLE>
EXPLANATION OF PROPOSED CHANGE: The proposed amendment would make the
language of this limitation uniform among the Funds (other than the Michigan
Municipal Bond Fund, which is a non-diversified investment fund) and
corresponding investment funds of Armada Funds.
-25-
<PAGE> 31
APPROVAL OF PROPOSAL 3
In order for Proposal 3(a), (b), (c), (d), (e), (f) and (g) to be
adopted for a particular Fund, it must be approved by a majority of the
outstanding Shares of that Fund. Shares of each Fund affected will be voted
separately on a Fund-by-Fund basis.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE CHANGING OF THE FUNDAMENTAL INVESTMENT POLICIES
AND LIMITATIONS AS SET FORTH IN PROPOSAL 3.
PROPOSAL 4: TO APPROVE A CHANGE IN THE FOLLOWING FUNDAMENTAL INVESTMENT
POLICIES AND LIMITATIONS OF THE FUNDS TO MAKE SUCH POLICIES AND LIMITATIONS
NON-FUNDAMENTAL.
The following proposals would change certain fundamental investment
policies and limitations of the Funds to non-fundamental investment policies and
limitations. Unlike a fundamental policy or limitation, a non-fundamental
investment policy or limitation may be changed without the approval of
shareholders. These proposed changes would avoid the delay and expense of a
shareholder vote in the event that the permissible guidelines for such
investments or the financial markets change in the future. Neither the 1940 Act
nor state securities laws require such policies to be fundamental. The Trustees
have no present intention of changing the investment policies and limitations of
any Fund other than as proposed above; however, if this proposal is approved,
the Board of Trustees may do so in the future.
-26-
<PAGE> 32
PROPOSAL 4(a)
RECLASSIFICATION OF THE FUNDAMENTAL INVESTMENT LIMITATION
REGARDING PURCHASING SECURITIES ON MARGIN
For the Non-Money Market Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED:
------- ---------
<S> <C>
None of the Non-Money Market Funds may purchase securities This limitation would be made non-fundamental.
on margin, except for use of short-term credit necessary
for clearance of purchases of portfolio securities and
except as may be necessary to make margin payments in
connection with foreign currency futures and other
derivative securities transactions.
</TABLE>
For the Money Market Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Money Market Funds may purchase securities on This limitation would be made non-fundamental.
margin, except for use of short-term credit necessary for
clearance of purchases of portfolio securities.
</TABLE>
-27-
<PAGE> 33
PROPOSAL 4(b)
RECLASSIFICATION OF THE FUNDAMENTAL INVESTMENT LIMITATION
REGARDING THE WRITING OR SELLING OF CALL OPTIONS.
For each of the Funds:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
None of the Funds will write any call options on This limitation would be made non-fundamental.
securities unless the securities are held by the Fund or
unless the Fund is entitled to such securities in
deliverable form in exchange for cash in an amount which
has been segregated for payment or without further payment.
</TABLE>
-28-
<PAGE> 34
PROPOSAL 4(c)
RECLASSIFICATION OF THE FUNDAMENTAL INVESTMENT LIMITATION
REGARDING INVESTMENTS IN SECURITIES OF ANY ONE ISSUER
This Proposal is applicable to the Michigan Municipal Bond Fund only:
<TABLE>
<CAPTION>
CURRENT PROPOSED
------- --------
<S> <C>
The Michigan Municipal Bond Fund may not purchase This limitation would be made non-fundamental.
securities of any one issuer, other than obligations issued
or guaranteed by the U.S. government or its agencies or
instrumentalities, if, immediately after such purchase, (a)
more than 5% of the value of the Fund's total assets (taken
at current value) would be invested in such issuer (except
that up to 50% of the value of the Fund's total assets may
be invested without regard to such 5% limitation), and (b)
more than 25% of its total assets (taken at current value)
would be invested in the securities of a single issuer.
</TABLE>
APPROVAL OF PROPOSAL 4
In order for Proposal 4(a), (b) and (c) to be adopted for a particular
Fund, they must be approved by a majority of the outstanding Shares of that
Fund. Shares of each Fund affected will be voted separately on a Fund-by-Fund
basis.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE CHANGING OF THE FUNDAMENTAL INVESTMENT POLICIES
AND LIMITATIONS SET FORTH IN PROPOSAL 4 TO NON-FUNDAMENTAL
POLICIES AND LIMITATIONS.
-29-
<PAGE> 35
INVESTMENT ADVISER AND SUB-ADVISER.
- -----------------------------------
First of America, 303 North Rose Street, Suite 500, Kalamazoo, Michigan
49007 is the investment adviser to the Trust. The investment adviser is a part
of National City Bank's Asset Management Group and intends to conduct its
business under the name "National City Investment Management Company" in the
near future. Gulfstream Global Investors, Ltd., 100 Crescent Court, Suite 550,
Dallas, Texas 75201, serves as sub-adviser to the International Discovery Fund,
and the foreign securities portion of the assets of the Conservative Allocation
Fund, the Balanced Allocation Fund and the Aggressive Allocation Fund.
DISTRIBUTOR AND ADMINISTRATOR.
- ------------------------------
BISYS Fund Services Limited Partnership ("BISYS") located at 3435
Stelzer Road, Columbus, Ohio 43219, serves as the Trust's distributor,
administrator, transfer agent and dividend disbursing agent; an affiliate of
BISYS provides fund accounting services.
INDEPENDENT AUDITORS.
- ---------------------
Coopers & Lybrand L.L.P., serves as independent auditors of the Trust
and audited the Trust's operations for the fiscal year ended May 31, 1998.
Shareholders are not herein requested to approve the selection of Coopers &
Lybrand, L.L.P. Nevertheless, a representative of Coopers & Lybrand L.L.P. is
expected to be available by telephone at the Meeting should any matter arise
requiring consultation with the auditors. Coopers & Lybrand L.L.P. will be given
the opportunity to make a statement if it chooses.
SHAREHOLDER PROPOSALS
The Trust is organized as a Massachusetts business trust. The Trust
does not hold annual meetings. The Trust's Declaration of Trust and Code of
Regulation provide that meetings of shareholders shall be called by the
Trustees upon the written request of shareholders owning at least twenty percent
of the outstanding Shares entitled to vote. Shareholders wishing to submit
proposals for inclusion in a proxy statement for a subsequent shareholder
meeting should send their written proposals to the Secretary of the Trust, c/o
3435 Stelzer Road, Columbus, Ohio 43219 so that it is received at least 120 days
before the date of the meeting. Mere submission of a shareholder proposal does
not guarantee inclusion of the proposal in the proxy statement or presentation
of the proposal at the meeting since such inclusion and presentation are subject
to compliance
-30-
<PAGE> 36
with certain federal regulations.
The management of the Trust does not know of any matters to be
presented at the Meeting, other than those set forth in this Proxy Statement.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES. YOU MAY ALSO FAX YOUR VOTED CARD(S) TO 1-888-451-8683 TO
REGISTER YOUR VOTE.
DATED: JULY 2, 1998
-------------------------
W. Bruce McConnel III
Secretary
-31-
<PAGE> 37
VOTE THIS PROXY CARD TODAY!
-----
THE PARKSTONE GROUP OF FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE PARKSTONE GROUP OF FUNDS
(THE "TRUST") FOR USE AT A SPECIAL MEETING OF SHAREHOLDERS OF THE
BELOW-REFERENCED FUND OF THE TRUST TO BE HELD ON AUGUST 13, 1998 AT 8:30 A.M.
(EASTERN TIME) AT THE OFFICES OF BISYS FUND SERVICES LIMITED PARTNERSHIP, 3435
STELZER ROAD, COLUMBUS, OHIO 43219.
Please fold and detach card at perforation before mailing
FUND NAME PRINTS HERE SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints R. Jeffrey Young and Bryan C. Haft and
each of them, attorneys and proxies of the undersigned each with the power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the above-referenced Special Meeting of Shareholders, and at any adjournments
thereof, casting votes according to the dollar value of shares of the Fund which
the undersigned may be entitled to vote with respect to the proposals set forth
on the reverse side, and any other matters to come before the Special Meeting or
any adjournment thereof, in accordance with the specification indicated, if any,
and with all the powers which the undersigned would possess if personally
present, hereby revoking any prior proxy to vote at such Special Meeting, and
hereby ratifying and confirming all that said attorneys and proxies, or each of
them, may lawfully do by virtue hereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS OF THE FUNDS OF THE TRUST AND THE PROXY STATEMENT DATED JULY 10,
1998.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
---------------------------------------------
---------------------------------------------
Signature(s), (Title(s), if applicable)
Please sign above exactly as name(s)
appear(s) hereon. Corporate or partnership
proxies should be signed in full corporate or
partnership name by an authorized officer.
Each joint owner should sign personally. When
signing as a fiduciary, please give full
title as such.
DATE: ________________, 1998
<PAGE> 38
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX BELOW. NOTE: ALL FUNDS VOTE FOR
THE ELECTION OF TRUSTEES AND FOR ALL PROPOSALS EXCEPT PROPOSALS 3(G) AND 4(C)
WHICH APPLY TO THE MICHIGAN BOND FUND ONLY.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST ON BEHALF OF THE
FUND. THE MEETING WILL BE HELD ON AUGUST 13, 1998 AT 8:30 A.M. (EASTERN TIME) AT
THE OFFICES OF BISYS FUND SERVICES LIMITED PARTNERSHIP, 3435 STELZER ROAD,
COLUMBUS, OHIO 43219. PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.E~THIS PROXY WILL
BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE TAKEN ON THE
FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY WILL BE
VOTED IN FAVOR OF THE PROPOSALS.
Please fold and detach card at perforation before mailing
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FOR WITHHOLD AUTHORITY
ALL to vote for all nominees
listed below.
1. Election of Trustees Robert D. Neary, Leigh Carter, John F. Durkott, Robert [ ] [ ]
J. Farling, Richard W. Furst, Gerald L. Gherlein, Herbert R. Martens, Jr., J.
William Pullen
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE
FOR ANY INDIVIDUAL NOMINEE, PRINT HIS NAME
ON THE LINE BELOW.
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FOR AGAINST ABSTAIN
2. To approve a change in each Fund's fundamental investment objective to make [ ] [ ] [ ]
such objective non-fundamental.
3. To approve changes to the following fundamental investment limitations of the
Funds.
(3a) limitation on underwriting activities; FOR ALL AGAINST ALL ABSTAIN ALL
(3b) limitation on real estate related transactions; EXCEPT AS
(3c) limitation on investment in commodities; MARKED BELOW
(3d) limitation regarding industry concentration; [ ] [ ] [ ]
(3e) limitation on loans;
(3f) limitation on borrowing and the issuance of senior securities; and
(3g) For The Michigan Municipal Bond Fund only. limitation on issuer diversification
TO VOTE AGAINST A PARTICULAR PROPOSED CHANGE, APPLICABLE TO YOUR FUND, WRITE THE
SUB-PROPOSAL NUMBER ON THE LINE BELOW.
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4. To approve a change in the following fundamental investment policies and FOR AGAINST ABSTAIN
limitations of certain Funds to non-fundamental policies and limitations: [ ] [ ] [ ] 4a.
(4a) limitation on purchasing securities on margin [ ] [ ] [ ] 4b.
[ ] [ ] [ ] 4c.
(4b) limitation on writing or selling call options
(4c) For The Michigan Municipal Bond Fund only. limitation regarding
investments in securities of any one issuer applicable to the Michigan
Municipal Bond Fund, which is classified as a non-diversified fund
under the Investment Company Act of 1940, as amended (the "1940 Act")
5. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof for any affected funds
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