Doc. #346126 v.08
File No.
33-_______
As filed with the SEC on November 9, 2000
U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549FORM
N-14REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. Post-Effective Amendment No.
----- -----
(Check appropriate box or boxes)
VISION GROUP OF FUNDS
(Exact Name of Registrant as Specified in Charter)
(412) 288-1900
(Area Code and Telephone Number)
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7010
(Address of Principal Executive Offices --
Number, Street, City, State, Zip Code)
C. TODD GIBSON, ESQUIRE
FEDERATED SERVICES COMPANY
1001 LIBERTY AVENUE
PITTSBURGH, PA 15222-3779
(Name and Address of Agent for Service --
Number, Street, City, State, Zip Code)
Copies to:
ALLAN S. MOSTOFF, ESQUIRE
DECHERT
1775 EYE STREET, NW
WASHINGTON, D.C. 20006-2401
(202) 261-3300
BRUCE G. LETO, ESQUIRE
STRADLEY, RONON, STEVENS & YOUNG, LLP
2600 ONE COMMERCE SQUARE
PHILADELPHIA, PA 19103
(215) 564-8000
MICHAEL P. MALLOY, ESQUIRE
DRINKER BIDDLE & REATH LLP
ONE LOGAN SQUARE
PHILADELPHIA, PA 19103-6996
(215) 988-2978
MATTHEW G. MALONEY, ESQUIRE
DICKSTEIN SHAPIRO MORIN & OSHINSKY, LLP
2101 L STREET, NW
WASHINGTON, D.C. 20037-1526
(202) 828-2218
Approximate Date of Proposed Public Offering: As soon as
practicable after this Registration Statement becomes effective
under the Securities Act of 1933, as amended.
It is proposed that this filing will become effective
on December 10, 2000 pursuant to Rule 488.
Title of Securities Being Registered - Shares of beneficial interest of:
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Vision Intermediate Term Bond Fund - Class A Shares
Vision Pennsylvania Municipal Income Fund - Class A Shares
Vision Managed Allocation Fund - Conservative Growth - Class A Shares
Vision Managed Allocation Fund - Aggressive Growth - Class A Shares
Vision Managed Allocation Fund - Moderate Growth - Class A Shares
Vision Small Cap Stock Fund - Class A Shares
Vision International Equity Fund - Class A Shares
Vision Large Cap Core Fund - Class A Shares
Vision Treasury Money Market Fund - Class A Shares
Vision Institutional Prime Money Market Fund
Vision Institutional Limited Duration U.S. Government Fund
NO FILING FEE IS DUE BECAUSE REGISTRANT IS RELYING ON SECTION 24(F) OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
Doc. #346126 v.08
GOVERNOR FUNDS
AGGRESSIVE GROWTH FUND
ESTABLISHED GROWTH FUND
INTERMEDIATE TERM INCOME FUND
INTERNATIONAL EQUITY FUND
LIFESTYLE CONSERVATIVE GROWTH FUND
LIFESTYLE GROWTH FUND
LIFESTYLE MODERATE GROWTH FUND
LIMITED DURATION GOVERNMENT SECURITIES FUND
PENNSYLVANIA MUNICIPAL BOND FUND
PRIME MONEY MARKET FUND
U.S. TREASURY OBLIGATIONS MONEY MARKET FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43218
Dear Shareholder:
The Board of Trustees of the Governor Funds ("Governor Board") is
pleased to submit three separate shareholder proposals. The first proposal
is to reorganize the above-listed series of the Governor Funds (each, a
"Governor Fund") into a comparable mutual fund series of the Vision Group of
Funds (each, a "Vision Fund"). The shareholders of each Governor Fund will
vote separately on the proposal to reorganize their Fund. If approved by
shareholders of a Governor Fund, the shareholders of that Governor Fund will
receive shares of a comparable Vision Fund. Each Vision Fund is advised by
Manufacturers and Traders Trust Company ("M&T Bank"). M&T Bank is the
principal banking subsidiary of M&T Bank Corporation ("M&T Corp."), a
regional bank holding company in existence since 1969. M&T Bank was founded
in 1856 and provides comprehensive banking and financial services to
individuals, governmental entities and businesses throughout New York State.
As of June 30, 2000, M&T Bank had $5.5 billion in assets under management.
M&T Bank has served as investment adviser to the Vision Group of Funds (and
their predecessors) since their inception in 1988.
This reorganization is being proposed in connection with the recent
merger of Keystone Financial, Inc. ("Keystone") into M&T Corp., the corporate
parent of M&T Bank, which took place on October 6, 2000. Prior to the merger
of Keystone and M&T Corp., Keystone was the corporate parent of Martindale
Andres & Company LLC ("Martindale"), the investment adviser to each Governor
Fund. In an effort to promote more efficient operations, to eliminate
certain duplicative costs and to enhance the distribution of fund shares by
eliminating redundant investment products, M&T Corp., M&T Bank, Keystone and
Martindale proposed that each Governor Fund be reorganized into a comparable
Vision Fund.
The Governor Board considered various factors in reviewing this
proposal on behalf of the shareholders of each Governor Fund, including, but
not limited to, the following: First, the Governor Board considered the fact
that the Vision Funds have investment objectives and policies identical or
substantially similar to those of corresponding Governor Funds. Second,
because the Vision Group of Funds' complex has a larger asset base, the
Governor Board believes the reorganization may provide shareholders the
benefit of economies of scale and increased diversification. Third, no
shareholders of the Governor Funds will pay a sales charge to become a
shareholder of the Vision Funds in connection with the reorganization, and
the expenses of the reorganization will not be borne by the Governor Funds.
Fourth, the reorganization is expected to be tax-free; it is anticipated you
will pay no federal income tax as a result of the reorganization. The
Governor Board also considered the quality of services that would be provided
to the shareholders of the Governor Funds after the reorganization and that
the expense ratios after proposed contractual and voluntary fee waivers of
the Vision Funds are within industry norms. For these and other reasons, the
Governor Board believes this reorganization is in the best interests of the
shareholders of each Governor Fund. The Board of Trustees of the Vision
Group of Funds ("Vision Board") considered the same factors and determined
that the reorganization is in the best interest of the shareholders of each
Vision Fund.
If this proposal is approved by Governor Fund shareholders, each Vision
Fund would acquire substantially all of the assets and liabilities of a
Governor Fund that either has identical or substantially similar investment
objectives, policies, and strategies, and Vision Fund shares would be
distributed pro rata to you in complete liquidation of your Governor Fund.
In order to exchange your Governor Fund shares for Vision Fund shares, the
Governor Board submits for your approval a form of Agreement and Plan of
Reorganization ("Plan") that relates to your Governor Fund. Vision Fund
shareholder approval of this reorganization and the Plan is not required nor
is it being sought.
The second proposal requests approval of a new investment advisory
agreement ("New Advisory Agreement") between the Governor Funds, on behalf of
each Governor Fund, and Martindale, each Fund's current investment adviser.
For each Governor Fund, it is anticipated that the New Advisory Agreement
will be in effect from the date the shareholders of that Governor Fund
approve the New Advisory Agreement until the date of the reorganization of
that Fund (currently anticipated to occur on or about December 18, 2000).
After the reorganization, each Vision Fund into which each Governor Fund is
reorganized will be managed by M&T Bank, and Martindale will be the
sub-adviser for the Vision Small Cap Stock Fund pursuant to a sub-advisory
agreement between Martindale and M&T Bank.
The third proposal requests approval by the International Equity Fund
shareholders of a new sub-advisory agreement ("New Sub-Advisory Agreement")
between Martindale, with respect to the management of the International
Equity Fund, and Brinson Partners, Inc. ("Brinson"), the current sub-adviser
to the International Equity Fund. It is anticipated that this New
Sub-Advisory Agreement will be in effect from the date the shareholders of
the International Equity Fund approve the New Sub-Advisory Agreement until
the date of the reorganization of the International Equity Fund (currently
anticipated to occur on or about December 18, 2000). Upon the
reorganization, Brinson will continue to be the sub-adviser for the
International Equity Fund pursuant to a new sub-advisory agreement between
Brinson and M&T Bank.
Your vote on these proposals is very important. Whether or not you
plan to attend the meeting, please vote your shares by telephone or by the
Internet or by mail. IF YOU ARE A SHAREHOLDER OF MORE THAN ONE GOVERNOR
FUND, YOU WILL RECEIVE MORE THAN ONE PROSPECTUS/PROXY STATEMENT AND PROXY
CARD AND WILL NEED TO VOTE THE SHARES YOU HOLD OF EACH FUND. Following this
letter is a Q&A summarizing the proposed reorganization and information on
how you vote your shares. Please read the entire Prospectus/Proxy Statement
carefully before you vote.
The Board believes that the proposed reorganization of each Governor
Fund with a comparable Vision Fund and approval of the New Advisory Agreement
for the Governor Funds and New Sub-Advisory Agreement for the International
Equity Fund are in the best interests of the Governor Funds and their
shareholders and unanimously recommends that you vote in favor of such
proposals.
Thank you for your prompt attention and participation.
Sincerely,
/s/ A. James Durica
------------------------------------
A. James Durica
President
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Doc. #346126 v.08
GOVERNOR FUNDS/VISION GROUP OF FUNDS
PROXY Q&A
THE FOLLOWING IS IMPORTANT INFORMATION TO HELP YOU UNDERSTAND THE PROPOSALS
ON WHICH YOU ARE BEING ASKED TO VOTE. PLEASE READ THE ENTIRE PROXY
STATEMENT.
WHY IS THIS REORGANIZATION TAKING PLACE?
The reorganization is being proposed in connection with the recent merger of
Keystone Financial, Inc. ("Keystone") into M&T Bank Corporation ("M&T
Corp."), which took place on October 6, 2000 ("Bank Merger"). Prior to the
Bank Merger, Keystone was the corporate parent of Martindale Andres & Company
LLC ("Martindale"), the investment adviser to each Governor Fund. M&T Corp.
is the corporate parent of Manufacturers and Traders Trust Company ("M&T
Bank"), the investment adviser to each series of the Vision Group of Funds.
In an effort to promote more efficient operations, to eliminate certain
duplicative costs and to enhance the distribution of fund shares by
eliminating redundant investment products, M&T Corp., M&T Bank, Keystone and
Martindale proposed that each Governor Fund be reorganized into a comparable
Vision Fund.
WHEN WILL THIS REORGANIZATION BECOME EFFECTIVE?
The reorganization is currently anticipated to occur in mid-December,
assuming shareholder and regulatory approval is obtained. Shortly after the
reorganization has been approved, you will receive new account information on
your new ownership in the corresponding Vision Fund.
WHAT DO I HAVE TO DO TO BECOME A SHAREHOLDER IN THE VISION FUNDS?
Governor Fund shareholders are being asked to approve this reorganization
through voting at the Special Meeting of Governor Fund Shareholders, which is
scheduled to occur on December 13, 2000. Your vote is very important. You
have the flexibility to cast your vote either by phone, Internet or mail.
Upon approval of the reorganization, shareholders' accounts will
automatically be transferred to the corresponding Vision Fund.
WHAT WILL HAPPEN TO MY GOVERNOR FUND ACCOUNT?
After the reorganization, shareholders will be assigned a new account at the
Vision Group of Funds and then Governor Fund accounts will be closed. This
process will occur automatically, with no action required by you.
WILL ALL OF MY CURRENT ACCOUNT OPTIONS, SUCH AS SYSTEMATIC PURCHASES AND
WITHDRAWAL PLANS, TRANSFER OVER TO VISION FUNDS?
Various types of account servicing features will transfer automatically to
new Vision Fund accounts. Shortly after the reorganization, shareholders
will receive information that further describes these options, along with
materials concerning the Vision Group of Funds' diversified product line and
shareholder services.
WILL I INCUR TAXES AS A RESULT OF THIS REORGANIZATION?
This reorganization is expected to be a tax-free event. Generally,
shareholders will not incur capital gains or losses on the conversion from
Governor Fund shares into Vision Fund shares as a result of this
reorganization.
Shareholders will incur capital gains or losses if they sell their Governor
Fund shares before the reorganization becomes effective or sell/exchange
their Vision Fund shares after the reorganization becomes effective.
Shareholders will also be responsible for tax obligations associated with
monthly or periodic dividend and capital gains distributions that occur prior
to and after the reorganization. Please note that retirement accounts are
exempt from such tax consequences.
WHERE CAN I GET MORE INFORMATION ABOUT THIS REORGANIZATION?
Contact Governor Funds at 1-800-766-3960, or contact your sales
representative.
WHERE CAN I GET MORE INFORMATION ABOUT THE VISION GROUP OF FUNDS?
Contact Vision Funds at 1-800-836-2211. Additionally, we encourage you to
contact your financial advisor.
WHAT OTHER PROPOSALS AM I BEING ASKED TO VOTE ON?
As a result of the Bank Merger, the investment advisory agreement then in
effect between the Governor Funds and Martindale automatically terminated in
accordance with its terms and applicable law. Similarly, the investment
sub-advisory agreement then in effect between Martindale and Brinson
Partners, Inc. ("Brinson"), the sub-adviser to the International Equity Fund,
also terminated. Shareholders are now being asked to approve a new
investment advisory agreement with Martindale. In addition, shareholders of
the International Equity Fund are being asked to approve a new investment
sub-advisory agreement with Brinson. As to a particular Governor Fund, each
new agreement would be in effect until the date of the reorganization of that
Fund.
Doc. #346126 v.08
GOVERNOR FUNDS
AGGRESSIVE GROWTH FUND
ESTABLISHED GROWTH FUND
INTERMEDIATE TERM INCOME FUND
INTERNATIONAL EQUITY FUND
LIFESTYLE CONSERVATIVE GROWTH FUND
LIFESTYLE GROWTH FUND
LIFESTYLE MODERATE GROWTH FUND
LIMITED DURATION GOVERNMENT SECURITIES FUND
PENNSYLVANIA MUNICIPAL BOND FUND
PRIME MONEY MARKET FUND
U.S. TREASURY OBLIGATIONS MONEY MARKET FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43218
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 13, 2000
A Special Meeting of Shareholders ("Special Meeting") of each series of
the Governor Funds listed above (each a "Governor Fund") will be held on
December 13, 2000, at 2:00 p.m., Eastern Time at the principal offices of the
Governor Funds, 3435 Stelzer Road, Columbus, Ohio 43218, for the following
purposes:
1. To approve a proposed Agreement and Plan of Reorganization ("Plan")1
between the Governor Funds, on behalf of each Governor Fund series, and
the Vision Group of Funds, on behalf of certain Vision Fund series
(each a "Vision Fund"), whereby the Vision Fund would acquire all or
substantially all of the assets and liabilities of a corresponding
Governor Fund in exchange solely for the Vision Fund's shares, to be
distributed pro rata by the Governor Fund to the holders of its shares,
in complete liquidation of the Governor Fund. (Each Governor Fund to
vote separately.)
2. To approve a new investment advisory agreement between the Governor
Funds, on behalf of each Governor Fund series ("New Advisory
Agreement"), and Martindale Andres & Company LLC ("Martindale"). (Each
Governor Fund to vote separately.)
3. To approve a new investment sub-advisory agreement between Martindale,
with respect to the management of the International Equity Fund, and
Brinson Partners, Inc. (International Equity Fund shareholders only
will vote separately.)
4. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
The attached Prospectus/Proxy Statement provides more information
concerning the foregoing matters, including the transaction contemplated by
the Plan. A Form of the Plan is attached as Exhibit A.
Shareholders of record at the close of business on October 16, 2000 are
entitled to notice of, and (except for the S Shares class of Prime Money
Market Fund) to vote at, the Special Meeting or any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE YOUR SHARES BY
RETURNING THE PROXY CARD BY MAIL, OR BY VOTING BY TELEPHONE OR THE INTERNET.
YOUR VOTE IS IMPORTANT.
By Order of the Board of Trustees,
/s/ Michael P. Malloy
Michael P. Malloy
Dated: November 9, 2000 Secretary
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF
FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
YOU MAY ALSO VOTE BY TELEPHONE OR THE INTERNET. YOU MAY REVOKE YOUR PROXY AT
ANY TIME AT OR BEFORE THE MEETING OR VOTE IN PERSON IF YOU ATTEND THE MEETING.
ii
Doc. #346126 v.08
TABLE OF CONTENTS
Page
COVER PAGE...............................................................COVER
PROPOSAL 1: APPROVAL OF AGREEMENT AND PLAN OF REORGANIZATION.................3
SUMMARY..................................................................3
About the Proposed Reorganization....................................3
Comparative Fee Tables............................................4
Comparison of Investment Objectives, Policies, Strategies and
Principal Risks of the Governor Funds and Vision Funds..............30
Comparison of Operations............................................57
Investment Advisory Agreements...................................57
Sub-Advisory Agreements..........................................59
Portfolio Managers...............................................60
Administrative and Shareholder Services..........................63
Distribution Services............................................64
Purchase, Exchange and Redemption Procedures.....................65
Dividends and Other Distributions................................69
Tax Consequences....................................................70
INFORMATION ABOUT THE REORGANIZATION....................................70
Merger Between Keystone and M&T Corp................................70
Considerations by the Board of Trustees of the Governor Funds.......71
Description of the Plan of Reorganization...........................73
Description of Vision Fund Shares...................................74
Federal Income Tax Consequences.....................................75
Comparative Information on Shareholder Rights and Obligations.......75
Capitalization...................................................76
INFORMATION ABOUT THE VISION FUNDS AND THE GOVERNOR FUNDS...............79
Vision Funds........................................................79
Governor Funds......................................................80
PROPOSAL 2: APPROVAL OF A NEW ADVISORY AGREEMENT WITH MARTINDALE............80
INTRODUCTION............................................................80
Interim Advisory Agreement..........................................80
New Advisory Agreement..............................................81
BOARD CONSIDERATIONS....................................................82
COMPARISON OF THE PREVIOUS ADVISORY AGREEMENT AND NEW ADVISORY
AGREEMENT...............................................................82
Advisory Services...................................................82
Sub-Advisers........................................................83
Fees................................................................83
Payment of Expenses.................................................83
Brokerage...........................................................84
Limitation of Liability.............................................84
Continuance.........................................................85
Termination.........................................................85
ADDITIONAL INFORMATION REGARDING MARTINDALE.............................85
PROPOSAL 3: APPROVAL OF NEW SUB-ADVISORY AGREEMENT WITH BRINSON.............88
INTRODUCTION............................................................88
Interim Sub-Advisory Agreement......................................88
New Sub-Advisory Agreement..........................................89
BOARD CONSIDERATIONS....................................................90
COMPARISON OF THE PREVIOUS AGREEMENT AND NEW ADVISORY AGREEMENT.........90
Sub-Advisory Services...............................................91
Fees................................................................91
Payment of Expenses.................................................91
Brokerage...........................................................91
Limitation of Liability.............................................92
Continuance.........................................................93
Termination.........................................................93
ADDITIONAL INFORMATION REGARDING BRINSON................................93
VOTING INFORMATION..........................................................94
OUTSTANDING SHARES AND VOTING REQUIREMENTS..............................95
OTHER MATTERS..........................................................104
BOARD RECOMMENDATION...................................................105
EXHIBITS TO COMBINED PROSPECTUS/PROXY STATEMENT............................106
FORM OF AGREEMENT AND PLAN OF REORGANIZATION...........................133
VISION FUND PROSPECTUS....................................................
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Doc. #346126 v.08
PROSPECTUS/PROXY STATEMENT
NOVEMBER 9, 2000
ACQUISITION OF THE ASSETS OF:
THE GOVERNOR FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43218
1-800-766-3960
BY AND IN EXCHANGE FOR
VISION GROUP OF FUNDS
VISION SMALL CAP STOCK FUND - CLASS A SHARES
VISION INTERMEDIATE TERM BOND FUND - CLASS A SHARES
VISION INTERNATIONAL EQUITY FUND - CLASS A SHARES
VISION LARGE CAP CORE FUND - CLASS A SHARES
VISION INSTITUTIONAL LIMITED DURATION U.S. GOVERNMENT FUND
VISION MANAGED ALLOCATION FUND - AGGRESSIVE GROWTH - CLASS A SHARES
VISION MANAGED ALLOCATION FUND - CONSERVATIVE GROWTH - CLASS A SHARES
VISION MANAGED ALLOCATION FUND - MODERATE GROWTH - CLASS A SHARES
VISION PENNSYLVANIA MUNICIPAL INCOME FUND - CLASS A SHARES
VISION INSTITUTIONAL PRIME MONEY MARKET FUND
VISION TREASURY MONEY MARKET FUND - CLASS A SHARES
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
1-800-341-7400
This Prospectus/Proxy Statement describes a proposed Agreement and Plan
of Reorganization (the "Plan") related to your Governor Fund pursuant to
which you would receive shares of one of the mutual fund series of the Vision
Group of Funds listed above (each a "Vision Fund" and together the "Vision
Funds") in exchange for the shares of the Governor Fund you currently own.
Each Vision Fund and each Governor Fund is a portfolio of securities of an
open-end management investment company. Each Vision Fund is advised by
Manufacturers and Traders Trust Company ("M&T Bank"), the principal banking
subsidiary of M&T Bank Corporation ("M&T Corp."). Each Governor Fund is
advised by Martindale Andres & Company LLC ("Martindale"), which is also a
subsidiary of M&T Corp. If the Plan is approved with respect to your
Governor Fund, the Vision Fund will acquire all or substantially all of the
assets and liabilities of the Governor Fund, which has either identical or
substantially similar investment objectives and investment policies and
strategies, and Vision Fund shares will be distributed pro rata by each
Governor Fund to the holders of its shares, in complete liquidation of the
Governor Fund. In accordance with the terms of the Plan, each Governor Fund
shareholder will become the owner of the Vision Fund's shares having a total
net asset value equal to the total net asset value of such shareholder's
holdings in the Governor Fund. For the name of the Vision Fund into which
your Governor Fund would be reorganized and, if applicable, the name of the
class of shares that you would receive in the reorganization, please see
"Summary - About the Proposed Reorganization." For a comparison of the
investment objectives, policies, strategies and principal risks of the
Governor Fund and the Vision Fund into which your Governor Fund would be
reorganized, see "Summary - Comparison of Investment Objectives, Policies,
Strategies and Principal Risks of the Governor Funds and the Vision Funds."2
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THE BOARD OF TRUSTEES OF THE GOVERNOR FUNDS UNANIMOUSLY
RECOMMENDS APPROVAL OF THE PLAN.
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Shareholders are also being asked to approve a new investment advisory
agreement ("New Advisory Agreement") between the Governor Funds, on behalf of
each Governor Fund, and Martindale ("New Advisory Agreement"), each Fund's
current investment adviser, with substantially the same terms, conditions and
fees as the previous advisory agreement between Martindale and the Governor
Funds, on behalf of each Governor Fund. For each Governor Fund, the New
Advisory Agreement will be in effect for the period of time between the date
the shareholders of that Governor Fund approve the New Advisory Agreement
until the date of the Reorganization of the Fund (currently anticipated to
occur on or about December 18, 2000).
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THE BOARD OF TRUSTEES OF THE GOVERNOR FUNDS UNANIMOUSLY
RECOMMENDS APPROVAL OF THE NEW ADVISORY AGREEMENT.
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Shareholders of the International Equity Fund are being asked to
approve a new investment sub-advisory agreement ("New Sub-Advisory
Agreement") between Martindale and Brinson Partners, Inc. ("Brinson"), the
current sub-adviser to the International Equity Fund, with substantially the
same terms, conditions and fees as the previous investment sub-advisory
agreement between Martindale and Brinson. The New Sub-Advisory Agreement
will be in effect for the period of time between the date the shareholders of
the International Equity Fund approve the New Sub-Advisory Agreement until
the date of the Reorganization of the International Equity Fund (currently
anticipated to occur on or about December 18, 2000).
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THE BOARD OF TRUSTEES OF THE GOVERNOR FUNDS UNANIMOUSLY
RECOMMENDS APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT.
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You should retain this Prospectus/Proxy Statement, dated November 9,
2000, for future reference. It sets forth concisely the information about
each Vision Fund that a prospective investor should know before investing.
This Prospectus/Proxy Statement is accompanied by the Prospectus of the
Vision Fund into which your Governor Fund would be reorganized (dated
November 8, 2000), which is incorporated herein by reference. Statements of
Additional Information for each Vision Fund (one relating to the Vision
Fund's Prospectus, which is dated November 8, 2000, and a second one relating
to this Prospectus/Proxy Statement, which is dated November 9, 2000), all
containing additional information, have been filed with the Securities and
Exchange Commission ("SEC") and are incorporated herein by reference. Copies
of the Statements of Additional Information may be obtained without charge by
writing or calling The Vision Group of Funds at the address and telephone
number shown above.
Prospectuses dated October 30, 2000, and a Statement of Additional
Information, dated October 30, 2000, relating to the Governor Funds, have
been filed with the SEC and are incorporated herein by reference. The Annual
Report to Shareholders of the Governor Funds, dated June 30, 2000, has also
been filed with the SEC and is incorporated herein by reference. You may
request a copy of the Prospectus and Statement of Additional Information
relating to the Governor Funds without charge by writing or calling the
Governor Funds at the address and telephone number shown above.
This Prospectus/Proxy Statement will first be mailed to shareholders on
or about November 14, 2000.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES, OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROPOSAL 1: APPROVAL OF AGREEMENT AND PLAN OF REORGANIZATION
SUMMARY
This summary is qualified in its entirety by reference to the
additional information contained elsewhere in this Prospectus/Proxy
Statement, the Prospectus and Statement of Additional Information of each
Vision Fund, the Prospectus and Statement of Additional Information of each
Governor Fund, and the Plan. A Form of the Plan is attached to this
Prospectus/Proxy Statement as Exhibit A.
ABOUT THE PROPOSED REORGANIZATION
The Board of Trustees of the Governor Funds, of which each Governor
Fund is a series, has voted to recommend approval of the Plan to
shareholders of each Fund. Under the Plan, each Vision Fund would acquire
all or substantially all of the assets and liabilities of the corresponding
Governor Fund in exchange for the Vision Fund's shares to be distributed pro
rata by the Governor Fund to its shareholders in complete liquidation and
dissolution of the Governor Fund (the "Reorganization"). As a result of the
Reorganization, each shareholder of a Governor Fund would become the owner of
a Vision Fund's shares having a total net asset value equal to the total net
asset value of such shareholder's holdings in the Governor Fund on the date
of the Reorganization.
As a condition to the Reorganization, each Vision Fund and
corresponding Governor Fund will receive an opinion of counsel that the
Reorganization will be considered a tax-free "reorganization" under
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), so that neither the Vision Fund nor the Governor Fund nor the
shareholders of the Governor Fund will recognize any gain or loss. The tax
basis of the Vision Fund's shares received by Governor Fund shareholders
would be the same as the tax basis of their shares in the Governor Fund.
After the Reorganization is completed, each Governor Fund would be dissolved.
The following chart shows the Vision Fund into which each Governor Fund
would be reorganized if the Reorganization is approved, and, if applicable,
the name of the class of shares of the Vision Fund you would receive in the
Reorganization. The chart is arranged alphabetically according to the name
of the Governor Fund.
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Aggressive Growth Fund would be Vision Small Cap Stock Fund*
(Investor Shares) reorganized into (Class A Shares)
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Established Growth Fund would be Vision Large Cap Core Fund**
(Investor Shares) reorganized into (Class A Shares)
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Intermediate Term Income would be Vision Intermediate Term
Fund reorganized into Bond Fund*
(Investor Shares) (Class A Shares)
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International Equity Fund would be Vision International Equity
(Investor Shares) reorganized into Fund*
(Class A Shares)
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Lifestyle Conservative would be Vision Managed Allocation
Growth Fund reorganized into Fund - Conservative Growth*
(Investor Shares) (Class A Shares)
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Lifestyle Growth Fund would be Vision Managed Allocation
(Investor Shares) reorganized into Fund - Aggressive Growth*
(Class A Shares)
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Lifestyle Moderate Growth would be Vision Managed Allocation
Fund reorganized into Fund - Moderate Growth*
(Investor Shares) (Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Limited Duration would be Vision Institutional Limited
Government Securities Fund reorganized into Duration U.S. Government
(Investor Shares) Fund*
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Pennsylvania Municipal would be Vision Pennsylvania
Bond Fund reorganized into Municipal Income Fund*
(Investor Shares) (Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Prime Money Market Fund would be Vision Institutional Prime
(Investor Shares) reorganized into Money Market Fund*
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
U.S. Treasury Obligations would be Vision Treasury Money Market
Money Market Fund reorganized into Fund
(Investor Shares) (Class A Shares)
-------------------------------------------------------------------------------
* THIS FUND HAS RECENTLY BEEN ORGANIZED FOR THE PURPOSE OF CONTINUING THE
INVESTMENT OPERATIONS OF THE CORRESPONDING GOVERNOR FUND, AND HAS NO
ASSETS OR PRIOR HISTORY OF INVESTMENT OPERATIONS.
** THIS FUND WAS ORGANIZED EARLIER THIS YEAR AND BECAME EFFECTIVE ON JUNE 30,
2000, BUT IS NOT SCHEDULED TO COMMENCE OPERATIONS PRIOR TO THE
REORGANIZATION.
COMPARATIVE FEE TABLES
The Governor Funds, like all mutual funds, incur certain expenses in
their operations and, as a shareholder of a Governor Fund, you pay these
expenses indirectly. The Vision Funds also incur expenses in their
operations. The expenses include management fees, as well as the costs of
maintaining accounts, administration, providing shareholder liaison services
and distribution services, and other activities. The following tables
compare the expenses paid by the Governor Funds with the expenses that you
would incur indirectly as a shareholder of the Vision Fund into which your
shares would be exchanged. The tables also include any shareholder fees
which would be paid directly from your investment. YOU WILL NOT BE CHARGED
ANY SALES LOADS FOR ACQUIRING SHARES OF THE VISION FUND IN EXCHANGE FOR
SHARES OF THE GOVERNOR FUND YOU CURRENTLY OWN IN THE REORGANIZATION. After
taking into account the contractual fee waivers and expense limitations of
the Vision Funds that will be in effect for a one-year period starting from
the Closing of the Reorganization (as described under "Description of the
Plan of Reorganization"), and the expiration on October 31, 2000, of the
contractual fee waivers that were in effect for the Governor Funds, while
there can be no assurances, the various fees and expense ratios to be
incurred by a Vision Fund after the proposed Reorganization generally are
expected to be lower than those currently incurred by the corresponding
Governor Fund. The only exception is the Vision Pennsylvania Municipal
Income Fund's annual operating expenses (which are expected to be higher by
0.03%).
A comparison of fees is provided in the following tables. In the case
of the Governor Funds, because the contractual fee waivers and reimbursements
that had been in place with respect to the Governor Funds ended on October
31, 2000, those waivers and reimbursements are disclosed in the footnotes to
the fee table instead of the body of the table. In the case of each Vision
Fund, various contractual fee waivers and expense reimbursements will be in
place for the one-year period starting from the Closing of the
Reorganization. All of these contractual fee waivers and reimbursements are
reflected in the body of the fee table instead of in the footnotes. The
following comparative fee tables are arranged alphabetically according to the
name of the Governor Fund.
27
Doc. #346126 v.08
This table describes the fees and expenses of the Class A Shares of the
VISION SMALL CAP STOCK FUND, a new series, as well as pro forma fees and
expenses after giving effect to the Reorganization, and describes the fees
and expenses of the Investor Shares of the GOVERNOR AGGRESSIVE GROWTH FUND
for its most recent fiscal year end (June 30, 2000).
<TABLE>
<CAPTION>
VISION SMALL GOVERNOR VISION
CAP STOCK FUND AGGRESSIVE PRO FORMA
(CLASS A GROWTH ESTIMATED
SHARES) 1 FUND COMBINED
(INVESTOR
SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
5.50%2
5.50%
5.50%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management Fee................................................................
0.85%........................................................................10.85%
Distribution (12b-1)
Fee......................................................
0.25%3.............None.......................................................0.25%3
Shareholder Services
Fee......................................................
0.25%4.............None7......................................................0.25%4
Other
Expenses................................................................
0.28%5........................................................................0.40%7
0.28%5
Total Annual Fund Operating
Expenses..........................................
1.63%.....................1.40%8..............................................1.63%
Total Waivers of Fund
Expenses................................................ 0.30%6
.............N/A8.............................................................0.30%6
Total Annual Fund Operating Expenses (After
Waivers)..........................
1.33%.....................................1.40%...............................1.33%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 To date, the Vision Small Cap Stock Fund has had no operations.
2 The Vision Small Cap Stock Fund's Class A Shares typically have a maximum
sales charge of 5.50%. However, holders of the Governor Aggressive Growth
Fund's Investor Shares will not be charged a sales charge when receiving
Vision Small Cap Stock Fund shares in connection with the Reorganization nor
will they be charged a sales charge if they decide to exchange their shares
of the Vision Small Cap Stock Fund for another Vision mutual fund.
3 Pursuant to a contractual agreement with the Fund's distributor, the
Vision Small Cap Stock Fund will not pay or accrue the Distribution (12b-1)
Fee for Class A Shares for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
If the Fund were to accrue or pay the Distribution Fee, it would be able to
pay up to 0.25% of its average daily net assets as noted in the table.
4 Pursuant to a contractual agreement with the Fund's administrator, the
Vision Small Cap Stock Fund will pay and accrue the Shareholder Services Fee
for Class A Shares in an amount equal to 0.20% of the Fund's average daily
net assets for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
The Fund will not accrue or pay the remaining 0.05% of the Shareholder
Services Fee for that time period.
5 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
6 As stated in notes 3 and 4, the Vision Small Cap Stock Fund will not
accrue or pay the Distribution (12b-1) Fee and will accrue or pay only a
portion of the Shareholder Services Fee pursuant to a contractual agreement
for a one-year period starting from the Closing of the Reorganization, which
is anticipated to occur on or about December 18, 2000.
7 Other Expenses include administration fees, transfer agency fees, and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Aggressive Growth Fund's distributor) and other financial
institutions ("Servicing Organizations") under an Administration Services
Plan up to an annual rate of 0.25% of the daily net assets of the Fund shares
owned by the shareholders with whom the Service Organization has a servicing
relationship. Some of these expenses could be characterized as Shareholder
Services Fees but the current Prospectus of the Fund includes these expenses
under the heading Other Expenses. The Fund's adviser and administrators were
contractually committed to waive a portion of their fees until October 31,
2000.
8 As stated in note 7, the Governor Aggressive Growth Fund's adviser and
administrators waived certain amounts until October 31, 2000. These waivers
are shown below along with the net expenses the Fund actually paid until
October 31, 2000.
Total Waivers of Fund Expenses..........................................
0.34%
Total Actual Annual Fund Operating Expenses (After Waivers).............
1.06%
This table describes the fees and expenses of the Class A Shares of the
VISION LARGE CAP CORE FUND, a new series, as well as pro forma fees and
expenses after giving effect to the Reorganization, and describes the fees
and expenses of the Investor Shares of the GOVERNOR ESTABLISHED GROWTH FUND
for its most recent fiscal year end (June 30, 2000).
<TABLE>
<CAPTION>
VISION LARGE GOVERNOR VISION
CAP CORE FUND ESTABLISHEDPRO FORMA
(CLASS A GROWTH ESTIMATED
SHARES) 1 FUND COMBINED
(INVESTOR
SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
5.50%2
5.50% 5.50%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
0.85%...0.75%.................................................................0.85%
Distribution (12b-1)
Fee......................................................
0.25%3.............None.......................................................0.25%3
Shareholder Services
Fee......................................................
0.25%4.............None7......................................................0.25%4
Other
Expenses................................................................
0.22%5........................................................................0.38%7
0.22%5
Total Annual Fund Operating Expenses.......................................... 1.57%
1.13%8...............1.57%
Total Waiver of Fund Expenses................................................. 0.50%6
N/A..................0.50%6
Total Annual Fund Operating Expenses (After Waivers) ......................... 1.07%
1.13%8...............1.07%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 Since its inception on June 20, 2000, the Vision Large Cap Core Fund has
had no operations.
2 The Vision Large Cap Core Fund Class A Shares typically have a maximum
sales charge of 5.50%. However, shareholders of the Governor Established
Growth Fund's Investor Shares will not be charged a sales charge when
receiving Vision Large Cap Core Fund shares in connection with the
Reorganization nor will they be charged a sales charge if they decide to
exchange those shares of the Vision Large Cap Core Fund for another Vision
mutual fund.
3 Pursuant to a contractual agreement with the Fund's distributor, the
Vision Large Cap Core Fund will not pay or accrue the Distribution (12b-1)
Fee for Class A Shares for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
If the Fund were to accrue or pay the Distribution Fee, it would be able to
pay up to 0.25% of its average daily net assets as noted in the table.
4 Pursuant to a contractual agreement with the Fund's administrator, the
Vision Large Cap Core Fund will not pay or accrue the Shareholder Services
Fee for Class A Shares for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
If the Fund were to accrue or pay the Shareholder Services Fees, it would be
able to pay up to 0.25% of its average daily net assets as noted in the table.
5 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
6 As stated in notes 3 and 4, the Vision Large Cap Core Fund will not accrue
or pay the Distribution (12b-1) or Shareholder Services Fee pursuant to a
contractual agreement for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
7 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Established Growth Fund's distributor) and other financial
institutions ("Service Organizations") under an Administrative Services Plan
up to an annual rate of 0.25% of the daily net assets of the Fund shares
owned by the shareholders with whom the Service Organization has a servicing
relationship. Some of these expenses could be characterized as Shareholder
Services Fees but the current Prospectus of the Fund includes these expenses
under the heading Other Expenses. The Fund's adviser and administrators were
contractually committed to waive a portion of their fees until October 31,
2000.
8 As stated in note 7, the Governor Established Growth Fund's adviser and
administrators waived certain amounts until October 31, 2000. These waivers
are shown below along with the net expenses the Fund actually paid until
October 31, 2000.
Total Waivers of Fund Expenses..........................................
0.19%
Total Actual Annual Fund Operating Expenses (After Waivers).............
0.94%
This table describes the fees and expenses of the Class A Shares of the
VISION INTERMEDIATE TERM BOND FUND, a new series, as well as pro forma fees
and expenses after giving effect to the Reorganization, and describes the
fees and expenses of the Investor Shares of the GOVERNOR INTERMEDIATE TERM
INCOME FUND for its most recent fiscal year end (June 30, 2000).
<TABLE>
<CAPTION>
VISION GOVERNOR VISION
INTERMEDIATE INTERMEDIATPRO FORMA
TERM BOND FUND TERM ESTIMATED
(CLASS A INCOME COMBINED
SHARES) 1 FUND
(INVESTOR
SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
4.50%2
4.50%
4.50%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management Fee................................................................
0.70%3.......................................................................00.70%3
Distribution (12b-1)
Fee......................................................
0.25%4.............None.......................................................0.25%4
Shareholder Services
Fee......................................................
0.25%5.............None8......................................................0.25%5
Other
Expenses................................................................
0.24%6........................................................................0.29%8
0.24%6
Total Annual Fund Operating
Expenses..........................................
1.44%.....................0.89%9..............................................1.44%
Total Waivers of Fund
Expenses................................................ 0.73%7
.............N/A9.............................................................0.73%7
Total Annual Fund Operating Expenses (After
Waivers)..........................
0.71%.....................................0.89%...............................0.71%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 To date, the Vision Intermediate Term Bond Fund has had no operations.
2 The Vision Intermediate Term Bond Fund's Class A Shares typically have a
maximum sales charge of 4.50%. However, holders of the Governor Intermediate
Term Income Fund's Investor Shares will not be charged a sales charge when
receiving Vision Intermediate Term Bond Fund Class A Shares in connection
with the Reorganization nor will they be charged a sales charge if they
decide to exchange their Class A Shares of the Vision Intermediate Term Bond
Fund for another Vision mutual fund.
3 The Fund's adviser has agreed to contractually waive a portion of the
Management Fee. The Management Fee paid by the Fund (after the waiver) will
not exceed 0.47% for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
4 Pursuant to a contractual agreement with the Fund's distributor, the
Vision Intermediate Term Bond Fund will not pay or accrue the Distribution
(12b-1) Fee for Class A Shares for a one-year period starting from the
Closing of the Reorganization, which is anticipated to occur on or about
December 18, 2000. If the Fund were to accrue or pay the Distribution Fee,
it would be able to pay up to 0.25% of its average daily net assets as noted
in the table.
5 Pursuant to a contractual agreement with the Fund's administrator, the
Vision Intermediate Term Bond Fund will not pay or accrue the Shareholder
Services Fee for Class A Shares for a one-year period starting from the
Closing of the Reorganization, which is anticipated to occur on or about
December 18, 2000. If the Fund were to accrue or pay the Shareholder
Services Fee, it would be able to pay up to 0.25% of its average daily net
assets as noted in the table.
6 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
7 As stated in notes 3, 4 and 5, the Vision Intermediate Term Bond Fund's
adviser has agreed to contractually waive a portion of its Management Fee and
the Fund will not accrue or pay the Distribution (12b-1) Fee or Shareholder
Services Fee pursuant to a contractual agreement for a one-year period
starting from the Closing of the Reorganization, which is anticipated to
occur on or about December 18, 2000.
8 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Intermediate Term Income Fund's distributor) and other financial
institutions ("Service Organizations") under an Administrative Services Plan
up to an annual rate of 0.25% of the daily net assets of the Fund shares
owned by the shareholders with whom the Service Organization has a servicing
relationship. Some of these expenses could be characterized as Shareholder
Services Fees but the current Prospectus of the Fund includes these expenses
under the heading Other Expenses. The Fund's adviser and administrators
were contractually committed to waive a portion of their fees until October
31, 2000.
9 As stated in note 8, the Governor Intermediate Term Income Fund's adviser
and administrators waived certain amounts until October 31, 2000. These
waivers are shown below along with the net expenses the Fund actually paid
until October 31, 2000.
Total Waivers of Fund Expenses..........................................
0.33%
Total Actual Annual Fund Operating Expenses (After Waivers).............
0.56%
This table describes the fees and expenses of the Class A Shares of the
VISION INTERNATIONAL EQUITY FUND, a new series, as well as pro forma fees and
expenses after giving effect to the Reorganization, and describes the fees
and expenses of the Investor Shares of the GOVERNOR INTERNATIONAL EQUITY FUND
for its most recent fiscal year end (June 30, 2000).
<TABLE>
<CAPTION>
VISION GOVERNOR VISION
INTERNATIONAL INTERNATIONALPRO FORMA
EQUITY FUND EQUITY FUND ESTIMATED
(CLASS A (INVESTOR COMBINED
SHARES) 1 SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
5.50%2
5.50%
5.50%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
1.00%3..1.25%.................................................................1.00%3
Distribution (12b-1)
Fee......................................................
0.25%4.............None.......................................................0.25%4
Shareholder Services
Fee......................................................
0.25%..............None7......................................................0.25%
Other
Expenses................................................................
0.56%5........................................................................0.60%7
0.56%5
Total Annual Fund Operating
Expenses..........................................
2.06%.....................1.85%8..............................................2.06%
Total Waivers of Fund
Expenses................................................ 0.35%6
.............N/A8.............................................................0.35%6
Total Annual Fund Operating Expenses (After
Waivers)..........................
1.71%.....................................1.85%...............................1.71%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 To date, the Vision International Equity Fund has had no operations.
2 The Vision International Equity Fund's Class A Shares typically have a
maximum sales charge of 5.50%. However, holders of the Governor
International Equity Fund's Investor Shares will not be charged a sales
charge when receiving their Vision International Equity Fund Class A Shares
in connection with the Reorganization nor will they be charged a sales charge
if they decide to exchange their Class A Shares of the Vision International
Equity Fund for another Vision mutual fund.
3 The Fund's adviser has contractually agreed to waive a portion of the
Management Fee. The Management Fee paid by the Fund (after the waiver) will
not exceed 0.90% for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
4 Pursuant to a contractual agreement with the Fund's distributor, the
Vision International Equity Fund will not pay or accrue the Distribution
(12b-1) Fee for Class A Shares for a one-year period starting from the
Closing of the Reorganization, which is anticipated to occur on or about
December 18, 2000. If the Fund were to accrue or pay the Distribution Fee,
it would be able to pay up to 0.25% of its average daily net assets as noted
in the table.
5 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
6 As stated in notes 3 and 4, the Vision International Equity Fund's adviser
has contractually agreed to waive a portion of the Fund's Management Fee and
the Fund will not accrue or pay the Distribution (12b-1) Fee pursuant to a
contractual agreement for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
7 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor International Equity Fund's distributor) and other financial
institutions ("Servicing Organizations") under an Administration Services
Plan up to an annual rate of 0.25% of the daily net assets of the Fund shares
owned by the shareholders with whom the Service Organization has a servicing
relationship. Some of these expenses could be characterized as Shareholder
Services Fees but the current Prospectus of the Fund includes these expenses
under the heading Other Expenses. The Fund's adviser and administrators were
contractually committed to waive a portion of their fees until October 31,
2000.
8 As stated in note 7, the Governor International Equity Fund's adviser and
administrators waived certain amounts until October 31, 2000. These waivers
are shown below along with the net expenses the Fund actually paid until
October 31, 2000.
Total Waivers of Fund Expenses..........................................
0.88%
Total Actual Annual Fund Operating Expenses (After Waivers).............
0.97%
This table describes the fees and expenses of the Class A Shares of the
VISION MANAGED ALLOCATION FUND - CONSERVATIVE GROWTH, a new fund, as well as
pro forma fees and expenses after giving effect to the Reorganization, and
describes the fees and expenses of the Investor Shares of the GOVERNOR
LIFESTYLE CONSERVATIVE GROWTH FUND for its most recent fiscal year end (June
30, 2000).
<TABLE>
<CAPTION>
VISION GOVERNOR VISION
MANAGED LIFESTYLE PRO FORMA
ALLOCATION CONSERVATIVEESTIMATED
FUND - GROWTH COMBINED
CONSERVATIVE FUND
GROWTH (CLASS (INVESTOR
A SHARES) 1 SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
5.00%2
4.50%
5.00%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
0.25%3...0.25%................................................................0.25%3
Distribution (12b-1)
Fee......................................................
0.25%4.............0.50%8.....................................................0.25%4
Shareholder Services
Fee......................................................
0.25%5.............None9......................................................0.25%5
Other Expenses................................................................
38.07%6.......................................................................24.81%9
38.07%6
Total Annual Fund Operating Expenses..........................................
38.82%........................................................................25.56%10
38.82%10
Total Waivers and Reimbursements of Fund Expenses.............................
37.82%7.......................................................................N/A10
37.82%7
Total Annual Fund Operating Expenses (After Waivers and
Reimbursements).......
1.00%.................................................25.56%..................
1.00%
</TABLE>
------------------------------------------------------------------------------
1 To date, the Vision Managed Allocation Fund - Conservative Growth has had
no operations.
2 The Vision Managed Allocation Fund - Conservative Growth Class A Shares
typically have a maximum sales charge of 5.00%. However, shareholders of the
Governor Lifestyle Conservative Growth Fund's Investor Shares will not be
charged a sales charge when receiving Vision Managed Allocation Fund -
Conservative Growth Class A Shares in connection with the Reorganization nor
will they be charged a sales charge if they decide to exchange their shares
of the Vision Managed Allocation Fund - Conservative Growth for another
Vision mutual fund.
3 The Vision Managed Allocation Fund - Conservative Growth's adviser has
contractually agreed to waive the entire Management Fee for a one-year period
starting from the Closing of the Reorganization, which is anticipated to
occur on or about December 18, 2000. In addition, the adviser has
contractually agreed to reimburse certain operating expenses of this Fund's
Class A Shares so that the annual fund operating expenses do not exceed 1.00%
for a one-year period, starting from the Closing of the Reorganization.
4 Pursuant to a contractual agreement with the Fund's distributor, the
Vision Managed Allocation Fund - Conservative Growth will not pay or accrue
the Distribution (12b-1) Fee for Class A Shares for a one-year period
starting from the Closing of the Reorganization, which is anticipated to
occur on or about December 18, 2000. If the Fund were to accrue or pay the
Distribution Fee, it would be able to pay up to 0.25% of its average daily
net assets as noted in the table.
5 Pursuant to contractual expense limitations stated in note 3, the Vision
Managed Allocation Fund - Conservative Growth does not expect to pay or
accrue the Shareholder Services Fee for Class A Shares for a one-year period
starting from the Closing of the Reorganization, which is anticipated to
occur on or about December 18, 2000. If the Fund were to accrue or pay the
Shareholder Services Fee, it would be able to pay up to 0.25% of its average
daily net assets as noted in the table.
6 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
7 As stated in notes 3, 4 and 5, the Vision Managed Allocation Fund -
Conservative Growth's adviser agreed to contractually waive the entire
Management Fee and reimburse certain Fund operating expenses, and the Fund
will not accrue or pay the Distribution (12b-1) Fee and does not expect to
pay or accrue the Shareholder Services Fee pursuant to such agreements for a
one-year period starting from the Closing of the Reorganization, which is
anticipated to occur on or about December 18, 2000.
8 Long-term shareholders of the Governor Lifestyle Conservative Growth Fund
may pay more than the maximum front-end sales charge permitted by the
National Association of Securities Dealers Regulation, Inc., due to the
recurring nature of 12b-1 fees.
9 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Lifestyle Conservative Growth Fund's distributor) and other
financial institutions ("Service Organizations") under an Administrative
Services Plan up to an annual rate of 0.25% of the daily net assets of the
Fund shares owned by the shareholders with whom the Service Organization has
a servicing relationship. Some of these expenses could be characterized as
Shareholder Services Fees but the current Prospectus of the Fund includes
these expenses under the heading Other Expenses. Other Expenses also include
expenses for the underlying funds. Expenses for the underlying funds of the
Fund are based upon the strategic allocation of the Fund's investment in the
underlying funds and upon the actual total operating expenses of the
underlying funds (including any current waivers and expense limitations of
the underlying funds). The net annual operating expenses for the underlying
funds for the fiscal year or period ended June 30, 2000, were 0.47%, 0.69%,
0.61%, 0.56%, 0.94%, 1.06%, and 0.97% for the Governor Prime Money Market,
Governor U.S. Treasury Obligations Money Market, Governor Limited Duration
Government Securities, Governor Intermediate Term Income, Governor
Established Growth, Governor Aggressive Growth and Governor International
Equity Funds, respectively. Actual underlying fund expenses incurred by the
Fund may vary with changes in the allocation of the Fund's assets among the
underlying funds and with other events that directly affect the expenses of
the underlying funds.
10 The Governor Lifestyle Conservative Growth Fund's adviser and
administrators waived a portion of their respective fees until October 31,
2000, pursuant to a contract with the Fund dated October 29, 1999. The
Fund's adviser had contractually agreed to reimburse expenses until October
31, 2000 to the extent necessary to prevent the Fund's net annual fund
operating expenses, excluding the expenses for the underlying funds, from
exceeding 1.65%. This expense reimbursement obligation was also pursuant to
the contract with the Fund dated October 29, 1999. In addition, the Fund's
adviser has voluntarily agreed to extend this 1.65% expense limitation after
October 31, 2000, but the adviser may end this voluntary expense limitation
at any time at its discretion.
Total Waivers of Fund Expenses..........................................
23.91%
Total Actual Annual Fund Operating Expenses (After Waivers and Reimbursements)
1.65%
This table describes the fees and expenses of the Class A Shares of the
VISION MANAGED ALLOCATION FUND - AGGRESSIVE GROWTH, a new series, as well as
pro forma fees and expenses after giving effect to the Reorganization, and
describes the fees and expenses of Investor Shares of the GOVERNOR LIFESTYLE
GROWTH FUND for its most recent fiscal year end (June 30, 2000).
<TABLE>
<CAPTION>
VISION MANAGED GOVERNOR VISION
ALLOCATION LIFESTYLE PRO FORMA
FUND - GROWTH ESTIMATED
AGGRESSIVE FUND COMBINED
GROWTH (CLASS (INVESTOR
A SHARES) 1 SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
5.00%2
4.50%
5.00%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
0.25%3..0.25%.................................................................0.25%3
Distribution (12b-1)
Fee......................................................
0.25%4.............0.50%8.....................................................0.25%4
Shareholder Services
Fee......................................................
0.25%5.............None9......................................................0.25%5
Other
Expenses................................................................
7.91%6........................................................................8.78%9
7.91%6
Total Annual Fund Operating
Expenses..........................................
8.66%.....................9.54%10.............................................8.66%
Total Waivers and Reimbursements of Fund
Expenses.............................
7.66%7.................................N/A10..................................7.66%7
Total Annual Fund Operating Expenses (After Waivers and
Reimbursements).......
1.00%.................................................9.54%...................1.00%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 To date, the Vision Managed Allocation Fund - Aggressive Growth has had no
operations.
2 The Vision Managed Allocation Fund - Aggressive Growth Class A Shares
typically have a maximum sales charge of 5.00%. However, Governor Lifestyle
Growth Fund Investor Shares shareholders will not be charged a sales charge
when receiving your Vision Managed Allocation Fund - Aggressive Growth Class
A Shares in connection with the Reorganization nor will they be charged a
sales charge if they decide to exchange their shares of the Vision Fund for
another Vision mutual fund.
3 The Vision Managed Allocation Fund - Aggressive Growth's adviser has
contractually agreed to waive the entire Management Fee for a one-year period
starting from the Closing of the Reorganization, which is anticipated to
occur on or about December 18, 2000. In addition, the adviser has
contractually agreed to reimburse certain operating expenses of this Fund's
Class A Shares so that the annual fund operating expenses do not exceed 1.00%
for a one-year period, starting from the Closing of the Reorganization.
4 Pursuant to a contractual agreement with the Fund's distributor, the
Vision Managed Allocation Fund - Aggressive Growth will not pay or accrue
Distribution (12b-1) Fees for Class A Shares for a one-year period starting
from the Closing of the Reorganization, which is anticipated to occur on or
about December 18, 2000. If the Fund were to accrue or pay the Distribution
Fee, it would be able to pay up to 0.25% of its average daily net assets as
noted in this table.
5 Pursuant to the contractual expense limitations stated in note 3, the
Vision Managed Allocation Fund - Aggressive Growth does not expect to pay or
accrue the Shareholder Services Fees for Class A Shares for a one-year period
starting from the Closing of the Reorganization, which is anticipated to
occur on or about December 18, 2000. If the Fund were to accrue or pay the
Shareholder Services Fees, it would be able to pay up to 0.25% of its average
daily net assets as noted in this table.
6 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
7 As stated in notes 3, 4 and 5, the Vision Managed Allocation Fund -
Aggressive Growth's adviser agrees to contractually waive the entire
Management Fee and reimburse certain Fund operating expenses, and the Fund
will not accrue or pay the Distribution (12b-1) Fee and does not expect to
pay or accrue the Shareholder Services Fee pursuant to such agreements for a
one-year period starting from the Closing of the Reorganization, which is
anticipated to occur on or about December 18, 2000.
8 Long-term shareholders of the Governor Lifestyle Growth Fund may pay more
than the maximum front-end sales charge permitted by the National Association
of Securities Dealers Regulation, Inc., due to the recurring nature of 12b-1
fees.
9 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Lifestyle Growth Fund's distributor) and other financial
institutions ("Service Organizations") under an Administrative Services Plan
up to an annual rate of 0.25% of the daily net assets of the Fund shares
owned by the shareholders with whom the Service Organization has a servicing
relationship. Some of these expenses could be characterized as Shareholder
Services Fees but the current Prospectus of the Fund includes these expenses
under the heading Other Expenses. Other Expenses also include expenses for
the underlying funds. Expenses for the underlying funds of the Fund are
based upon the strategic allocation of the Fund's investment in the
underlying funds and upon the actual total operating expenses of the
underlying funds (including any current waivers and expense limitations of
the underlying funds). The net annual operating expenses for the underlying
funds for the fiscal year or period ended June 30, 2000, were 0.47%, 0.69%,
0.61%, 0.56%, 0.94%, 1.06%, and 0.97% for the Governor Prime Money Market,
Governor U.S. Treasury Obligations Money Market, Governor Limited Duration
Government Securities, Governor Intermediate Term Income, Governor
Established Growth, Governor Aggressive Growth, and Governor International
Equity Funds, respectively. Actual underlying fund expenses incurred by the
Fund may vary with changes in the allocation of the Fund's assets among the
underlying funds and with other events that directly affect the expenses of
the underlying funds.
10 The Governor Lifestyle Growth Fund's adviser and administrators waived a
portion of their respective fees until October 31, 2000, pursuant to a
contract with the Fund dated October 29, 1999. The Fund's adviser had
contractually agreed to reimburse expenses until October 31, 2000 to the
extent necessary to prevent the Fund's net annual fund operating expenses,
excluding the expenses for the underlying funds, from exceeding 1.65%. This
expense reimbursement obligation was also pursuant to the contract with the
Fund dated October 29, 1999. In addition, the Fund's adviser has voluntarily
agreed to extend this 1.65% expense limitation after October 31, 2000, but
the adviser may end this voluntary expense limitation at any time at its
discretion.
Total Waivers of Fund Expenses..........................................
7.89%
Total Actual Annual Fund Operating Expenses (After Waivers and Reimbursements)
1.65%
This table describes the fees and expenses of the Class A Shares of the
VISION MANAGED ALLOCATION FUND - MODERATE GROWTH, a new series, as well as
pro forma fees and expenses after giving effect to the Reorganization, and
describes the fees and expenses of the Investor Shares of the GOVERNOR
LIFESTYLE MODERATE GROWTH FUND for its most recent fiscal year end (June 30,
2000).
<TABLE>
<CAPTION>
VISION MANAGED GOVERNOR VISION
ALLOCATION LIFESTYLE PRO FORMA
FUND - MODERATE ESTIMATED
MODERATE GROWTH COMBINED
GROWTH (CLASS FUND
A SHARES) 1 (INVESTOR
SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
5.00%2
4.50%
5.00%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
0.25%3..0.25%.................................................................0.25%3
Distribution (12b-1)
Fee......................................................
0.25%4.............0.50%8.....................................................0.25%4
Shareholder Services
Fee......................................................
0.25%5.............None9......................................................0.25%5
Other
Expenses................................................................
8.40%6........................................................................7.10%9
8.40%6
Total Annual Fund Operating
Expenses..........................................
9.15%.....................7.86%10.............................................9.15%
Total Waivers and Reimbursements of Fund
Expenses.............................
8.15%7.................................N/A10..................................8.15%7
Total Annual Fund Operating Expenses (After Waivers and
Reimbursements).......
1.00%.................................................7.86%...................1.00%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 To date, the Vision Managed Allocation Fund - Moderate Growth has had no
operations.
2 The Vision Managed Allocation Fund - Moderate Growth Class A Shares
typically have a maximum sales charge of 5.00%. However, Governor Lifestyle
Moderate Growth Fund shareholders will not be charged a sales charge when
receiving Vision Managed Allocation Fund - Moderate Growth Class A Shares in
connection with the Reorganization nor will they be charged a sales charge if
they decide to exchange their shares of the Vision Fund for another Vision
mutual fund.
3 The Vision Managed Allocation Fund - Moderate Growth's adviser has
contractually agreed to waive the entire Management Fee for a one-year period
starting from the Closing of the Reorganization, which is anticipated to
occur on or about December 18, 2000. In addition, the adviser has
contractually agreed to reimburse certain operating expenses of this Fund's
Class A Shares so that the annual fund operating expenses do not exceed 1.00%
for a one-year period, starting from the Closing of the Reorganization.
4 Pursuant to a contractual agreement with the Fund's distributor, the
Vision Managed Allocation Fund - Moderate Growth will not pay or accrue the
Distribution (12b-1) Fee for Class A Shares for a one-year period starting
from the Closing of the Reorganization, which is anticipated to occur on or
about December 18, 2000. If the Fund were to accrue or pay the Distribution
Fee, it would be able to pay up to 0.25% of its average daily net assets as
noted in the table.
5 Pursuant to the contractual expense limitations stated in note 3, the
Vision Managed Allocation Fund - Moderate Growth does not expect to pay or
accrue the Shareholder Services Fee for Class A Shares for a one-year period
starting from the Closing of the Reorganization, which is anticipated to
occur on or about December 18, 2000. If the Fund were to accrue or pay the
Shareholder Services Fee, it would be able to pay up to 0.25% of its average
daily net assets as noted in the table.
6 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
7 As stated in notes 3, 4 and 5, the Vision Managed Allocation Fund -
Moderate Growth's adviser agreed to contractually waive the entire Management
Fee and reimburse certain Fund operating expenses, and the Fund will not
accrue or pay the Distribution (12b-1) Fee and does not expect to pay or
accrue the Shareholder Services Fee pursuant to such agreements for a
one-year period starting from the Closing of the Reorganization, which is
anticipated to occur on or about December 18, 2000.
8 Long-term shareholders of the Governor Lifestyle Moderate Growth Fund may
pay more than the maximum front-end sales charge permitted by the National
Association of Securities Dealers Regulation, Inc., due to the recurring
nature of 12b-1 fees.
9 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Lifestyle Moderate Growth Fund's distributor) and other
financial institutions ("Service Organizations") under an Administrative
Services Plan up to an annual rate of 0.25% of the daily net asset value of
the Fund shares owned by the shareholders with whom the Service Organization
has a servicing relationship. Some of these expenses could be characterized
as Shareholder Services Fees but the current Prospectus of the Fund includes
these expenses under the heading Other Expenses. Other Expenses also include
expenses for the underlying funds. Expenses for the underlying funds of the
Fund are based upon the strategic allocation of the Fund's investment in the
underlying funds and upon the actual total operating expenses of the
underlying funds (including any current waivers and expense limitations of
the underlying funds). The net annual operating expenses for the underlying
funds for the fiscal year or period ended June 30, 2000, were 0.47%, 0.69%,
0.61%, 0.56%, 0.94%, 1.06%, and 0.97% for the Governor Prime Money Market,
Governor U.S. Treasury Obligations Money Market, Governor Limited Duration
Government Securities, Governor Intermediate Term Income, Governor
Established Growth, Governor Aggressive Growth, and Governor International
Equity Funds, respectively. Actual underlying fund expenses incurred by the
Fund may vary with changes in the allocation of the Fund's assets among the
underlying funds and with other events that directly affect the expenses of
the underlying funds.
10 The Governor Lifestyle Moderate Growth Fund's adviser and administrators
waived a portion of their respective fees until October 31, 2000, pursuant to
a contract with the Fund dated October 29, 1999. The Fund's adviser had
contractually agreed to reimburse expenses until October 31, 2000 to the
extent necessary to prevent the Fund's net annual fund operating expenses,
excluding the expenses for the underlying funds, from exceeding 1.65%. This
expense reimbursement obligation was also pursuant to the contract with the
Fund dated October 29, 1999. In addition, the Fund's adviser has voluntarily
agreed to extend this 1.65% expense limitation after October 31, 2000, but
the adviser may end this voluntary expense limitation at any time at its
discretion.
Total Waivers of Fund Expenses..........................................
6.21%
Total Actual Annual Fund Operating Expenses (After Waivers and Reimbursements)
1.65%
This table describes the fees and expenses of VISION INSTITUTIONAL LIMITED
DURATION U.S. GOVERNMENT FUND, a new series, as well as pro forma fees and
expenses after giving effect to the Reorganization, and describes the fees
and expenses of the Investor Shares of the GOVERNOR LIMITED DURATION
GOVERNMENT SECURITIES FUND for its most recent fiscal year end (June 30,
2000).
<TABLE>
<CAPTION>
VISION GOVERNOR VISION
INSTITUTIONAL LIMITED PRO FORMA
LIMITED DURATION ESTIMATED
DURATION U.S. GOVERNMENT COMBINED
GOVERNMENT SECURITIES
FUND1 FUND
(INVESTOR
SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
3.00%2
3.00%
3.00%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
0.60%3...0.60%................................................................0.60%3
Distribution (12b-1)
Fee......................................................
0.25%4.............None.......................................................0.25%4
Shareholder Services
Fee......................................................
0.25%5.............None8......................................................0.25%5
Other
Expenses................................................................
0.36%6........................................................................0.34%8
0.36%6
Total Annual Fund Operating
Expenses..........................................
1.46%.....................0.94%9..............................................1.46%
Total Waivers of Fund
Expenses................................................ 0.70%7
.............N/A9.............................................................0.70%7
Total Annual Fund Operating Expenses (After
Waivers)..........................
0.76%.....................................0.94%...............................0.76%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 To date, the Vision Institutional Limited Duration U.S. Government Fund
has had no operations.
2 The Vision Institutional Limited Duration U.S. Government Fund's Shares
typically have a maximum sales charge of 3.00%. However, shareholders of the
Governor Limited Duration Government Securities Fund's Investor Shares will
not be charged a sales charge when receiving Vision Institutional Limited
Duration U.S. Government Fund shares in connection with the Reorganization
nor will they be charged a sales charge if they decide to exchange their
shares of the Vision Institutional Limited Duration U.S. Government Fund for
another Vision mutual fund.
3 The Vision Institutional Limited Duration U.S. Government Fund's adviser
has contractually agreed to waive a portion of the Management Fee. The
Management Fee paid by the Fund (after the waiver) will not exceed 0.40% for
a one-year period starting from the Closing of the Reorganization, which is
anticipated to occur on or about December 18, 2000.
4 Pursuant to a contractual agreement with the Fund's distributor, The
Vision Institutional Limited Duration U.S. Government Fund will not pay or
accrue the Distribution (12b-1) Fee for a one-year period starting from the
Closing of the Reorganization, which is anticipated to occur on or about
December 18, 2000. If the Fund were to accrue or pay the Distribution Fee,
it would be able to pay up to 0.25% of its average daily net assets as noted
in the table.
5 Pursuant to a contractual agreement with the Fund's administrator, the
Vision Institutional Limited Duration U.S. Government Fund will not pay or
accrue the Shareholder Services Fee for a one-year period starting from the
Closing of the Reorganization, which is anticipated to occur on or about
December 18, 2000. If the Fund were to accrue or pay the Shareholder
Services Fee, it would be able to pay up to 0.25% of its average daily net
assets as noted in the table.
6 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
7 As stated in notes 3, 4 and 5, the Vision Institutional Limited Duration
U.S. Government Fund's adviser has contractually agreed to waive a portion of
the Fund's Management Fee and the Fund will not accrue or pay the
Distribution (12b-1) Fee or Shareholder Services Fee pursuant to a
contractual agreement for a one-year period starting from the Closing of the
Reorganization, which is anticipated to occur on or about December 18, 2000.
8 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Limited Duration Government Securities Fund's distributor) and
other financial institutions ("Service Organizations") under an
Administrative Services Plan up to an annual rate of 0.25% of the daily net
assets of the Fund shares owned by the shareholders with whom the Service
Organization has a servicing relationship. Some of these expenses could be
characterized as Shareholder Services Fees but the current Prospectus of the
Fund includes these expenses under the heading Other Expenses. The Fund's
adviser and administrators were contractually committed to waive a portion of
their fees until October 31, 2000.
9 As stated in note 8, the Governor Limited Duration Government Securities
Fund's adviser and administrators waived certain amounts until October 31,
2000. These waivers are shown below along with the net expenses the Fund
actually paid until October 31, 2000.
Total Waivers of Fund Expenses..........................................
0.33%
Total Actual Annual Fund Operating Expenses (After Waivers).............
0.61%
This table describes the fees and expenses of the Class A Shares of the
VISION PENNSYLVANIA MUNICIPAL INCOME FUND, a new series, as well as pro forma
fees and expenses after giving effect to the Reorganization, and describes
the fees and expenses of the Investor Shares of the GOVERNOR PENNSYLVANIA
MUNICIPAL BOND FUND for its most recent fiscal year end (June 30, 2000).
<TABLE>
<CAPTION>
VISION GOVERNOR VISION
PENNSYLVANIA PENNSYLVANIA PRO FORMA
MUNICIPAL MUNICIPAL ESTIMATED
INCOME FUND BOND FUND COMBINED
(CLASS A (INVESTOR
SHARES) 1 SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
4.50%2
4.50%
4.50%2
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
0.70%3..0.60%.................................................................0.70%3
Distribution (12b-1)
Fee......................................................
0.25%4.............None.......................................................0.25%4
Shareholder Services
Fee......................................................
0.25%5.............None8......................................................0.25%5
Other
Expenses................................................................
0.32%6........................................................................0.33%8
0.32%6
Total Annual Fund Operating
Expenses..........................................
1.52%.....................0.93%9..............................................1.52%7
Total Waivers of Fund
Expenses................................................
0.56%7..............N/A9......................................................0.56%7
Total Annual Fund Operating Expenses (After
Waivers)..........................
0.96%.....................................0.93%...............................0.96%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 To date, the Vision Pennsylvania Municipal Income Fund has had no
operations.
2 The Vision Pennsylvania Municipal Income Fund's Class A Shares typically
have a maximum sales charge of 4.50%. However, holders of the Governor
Pennsylvania Municipal Bond Fund Fund's Investor Shares will not be charged a
sales charge when receiving Vision Pennsylvania Municipal Income Fund Class A
Shares in connection with the Reorganization nor will they be charged a sales
charge if they decide to exchange their Class A Shares of the Vision
Pennsylvania Municipal Income Fund for another Vision mutual fund.
3 The Vision Pennsylvania Municipal Income Fund's adviser has contractually
agreed to waive a portion of the Management Fee. Pursuant to a contractual
agreement with the Fund's adviser, the Management Fee paid by the Fund (after
the waiver) will not exceed 0.64% for a one-year period starting from the
Closing of the Reorganization, which is anticipated to occur on or about
December 18, 2000.
4 Pursuant to a contractual agreement with the Fund's distributor, the
Vision Pennsylvania Municipal Income Fund will not pay or accrue the
Distribution (12b-1) Fee for Class A Shares for a one-year period starting
from the Closing of the Reorganization, which is anticipated to occur on or
about December 18, 2000. If the Fund were to accrue or pay the Distribution
Fee, it would be able to pay up to 0.25% of its average daily net assets as
noted in the fee table.
5 Pursuant to a contractual agreement with the Fund's administrator, the
Vision Pennsylvania Municipal Income Fund will not pay or accrue the
Shareholder Services Fee for Class A Shares for a one-year period starting
from the Closing of the Reorganization, which is anticipated to occur on or
about December 18, 2000. If the Fund were to accrue or pay the Shareholder
Services Fee, it would be able to pay up to 0.25% of its average daily net
assets as noted in the table.
6 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
7 As stated in notes 3, 4 and 5, the Vision Pennsylvania Municipal Income
Fund's adviser has agreed to contractually waive a portion of its Management
Fee and the Fund will not accrue or pay Distribution (12b-1) Fees or
Shareholder Services Fees pursuant to contractual agreements for a one-year
period starting from the Closing of the Reorganization, which is anticipated
to occur on or about December 18, 2000.
8 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Pennsylvania Municipal Bond Fund's distributor) and other
financial institutions ("Service Organizations") under an Administrative
Services Plan up to an annual rate of 0.25% of the daily net assets of the
Fund shares owned by the shareholders with whom the Service Organization has
a servicing relationship. Some of these expenses could be characterized as
Shareholder Services Fees but the current Prospectus of the Fund includes
these expenses under the heading Other Expenses. The Fund's adviser and
administrators were contractually committed to waive a portion of their fees
until October 31, 2000.
9 As stated in note 8, the Governor Pennsylvania Municipal Bond Fund's
adviser and administrators waived certain amounts until October 31, 2000.
These waivers are shown below along with the net expenses the Fund actually
paid until October 31, 2000.
Total Waivers of Fund Expenses..........................................
0.34%
Total Actual Annual Fund Operating Expenses (After Waivers).............
0.59%
This table describes the fees and expenses of VISION INSTITUTIONAL PRIME
MONEY MARKET FUND, a new series, as well as pro forma fees and expenses after
giving effect to the Reorganization, and describes the fees and expenses of
the Investor Shares of the GOVERNOR PRIME MONEY MARKET FUND for its most
recent fiscal year end (June 30, 2000).
<TABLE>
<CAPTION>
VISION GOVERNOR VISION
INSTITUTIONAL PRIME PRO FORMA
PRIME MONEY MONEY ESTIMATED
MARKET FUND1 MARKET COMBINED
FUND
(INVESTOR
SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
None
None
None
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
0.50%2..0.40%.................................................................0.50%2
Distribution (12b-1)
Fee......................................................
0.25%3.............None.......................................................0.25%3
Shareholder Services Fee
.....................................................
0.25%4.................None7..................................................0.25%4
Other
Expenses................................................................
0.23%5........................................................................0.30%7
0.23%5
Total Annual Fund Operating
Expenses..........................................
1.23%.....................0.70%8..............................................1.23%
Total Waivers of Fund
Expenses................................................ 0.80%6
.............N/A8.............................................................0.80%6
Total Annual Fund Operating Expenses (After
Waivers)..........................
0.43%.....................................0.70%...............................0.43%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 To date, the Vision Institutional Prime Money Market Fund has had no
operations.
2 The Vision Institutional Prime Money Market Fund's adviser has
contractually agreed to waive a portion of the Management Fee. The
Management Fee paid by the Fund (after the waiver) will not exceed 0.20% for
a one-year period starting from the Closing of the Reorganization, which is
anticipated to occur on or about December 18, 2000.
3 Pursuant to a contractual agreement with the Fund's distributor, the
Vision Institutional Prime Money Market Fund will not pay or accrue the
Distribution (12b-1) Fee for a one-year period starting from the Closing of
the Reorganization, which is anticipated to occur on or about December 18,
2000. If the Fund were to accrue or pay the Distribution (12b-1) Fee, it
would be able to pay up to 0.25% of the Fund's average daily net assets as
noted in the table.
4 Pursuant to a contractual agreement with the Fund's administrator, the
Vision Institutional Prime Money Market Fund will not pay or accrue the
Shareholder Services Fee for a one-year period starting from the Closing of
the Reorganization, which is anticipated to occur on or about December 18,
2000. If the Fund were to accrue or pay the Shareholder Services Fee, it
would be able to pay up to 0.25% of the Fund's average daily net assets as
noted in the table.
5 Other Expenses are based on an estimated amount for the fiscal year ending
April 30, 2001.
6 As stated in notes 2, 3 and 4, the Vision Institutional Prime Money Market
Fund's adviser has contractually agreed to waive a portion of its Management
Fee and the Fund will not accrue or pay the Distribution (12b-1) Fee or
Shareholder Services Fee pursuant to contractual agreement for a one-year
period starting from the Closing of the Reorganization, which is anticipated
to occur on or about December 18, 2000.
7 Other Expenses include administration fees, transfer agency fees, and all
other ordinary operating expenses not listed above, and the payment of a
servicing fee to various banks, trust companies, broker-dealers (other than
the Governor Prime Money Market Fund's distributor) and other financial
organizations ("Service Organizations") under an Administrative Services Plan
up to an annual rate of 0.25% of the daily net assets of the Fund shares
owned by the shareholders with whom the Service Organization has a servicing
relationship. Some of these expenses could be characterized as Shareholder
Services Fees but the current Prospectus of the Fund includes these expenses
under the heading Other Expenses. The Fund's adviser and administrators were
contractually committed to waive a portion of their fees until October 31,
2000.
8 As stated in note 7, the Governor Prime Money Market Funds' adviser and
administrators waived certain amounts until October 31, 2000. These waivers
are shown below along with the net expenses the Fund actually paid until
October 31, 2000.
Total Waivers of Fund Expenses..........................................
0.23%
Total Actual Annual Fund Operating Expenses (After Waivers).............
0.47%
This table describes the fees and expenses of the Class A Shares of the
VISION TREASURY MONEY MARKET FUND for its most recent fiscal year end (April
30, 2000). It also reflects the expected fee structure on a pro forma basis
after giving effect to the Reorganization for the current fiscal year ending
April 30, 2001, as well as the fees and expenses of the Investor Shares of
the GOVERNOR U.S. TREASURY OBLIGATIONS MONEY MARKET FUND for its most recent
fiscal year end (June 30, 2000).
<TABLE>
<CAPTION>
VISION GOVERNOR VISION
TREASURY MONEY U.S. PRO FORMA
MARKET FUND TREASURY ESTIMATED
(CLASS A OBLIGATIONSCOMBINED
SHARES) MONEY
MARKET
FUND
(INVESTOR
SHARES)
<S> <C> <C> <C>
SHAREHOLDER FEES
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
None
None
None
ANNUAL FUND OPERATING EXPENSES
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management
Fee................................................................
0.50%1...0.40%................................................................0.50%6
Distribution (12b-1)
Fee......................................................
None...............None.......................................................None
Shareholder Services
Fee......................................................
0.25%2.............None4......................................................0.25%7
Other
Expenses................................................................ %
0.160.55%4....................................................................0.16%
Total Annual Fund Operating
Expenses..........................................
0.91%3....................0.95%5..............................................0.91%
Total Waivers of Fund
Expenses................................................
N/A.................N/A.......................................................0.34%8
Total Annual Fund Operating Expenses (After
Waivers)..........................
N/A.......................................N/A.................................0.57%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
1 The Vision Treasury Money Market Fund's adviser voluntarily waived a
portion of the Management Fee. The Fund's adviser can terminate this
voluntary waiver at any time. The Management Fee paid by the Fund (after
voluntary waiver) was 0.42% for the fiscal year ended April 30, 2000.
2 The Vision Treasury Money Market Fund did not pay or accrue the
Shareholder Services Fee for Class A Shares during the fiscal year ended
April 30, 2000. If the Fund were accruing or paying the Shareholder Services
Fee, it would be able to pay up to 0.25% of its average daily net assets as
noted in the table.
3 As stated in notes 1 and 2, the Vision Treasury Money Market Fund's
adviser voluntarily waived a portion of the Management Fee and the Fund did
not pay or accrue the Shareholder Services Fee for Class A shares during the
Fund's most recently completed fiscal year. These adjustments are shown
below along with the net expenses the Fund actually paid for the fiscal year
ended April 30, 2000.
Total Waivers of Fund Expenses..........................................
0.33%
Total Actual Annual Fund Operating Expenses (After Waivers).............
0.58%
4 Other Expenses include administration fees, transfer agency fees and all
other ordinary operating expenses, including the payment of a servicing fee
to various banks, trust companies, broker-dealers (other than the Governor
U.S. Treasury Obligations Money Market Fund's distributor) and other
financial institutions ("Service Organizations") under an Administrative
Services Plan up to an annual rate of 0.25% of the daily net asset value of
the Fund shares owned by the shareholders with whom the Service Organization
has a servicing relationship. Some of these expenses could be characterized
as Shareholder Services Fees but the current Prospectus of the Fund includes
these expenses under the heading Other Expenses. The Fund's adviser and
administrators were contractually committed to waive a portion of their fees
until October 31, 2000.
5 As stated in note 4, the Governor U.S. Treasury Obligations Money Market
Fund's adviser and administrators waived certain amounts until October 31,
2000. These waivers are shown below along with the net expenses the Fund
actually paid until October 31, 2000.
Total Waivers of Fund Expenses..........................................
0.26%
Total Actual Annual Fund Operating Expenses (After Waivers).............
0.69%
6 As stated in note 1, the Vision Treasury Money Market Fund's adviser for
the Fund's fiscal year ended April 30, 2000, voluntarily waived a portion of
the Management Fee to which it was otherwise entitled. The Fund's adviser
may terminate such waiver at any time. In addition, the Fund's adviser has
contractually agreed to waive a portion of its Management Fee for a one-year
period starting from the Closing of the Reorganization (which is anticipated
to occur on or about December 18, 2000) so that the Management Fee paid will
not exceed 0.41%.
7 As stated in note 2, the Vision Treasury Money Market Fund did not accrue
or pay Shareholder Services Fees during its last fiscal year. The Board of
Trustees has been informed that if the Reorganization is effected no accrual
or payment of these fees will be made for a one-year period starting from the
Closing of the Reorganization, which is anticipated to occur on or about
December 18, 2000.
8 As stated in notes 6 and 7, the Vision Treasury Money Market Fund's
adviser, for the Fund's fiscal year ended April 30, 2000, voluntarily waived
a portion of the Fund's Management Fee. In addition, the Board of Trustees
has been informed that if the Reorganization is effected, the Fund's adviser
has contractually agreed to waive a portion of its Management Fee, and no
accrual or payment of the Shareholder Services Fee will be made for a
one-year period starting from the Closing of the Reorganization, which is
anticipated to occur on or about December 18, 2000.
106
Doc. #346126 v.08
EXAMPLES
The following Examples are intended to help you compare the cost of investing
in the Governor Fund whose shares you currently own with the cost of
investing in the Vision Fund into which your Governor Fund will be
reorganized if the proposed Reorganization is approved. The Example for each
separate Vision and Governor Fund assumes that you invest $10,000 in each
fund for the time periods indicated and then redeem all of your shares at the
end of those periods. Each Pro Forma Combined Example assumes that you
invest $10,000 in the Vision Fund after the Reorganization with the Governor
Fund. Each Example assumes that your investment has a 5% return each year.
The Example for each Vision Fund (except the Vision Treasury Money Market
Fund) and each Pro Forma Combined Example assumes operating expenses to be
AFTER WAIVERS AND REIMBURSEMENTS as presented in the preceding Fee Tables.
As described in the notes to the Fee Tables, pursuant to contractual
commitments, a portion of the operating expenses of each such Vision Fund
will be waived or reimbursed during the one-year period starting from the
Closing of the applicable Reorganization (which is anticipated to occur on or
about December 18, 2000), and such waiver or reimbursement will cease and not
be extended beyond the one-year period. The calculations in the Examples of
the expenses for each of the 1, 3, 5 and 10 year periods shown reflect those
waivers and reimbursements during the one-year period after the Closing of
the Reorganization. For the periods after the first year, in the
calculations for the 3, 5 and 10 year expenses, the calculations assume
operating expenses BEFORE WAIVERS AND REIMBURSEMENTS as reflected in the Fee
Tables. The Example for the Vision Treasury Money Market Fund, which is
subject to voluntary fee waivers, assumes operating expenses BEFORE WAIVERS
AND REIMBURSEMENTS.
The Example for each Governor Fund assumes operating expenses to be BEFORE
WAIVERS AND REIMBURSEMENTS as shown in the preceding Fee Tables. The adviser
and administrators to each Governor Fund were contractually committed to
waive a portion of their fees and reimburse certain expenses only through
October 31, 2000, and not thereafter. The adviser to the Lifestyle
Conservative Growth Fund, Lifestyle Moderate Growth Fund and Lifestyle Growth
Fund has voluntarily (but not contractually) agreed to extend such waivers
and reimbursements after October 31, 2000 and those voluntary waivers and
reimbursements are not reflected in the Examples.
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Small Cap Stock Fund........... $678 $990 $1,343 $2,337
Governor Aggressive Growth Fund....... $674 $958 $1,263 $2,128
Pro Forma Combined.................... $678 $990 $1,343 $2,337
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Large Cap Core Fund............ $653 $941 $1,283 $2,247
Governor Established Growth Fund...... $653 $883 $1,132 $1,844
Pro Forma Combined.................... $653 $941 $1,283 $2,247
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Intermediate Term Bond Fund.... $519 $771 $1,091 $1,996
Governor Intermediate Term Income Fund $526 $710 $910 $1,487
Pro Forma Combined.................... $519 $771 $1,091 $1,996
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision International Equity Fund...... $714 $1,107 $1,547 $2,764
Governor International Equity Fund.... $699 $1,073 $1,470 $2,577
Pro Forma Combined.................... $714 $1,107 $1,547 $2,764
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Managed Allocation Fund -
Conservative Growth................ $597 $4,866 $8,025 $10,174
Governor Lifestyle Conservative Growth
Fund............................... $2,017 $5,456 $7,625 $10,163
Pro Forma Combined.................... $597 $4,866 $8,025 $10,174
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Managed Allocation - Aggressive
Growth............................. $597 $1,826 $3,433 $6,965
Governor Lifestyle Growth Fund........ $1,100 $2,806 $4,361 $7,673
Pro Forma Combined.................... $597 $1,826 $3,433 $6,965
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Managed Allocation Fund-Moderate
Growth............................. $597 $1,887 $3,566 $7,190
Governor Lifestyle Moderate Growth Fund $998 $2,444 $3,808 $6,894
Pro Forma Combined.................... $597 $1,887 $3,566 $7,190
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Institutional Limited Duration
U.S.
Government Fund.................... $375 $637 $966 $1,896
Governor Limited Duration Government
Securities Fund.................... $382 $580 $794 $1,410
Pro Forma Combined.................... $375 $637 $966 $1,896
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Pennsylvania Municipal Income $544 $822 $1,157 $2,105
Fund..................................
Governor Pennsylvania Municipal Bond $530 $722 $931 $1,532
Fund..................................
Pro Forma Combined.................... $544 $822 $1,157 $2,105
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Institutional Prime Money Market
Fund............................... $44 $258 $547 $1,370
Governor Prime Money Market Fund...... $64 $216 $382 $863
Pro Forma Combined.................... $44 $258 $547 $1,370
1 year 3 5 years 10 years
years
-------- ------- -------- ---------
Vision Treasury Money Market Fund..... $93 $290 $504 $1,120
Governor U.S. Treasury Obligations
Money
Market Fund........................ $88 $294 $517 $1,158
Pro Forma Combined.................... $81 $255 $469 $1,087
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES, STRATEGIES AND PRINCIPAL RISKS
OF THE GOVERNOR FUNDS AND VISION FUNDS
This section contains tables comparing the investment objectives,
policies, strategies and the principal risks of investing in each Governor
Fund and each Vision Fund into which each Governor Fund would be
reorganized. The tables are arranged alphabetically according to the name of
the Governor Fund. The differences between the Funds are reflected in
italics. One difference between the funds, which is not noted in the tables,
is that the investment objective for each Governor Fund is non-fundamental
while the investment objective for each Vision Fund is fundamental. This
means that the investment objectives for the Visions Funds, unlike those of
the Governor Funds, may not be changed without shareholder approval.
In addition to the policies and strategies set forth below, each Vision
Fund and each Governor Fund is subject to certain additional investment
policies and limitations, which are described in their respective Statements
of Additional Information. The Prospectus and Statement of Additional
Information of each Vision Fund and the Prospectus and Statement of
Additional Information of each Governor Fund, all of which are incorporated
herein by reference thereto, together set forth in full the investment
objectives, policies, strategies and limitations of each Vision Fund and each
Governor Fund.
-------------------------------------------------------------------------------
GOVERNOR AGGRESSIVE GROWTH FUND VISION SMALL CAP STOCK FUND
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide growth of capital. To provide growth of capital.
The Aggressive Growth Fund's principal PRINCIPAL INVESTMENTS:
investments and investment policies and
strategies are substantially similar to The Vision Small Cap Stock Fund will
those of the Vision Small Cap Stock invest substantially all, but under
Fund. The difference between the Funds normal market conditions no less than
is the size of the companies (at the 65%, of its total assets in common
time of investment ) in which each Fund stocks and securities convertible into
invests. The Aggressive Growth Fund common stocks of companies with market
principally invests in small to mid-cap capitalizations (market price per
companies, those with market share of a company's stock multiplied
capitalizations (market price per share by the total number of outstanding
of a company's stock multiplied by the shares) at the time of purchase under
total number of outstanding shares) $2 billion. The Fund intends to
ranging between $100 million and $5 invest 90% or more of its assets in
billion. The Vision Small Cap Stock common stocks and securities
Fund principally invests in small cap convertible into common stocks under
companies, those with market normal market conditions. The balance
capitalizations under $2 billion. of the portfolio may be invested in
common stocks and securities
convertible into common stocks not
meeting these market capitalization
parameters. Stocks purchased by the
Fund generally will be traded on
established U.S. markets and
exchanges, although the Fund may
invest in restricted or privately
placed securities.
INVESTMENT STYLE AND STRATEGIES:
The Fund attempts to invest primarily
in small-capitalization companies
(although the Fund will invest to a
lesser extent in mid-capitalization
stocks) that its Sub-Adviser believes
have demonstrated one or more of the
following characteristics: strong
growth, solid management, innovative
products, and a steady revenue and
earnings history. In addition, the
Sub-Adviser attempts to invest in
companies that are selling at earnings
multiples that the Sub-Adviser
believes to be less than their
expected long-term growth rate. The
Sub-Adviser emphasizes company
specific factors rather than industry
factors when deciding to buy or sell
securities. The Fund's sector
weightings may be overweighted or
underweighted relative to its peers
and benchmarks.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The Fund is subject to the following
Aggressive Growth Fund are principal risks:
substantially the same as those of the
Vision Small Cap Stock Fund. The |X|...STOCK MARKET RISK. The value of
Vision Small Cap Stock Fund will, equity securities in the Fund's
however, have greater exposure to portfolio will rise and fall,
smaller companies risk because it may sometimes drastically, as a
invest to a greater extent in small result of factors affecting
cap, as opposed to mid-cap, companies. individual companies or
industries, or the securities
market as a whole.
|X| SMALLER COMPANIES RISK.
Generally, the smaller the
market capitalization of a
company, the fewer the number of
shares traded daily, the less
liquid its stock and the more
volatile its price. Companies
with smaller market
capitalizations also tend to
have unproven track records, a
limited product or service base
and limited access to capital.
These factors make these
companies more likely to fail
than companies with larger
market capitalizations.
|X| RISKS RELATED TO INVESTING FOR
GROWTH. Growth stock prices
reflect projections of future
earnings or revenues and can,
therefore, fall dramatically if
the company fails to meet those
projections. Growth stocks also
may be more expensive relative
to their earnings or assets
compared to value or other
stocks.
Due to their relatively high
valuations, growth stocks are
typically more volatile than
value stocks. Further, growth
stocks may not pay dividends or
may pay lower dividends than
value stocks. This means they
depend more on price changes for
returns and may be more
adversely affected in a down
market compared to value stocks
that pay higher dividends.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GOVERNOR ESTABLISHED GROWTH FUND VISION LARGE CAP CORE FUND
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide growth of capital with some To provide long-term capital
current income appreciation. Current income is a
as a secondary objective. secondary, non-fundamental investment
consideration.
This stated secondary objective of some
current income differs from the Vision
Large Cap Core Fund since current
income is a secondary investment
consideration.
PRINCIPAL INVESTMENTS: PRINCIPAL INVESTMENTS:
The Established Growth Fund will invest The Vision Large Cap Core Fund pursues
substantially all, but under normal its investment objective by investing
market conditions no less than 65%, of primarily in a diversified portfolio
its total assets in common stocks and of equity securities that are
securities convertible into common considered "large cap." Large
stocks of companies with market capitalization companies have a market
capitalizations (market price per share capitalization (market price per share
of a company's stock multiplied by the of a company's stock multiplied by the
total number of outstanding shares) at total number of outstanding shares) of
the time of purchase of at least $1 $10 billion or more at the time of
billion. Securities convertible into investing. The Fund may also invest,
common stocks include convertible to a lesser extent, in mid-cap or
bonds, convertible preferred stock, small-cap companies, which are
options and rights. The Established generally companies with market
Growth Fund intends to invest 90% or capitalizations under $10 billion and
more of its assets in common stocks $1 billion, respectively. The Fund
under normal market conditions. Stocks invests primarily in common stocks,
purchased for the Established Growth but may also invest in preferred
Fund generally will be traded on stocks. While the Fund looks for
established U.S. markets and exchanges. large-cap equity securities that are
expected to produce growth or capital
Therefore, there are two differences in appreciation, the Fund will also
the principal investments of the consider to a lesser extent whether
Established Growth Fund and the Vision the securities offer the opportunity
Large Cap Core Fund. First, the for current income.
Established Growth Fund may invest a
greater percentage of its assets than
the Large Cap Core Fund in companies
that, at the time of purchase, have
capitalizations of between $1 billion
and $10 billion. Second, the
Established Growth Fund may invest to a
greater extent in convertible
securities than the Large Cap Core
Fund. While the Large Cap Core Fund is
permitted to invest in such securities,
convertible securities are not one of
that Fund's principal investments.
Instead, the Large Cap Core Fund may
invest in preferred stocks to a greater
extent than the Established Growth
Fund. As a practical matter, the
greatest portion of each Fund's
portfolio is expected to be invested in
common stocks.
INVESTMENT STYLE AND STRATEGIES: INVESTMENT STYLE AND STRATEGIES:
The Established Growth Fund's The Fund, as a whole, has the overall
investment style is substantially portfolio characteristics that define
similar to that of the Vision Large Cap it as "large cap core," which is an
Core Fund, but the Established Growth investment style that has elements of
Fund may not engage in value investing both growth and value investing.
to the same extent as the Vision Large
Cap Core Fund. The Fund's manager uses a strategy of
"Risk Controlled, Thematic, GARP
The Adviser selects investments based (Growth at a Reasonable Price)." This
on a number of factors related to strategy attempts to control portfolio
historical and projected earnings and risk by using investments that are
price/earnings relationships, as well larger components of the Standard &
as company growth and asset value, Poor's 500 Index; identify major macro
consistency of earnings growth and forces (themes and trends) that will
earnings quality. The Established influence the economic environment;
Growth Fund's investments are based and buy stocks that are at attractive
upon the Adviser's assessment of a valuations relative to their peers.
company's expected performance through The Adviser has the option of pursuing
a business and market cycle that a growth-based or a value-based
normally translates into a three- to strategy as market conditions dictate.
five-year investment horizon. In an
effort to reduce market volatility, the Growth stocks, in general, tend to be
Established Growth Fund tries to keep highly valued relative to their
its investments diversified among all current earnings. These companies may
of the major economic sectors. include those that the market is
willing to pay more for because they
are recognized leaders or well-known
household names with the potential for
powerful, consistent earnings growth
and that may be worth more in the
future.
When looking for value stocks, the
Adviser will attempt to identify
investments that, for whatever reason,
are currently out of favor and selling
at a discount to their fair market
value as defined by the Adviser's
disciplines. These value companies'
stock prices do not appear to reflect
their underlying value as measured by
assets, earnings, cash flow, business
franchises, or other quantitative or
qualitative measurements.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The Fund is subject to the following
Established Growth Fund are principal risks:
substantially similar to those of the
Vision Large Cap Core Fund. The |X| STOCK MARKET RISK. The value of
Established Growth Fund may, however, equity securities in the Fund's
be subject to a greater extent to the portfolio will rise and fall,
risks associated with investments in sometimes drastically, as a
smaller companies. Stocks issued by result of factors affecting
companies with smaller market individual companies or
capitalizations tend to carry greater industries or the securities
risk and exhibit greater price market as a whole.
volatility than larger capitalization
stocks because their businesses may not |X| RISKS RELATED TO INVESTING FOR
be well-established. Smaller companies GROWTH. Growth stock prices
generally have limited product lines, reflect projections of future
markets and financial resources and may earnings or revenues and can,
be dependent on one-person management. therefore, fall dramatically if
These securities may also have limited the company fails to meet those
marketability and, as a result, may be projections. Growth stocks also
difficult to sell. In addition, the may be more expensive relative
risks associated with value investing to their earnings or assets
are not likely to be as prominent when compared to value or other
investing in the Established Growth stocks.
Fund as compared to the Vision Large
Cap Core Fund. Due to their relatively high
valuations, growth stocks are
typically more volatile than
value stocks. Further, growth
stocks may not pay dividends or
may pay lower dividends than
value stocks. This means they
depend more on price changes for
returns and may be more
adversely affected in a down
market compared to value stocks
that pay higher dividends.
|X| RISKS RELATED TO INVESTING FOR
VALUE. Value stock prices are
considered "cheap" relative to
the company's perceived value
and are often out of favor with
other investors. However, if
other investors fail to
recognize the company's value
(and do not become buyers, or
become sellers), or favor
investing in faster-growing
companies, value stocks may not
increase in value as anticipated
by the Adviser or may even
decline further.
Due to their relatively low
valuations, value stocks are
typically less volatile than
growth stocks. Further value
stocks tend to have higher
dividends than growth stocks.
This means they depend less on
price changes for returns and
may lag behind growth stocks in
an up market.
INVESTMENT RESTRICTIONS:
The Established Growth Fund and the
Vision Large Cap Core Fund have each
adopted as fundamental policies certain
investment restrictions, which are
substantially similar, except as noted
below. Fundamental investment
restrictions may not be changed without
shareholder vote. (Each Fund also has
certain additional non-fundamental
investment restrictions, which are
described in each Fund's Statement of
Additional Information.)
o The Funds' policies with respect
to lending differ because the Vision
Fund can invest in loans, such as
assignments and participation
interests. However, the Vision Fund is
not likely to invest in loans to any
significant extent given its investment
emphasis on equity securities.
o The Funds' policies with respect
to concentration are substantially
similar except that the Governor Fund
excludes certain investments from the
calculation for purposes of
concentration as a matter of
fundamental policy while the Vision
Fund does so as a matter of
non-fundamental policy.
o The Vision Fund's policy with
respect to purchasing securities on
margin is non-fundamental, which means
it may be changed without shareholder
vote.
o While neither Fund can purchase
or sell real estate, each can invest in
marketable securities of companies
engaged in such activities and
securities secured by real estate
interests thereon. The Vision Fund's
policy expressly permits that Fund to
exercise its rights under agreements
relating to such securities, including
the right to enforce security interest
and to hold real estate acquired by
reason of such enforcement until that
real estate can be liquidated.
o Neither Fund may underwrite
securities issued by other persons,
except that the Governor Fund may do so
to the extent that it may be deemed to
be an underwriter under certain
securities laws in the disposition of
"restricted securities" and the Vision
Fund may engage in transactions that
involve the acquisition, disposition or
resale of its portfolio securities
under circumstances where it may be
considered to be an underwriter under
the Securities Act of 1933.
o While the Vision Fund, like the
Governor Fund, cannot purchase or sell
commodities or commodities contracts,
it can purchase securities of
companies that deal in commodities.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GOVERNOR INTERMEDIATE TERM INCOME FUND VISION INTERMEDIATE TERM BOND FUND
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide current income with To provide current income with
long-term growth of capital as a long-term growth of capital as a
secondary objective. secondary objective.
The Intermediate Term Income Fund's PRINCIPAL INVESTMENTS:
principal investments and investment
policies and strategies are The Vision Intermediate Term Bond Fund
substantially the same as to those of normally invests substantially all,
the Vision Intermediate Term Bond but under normal market conditions no
Fund. The Vision Intermediate Term less than 65%, of its total assets in
Bond Fund, unlike the Intermediate Term investment grade fixed income
Income Fund, also may invest in securities. These include bonds,
non-investment grade fixed income debentures, notes, mortgage-backed and
securities. asset-backed securities, state,
municipal or industrial revenue bonds,
variable and floating rate securities,
variable master demand notes,
obligations issued or supported as to
principal and interest by the U.S.
Government or its agencies or
instrumentalities ("Government
Obligations"), and debt securities
convertible into, or exchangeable for,
common stocks. The balance of the
Fund's portfolio may be invested in
securities of other investment
companies, preferred stocks and, for
cash management purposes, certain
short-term obligations.
The Fund will have a dollar-weighted
average maturity of 3 to 10 years.
Dollar-weighted average maturity gives
you the average time until all debt
securities in a fund come due or
mature. It is calculated by averaging
the time to maturity of all debt
securities held by the Fund with each
maturity "weighted" according to the
percentage of assets it represents.
INVESTMENT STYLE AND STRATEGIES:
The Adviser selects securities based
on current yield, maturity, yield to
maturity, anticipated changes in
interest rates, and the overall credit
quality of the investment.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the
Intermediate Term Income Fund are The Fund is subject to the following
substantially the same as those of the principal risks:
Vision Intermediate Term Bond Fund.
Because the Vision Intermediate Term |X| CREDIT RISK. It is possible
Bond Fund may, unlike the Intermediate that an issuer will default on a
Term Income Fund, invest in security by failing to pay
non-investment grade debt securities, interest or principal when due.
it may be exposed to greater credit If an issuer defaults, the Fund
risk. will lose money. Changes in an
issuer's financial strength or
in a securities credit rating
may affect a security's value
and thus, impact the Fund's
performance.
|X| INTEREST RATE RISK. When
interest rates rise, fixed
income securities tend to
decline in value. The opposite
is also true: when interest
rates fall, fixed income
securities tend to rise in
value. In general, fixed income
securities with longer
maturities are more sensitive to
interest rate changes. Changes
in interest rates also may cause
certain debt securities held by
the Fund to be paid off much
sooner than expected.
|X| CALL RISK. An issuer may redeem
a fixed income security before
maturity at a price below its
current market price. If a
security is called, the Fund may
have to replace it with another
fixed income security with lower
interest rates, higher credit
risks, or other less favorable
characteristics.
|X| PREPAYMENT RISK.
Mortgage-backed and asset-backed
securities are subject to
prepayment risk. These
securities differ from
conventional debt securities
because principal is paid back
over the life of the security
rather than at maturity. The
Fund may receive unscheduled
prepayments of principal before
the security's maturity date due
to voluntary prepayments,
refinancing or foreclosure on
the underlying mortgage loans.
When securities are prepaid, the
Fund loses anticipated interest
and a portion of its principal
investment represented by any
premium the Fund may have paid.
Due in part to this prepayment
risk, mortgage-backed securities
are relatively volatile.
|X| PORTFOLIO TURNOVER. The Fund is
actively managed and, in some
cases, in response to market
conditions, the Fund's portfolio
turnover will exceed 100%. A
higher rate of portfolio
turnover increases costs and
expenses, which must be borne by
the Fund and its shareholders.
High portfolio turnover also may
result in the realization of
substantial net short-term
capital gains, which are taxable
when distributed to shareholders.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GOVERNOR INTERNATIONAL EQUITY FUND VISION INTERNATIONAL EQUITY FUND
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide long-term capital To provide long-term capital
appreciation, primarily through a appreciation, primarily through a
diversified portfolio of non-U.S. diversified portfolio of non-U.S.
equity securities. equity securities.
The International Equity Fund's PRINCIPAL INVESTMENTS:
principal investments and investment
policies and strategies are identical The Vision International Equity Fund
to those of the Vision International will invest substantially all, but
Equity Fund. under normal market conditions in no
event less than 65%, of its total
assets in equity or convertible
securities in at least eight countries
other than the United States.
Although it may invest anywhere in the
world, the Fund invests primarily in
the equity markets listed in the
Morgan Stanley Capital International
Europe, Australasia, Far East ("MSCI
EAFE") Index(R), the benchmark against
which the Fund measures its
performance. The Fund may also invest
in forward foreign currency contracts
to achieve allocation strategies.
INVESTMENT STYLE AND STRATEGIES:
The International Equity Fund
Sub-Adviser's investment perspective
for the Fund is to invest in the
equity securities of non-U.S. markets
and companies that are believed to be
undervalued, in relation to the
issuer's assets, cash flow, earnings
and revenues, based upon internal
research and proprietary valuation
systems. These processes utilized by
the Fund's Sub-Adviser incorporate
internal analysts' considerations of
company management, competitive
advantage, and each company's core
competencies, to determine a stock's
fundamental value, which is then
compared to the stock's current market
price. In allocating assets within
the portfolio, the Sub-Adviser
considers the relative attractiveness
of asset classes, the individual
international equity markets,
industries across and within those
markets, other common risk factors
within those markets and individual
international companies. Because the
relative performance of foreign
currencies is an important factor in
the Fund's performance, the
Sub-Adviser may attempt to manage the
Fund's exposure to various currencies
to take advantage of different yield,
risk and return characteristics.
As a general matter, the Fund will
invest in securities contained in the
EAFE Index, although the Fund may
substitute securities in an equivalent
index when it believes that such
securities more accurately reflect the
relevant international market. The
Sub-Adviser also may attempt to
enhance long-term risk and return
performance of the Fund relative to
its benchmark by deviating from the
normal benchmark mix of country
allocation and currencies in reaction
to discrepancies between current
market prices and fundamental values.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The Fund is subject to the following
International Equity Fund are the same principal risks:
as those of the Vision International
Equity Fund. |X| STOCK MARKET RISK. The value of
equity securities in the Fund's
portfolio will rise and fall,
sometimes drastically, as a
result of factors affecting
individual companies or
industries, or the securities
market as a whole.
|X| FOREIGN SECURITIES RISK.
Foreign securities pose
additional risks because foreign
economic or political conditions
may be less favorable than those
of the United States.
Securities in foreign markets
may also be subject to taxation
policies that reduce returns for
U.S. investors.
Foreign companies may not
provide information (including
financial statements) as
frequently or to as great an
extent as companies in the
United States. Foreign
companies may also receive less
coverage than United States
companies by market analysts and
the financial press. In
addition, foreign countries may
lack uniform accounting,
auditing and financial reporting
standards or regulatory
requirements comparable to
those applicable to U.S.
companies. These factors may
prevent the Fund and its
Sub-Adviser from obtaining
information concerning foreign
companies that is as frequent,
extensive and reliable as the
information available concerning
companies in the United States.
Foreign countries may have
restrictions on foreign
ownership of securities or may
impose exchange controls,
capital flow restrictions or
repatriation restrictions, which
could adversely affect the
liquidity of the Fund's
investments.
The risks associated with
forward foreign currency
contracts include movement in
the value of the foreign
currency relative to the U.S.
dollar and the ability of the
counterparty to perform.
|X| RISKS RELATED TO INVESTING FOR
VALUE. Value stock prices are
considered "cheap" relative to
the company's perceived value
and are often out of favor with
other investors. However, if
other investors fail to
recognize the company's value
(and do not become buyers, or
become sellers), or favor
investing in faster-growing
companies, value stocks may not
increase in value as anticipated
by the Sub-Adviser or may even
decline further.
Due to their relatively low
valuations, value stocks are
typically less volatile than
growth stocks. Further, value
stocks tend to have higher
dividends than growth stocks.
This means they depend less on
price changes for returns and
may lag behind growth stocks in
an up market.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GOVERNOR LIFESTYLE CONSERVATIVE GROWTH VISION MANAGED ALLOCATION FUND -
FUND CONSERVATIVE GROWTH
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide capital appreciation and To provide capital appreciation and
income. income.
PRINCIPAL INVESTMENTS: PRINCIPAL INVESTMENTS:
The Lifestyle Conservative Growth The Vision Managed Allocation Fund -
Fund's principal investments are Conservative Growth seeks to achieve
substantially similar to those of the its objective by investing in a
Vision Managed Allocation Fund - combination of Vision Funds managed by
Conservative Growth. the Adviser (the "Underlying Funds").
The Fund currently plans to generally
invest the largest proportion of its
assets in Underlying Funds that invest
primarily in investment grade fixed
income securities of various
maturities. The Fund's remaining
assets may be invested in shares of
Underlying Funds that invest primarily
in equity securities and in money
market instruments.
INVESTMENT STYLE AND STRATEGIES: INVESTMENT STYLE AND STRATEGIES:
The Lifestyle Conservative Growth Fund The Fund currently plans to invest in
's investment policies and strategies shares of the following Underlying
are similar to those of the Vision Funds within the percentage ranges
Managed Allocation Fund - Conservative indicated:
Growth Fund except that the Lifestyle
Conservative Growth Fund generally Investment
invests in shares of the following Range (Percentage of
Governor Funds within the percentage the
ranges indicated: Asset Class Fund's Stock)
----------- -------------
MONEY MARKET FUNDS 5-50%
Investment Range Institutional Prime
(Percentage of Money Market Fund
the Treasury Money Market
Asset Class Fund's Fund
----------- -------
STOCK) FIXED INCOME FUNDS 35-70%
--------------
MONEY MARKET FUNDS 0-30% Institutional Limited Duration
Prime Money Market Fund U.S. Government Fund
U.S. Treasury Obligations Intermediate Term Bond Fund
Money Market Fund U.S. Government Securities Fund
FIXED INCOME FUNDS 30-60%
Limited Duration Government EQUITY FUNDS
Securities Fund Large Cap Growth Fund
Intermediate Term Income Fund Small Cap Stock Fund 5-35%
EQUITY FUNDS 10-40% International Equity Fund
Established Growth Fund Mid Cap Stock Fund
Aggressive Growth Fund Large Cap Core Fund
International Equity Fund Large Cap Value Fund
The Adviser makes allocation decisions
according to its outlook for the
economy, financial markets, and
relative market valuation for the
Underlying Funds. Moreover, the
Underlying Funds in which the Fund may
invest, the allocation ranges, and the
investments in each Underlying Fund
may all be changed from time to time
without shareholder approval.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The Vision Managed Allocation Fund -
Lifestyle Conservative Growth are Conservative Growth is subject to
substantially similar to those of the those risks associated with
Vision Managed Allocation Fund - investments in the Underlying Funds in
Conservative Growth. To the extent which the Fund actually invests. The
there are differences in the actual Fund is subject to the following
risks of investments in these Funds, it principal risks:
is primarily a result of the different
allocations each Fund makes in the |X| CREDIT RISK. It is possible that
underlying funds. an issuer will default on a
security by failing to pay
interest or principal when due.
If an issuer defaults, the Fund
will lose money. Changes in an
issuer's financial strength or
in a securities credit rating
may affect a security's value
and thus, impact the Fund's
performance.
|X| INTEREST RATE RISK. When
interest rates rise, fixed
income securities tend to
decline in value. The opposite
is also true: when interest
rates fall, fixed income
securities tend to rise in
value. In general, fixed income
securities with longer
maturities are more sensitive to
interest rate changes. Changes
in interest rates also may cause
certain debt securities held by
the Fund to be paid off much
sooner than expected.
|X| CALL RISK. An issuer may redeem
a fixed income security before
maturity at a price below its
current market price. If a
security is called, the Fund may
have to replace it with another
fixed income security with lower
interest rates, higher credit
risks, or other less favorable
characteristics.
|X| PREPAYMENT RISK. Mortgage-backed
and asset-backed securities are
subject to prepayment risk.
These securities differ from
conventional debt securities
because principal is paid back
over the life of the security
rather than at maturity. The
Fund may receive unscheduled
prepayments of principal before
the security's maturity date due
to voluntary prepayments,
refinancing or foreclosure on
the underlying mortgage loans.
When securities are prepaid, the
Fund loses anticipated interest
and a portion of its principal
investment represented by any
premium the Fund may have paid.
Due in part to this prepayment
risk, mortgage-backed securities
are relatively volatile.
|X| STOCK MARKET RISK. The value of
equity securities in the Fund's
portfolio will rise and fall,
sometimes drastically, as a
result of factors affecting
individual companies or
industries, or the securities
market as a whole.
|X| FOREIGN SECURITIES RISK.
Investments in issuers located
in foreign countries may have
greater price volatility and
less liquidity. Investments in
foreign securities also are
subject to political,
regulatory, and diplomatic
risks. Changes in currency
rates are an additional risk of
investments in foreign
securities.
|X| SMALLER COMPANIES RISK.
Generally, the smaller the
market capitalization of a
company, the fewer the number of
shares traded daily, the less
liquid its stock and the more
volatile its price. Companies
with smaller market
capitalizations also tend to
have unproven track records, a
limited product or service base
and limited access to capital.
These factors make these
companies more likely to fail
than companies with larger
market capitalizations.
|X| RISKS RELATED TO INVESTING FOR
VALUE. Value stock prices are
considered "cheap" relative to
the company's perceived value
and are often out of favor with
other investors. However, if
other investors fail to
recognize the company's value
(and do not become buyers, or
become sellers), or favor
investing in faster-growing
companies, value stocks may not
increase in value as anticipated
by the Adviser or may even
decline further.
Due to their relatively low
valuations, value stocks are
typically less volatile than
growth stocks. Further, value
stocks tend to have higher
dividends than growth stocks.
This means they depend less on
price changes for returns and
may lag behind growth stocks in
an up market.
|X| RISKS RELATED TO INVESTING FOR
GROWTH. Growth stock prices
reflect projections of future
earnings or revenues and can,
therefore, fall dramatically if
the company fails to meet those
projections. Growth stocks also
may be more expensive relative
to their earnings or assets
compared to value or other
stocks.
Due to their relatively high
valuations, growth stocks are
typically more volatile than
value stocks. Further, growth
stocks may not pay dividends or
may pay lower dividends than
value stocks. This means they
depend more on price changes for
returns and may be more
adversely affected in a down
market compared to value stocks
that pay higher dividends.
|X| AFFILIATED PERSONS RISK. In
managing the Fund, the Adviser
will have the authority to
select and substitute the
Underlying Funds in which the
Fund will invest. The Adviser
is subject to conflicts of
interest in allocating Fund
assets among the various
Underlying Funds both because
the fees payable to it and/or
its affiliates by some
Underlying Funds are higher than
the fees payable by other
Underlying Funds and because the
Adviser and its affiliates are
also responsible for managing
the Underlying Funds. The
Trustees and officers of the
Funds may also have conflicting
interests in fulfilling their
fiduciary duties to both the
Fund and the Underlying Funds.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GOVERNOR LIFESTYLE GROWTH FUND VISION MANAGED ALLOCATION FUND -
AGGRESSIVE GROWTH
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide capital appreciation. To provide capital appreciation.
PRINCIPAL INVESTMENTS: PRINCIPAL INVESTMENTS:
The Lifestyle Growth Fund's principal Like the other Managed Allocation
investments are substantially similar Funds, the Vision Managed Allocation
to those of the Vision Managed Fund - Aggressive Growth seeks to
Allocation Fund - Aggressive Growth. achieve its objective by investing in
a combination of Vision Funds managed
by the Adviser (the "Underlying
Funds"). The Fund currently plans
generally to invest 70% to 100% of its
assets in Underlying Funds that invest
primarily in equity securities. The
Fund's remaining assets may be
invested in shares of Underlying Funds
that invest primarily in fixed income
securities and money market
instruments.
INVESTMENT STYLE AND STRATEGIES: INVESTMENT STYLE AND STRATEGIES:
The Lifestyle Growth Fund's investment The Fund currently plans to invest in
policies and strategies are shares of the following Underlying
substantially similar to those of the Funds within the percentage ranges
Vision Managed Allocation Fund - indicated:
Aggressive Growth except that the
Lifestyle Growth Fund generally Investment
invests in shares of the following Range (Percentage of
Governor Funds within the percentage the
ranges indicated: Asset Class Fund's Stock)
----------- -------------
MONEY MARKET FUNDS 0-20%
Investment Range Institutional Prime
(Percentage of Money Market Fund
the Treasury Money Market
Asset Class Fund's Fund
----------- -------
Stock) FIXED INCOME FUNDS 0-30%
--------------
MONEY MARKET FUNDS 0-10% Institutional Limited Duration
Prime Money Market Fund U.S. Government Fund
U.S. Treasury Obligations Intermediate Term Bond Fund
Money Market Fund U.S. Government Securities Fund
FIXED INCOME FUNDS 10-40% EQUITY FUNDS 70-100%
Limited Duration Government Large Cap Growth Fund
Securities Fund Small Cap Stock Fund
Intermediate Term Income Fund International Equity Fund
EQUITY FUNDS 50-80% Mid Cap Stock Fund
Established Growth Fund Large Cap Core Fund
Aggressive Growth Fund Large Cap Value Fund
International Equity Fund
The Adviser makes allocation decisions
according to its outlook for the
economy, financial markets, and
relative market valuation for the
Underlying Funds. Moreover, the
underlying funds in which the Fund may
invest, the allocation ranges, and the
investments in each Underlying Fund
may all be changed from time to time
without shareholder approval.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The Fund is subject to those risks
Lifestyle Growth Fund are substantially associated with investments in the
similar to those of the Vision Managed Underlying Funds in which the Fund
Allocation Fund - Aggressive Growth. actually invests. The Fund is subject
To the extent there are differences in to the following principal risks:
the actual risks of investments in
these Funds, it is primarily a result |X| STOCK MARKET RISK. The value of
of the different allocations each Fund equity securities in the Fund's
makes in the underlying funds. portfolio will rise and fall,
sometimes drastically, as a
result of factors affecting
individual companies or
industries, or the securities
market as a whole.
|X| FOREIGN SECURITIES RISK.
Investments in issuers located
in foreign countries may have
greater price volatility and
less liquidity. Investments in
foreign securities also are
subject to political,
regulatory, and diplomatic
risks. Changes in currency
rates are an additional risk of
investments in foreign
securities.
|X| SMALLER COMPANIES RISK.
Generally, the smaller the
market capitalization of a
company, the fewer the number of
shares traded daily, the less
liquid its stock and the more
volatile its price. Companies
with smaller market
capitalizations also tend to
have unproven track records, a
limited product or service base
and limited access to capital.
These factors make these
companies more likely to fail
than companies with larger
market capitalizations.
|X| RISKS RELATED TO INVESTING FOR
VALUE. Value stock prices are
considered "cheap" relative to
the company's perceived value
and are often out of favor with
other investors. However, if
other investors fail to
recognize the company's value
(and do not become buyers, or
become sellers), or favor
investing in faster-growing
companies, value stocks may not
increase in value as anticipated
by the Adviser or may even
decline further.
Due to their relatively low
valuations, value stocks are
typically less volatile than
growth stocks. Further, value
stocks tend to have higher
dividends than growth stocks.
This means they depend less on
price changes for returns and
may lag behind growth stocks in
an up market.
|X| RISKS RELATED TO INVESTING FOR
GROWTH. Growth stock prices
reflect projections of future
earnings or revenues and can,
therefore, fall dramatically if
the company fails to meet those
projections. Growth stocks also
may be more expensive relative
to their earnings or assets
compared to value or other
stocks.
Due to their relatively high
valuations, growth stocks are
typically more volatile than
value stocks. Further, growth
stocks may not pay dividends or
may pay lower dividends than
value stocks. This means they
depend more on price changes for
returns and may be more
adversely affected in a down
market compared to value stocks
that pay higher dividends.
|X| AFFILIATED PERSONS RISK. In
managing the Fund, the Adviser
will have the authority to
select and substitute the
Underlying Funds in which the
Fund will invest. The Adviser
is subject to conflicts of
interest in allocating Fund
assets among the various
Underlying Funds both because
the fees payable to it and/or
its affiliates by some
Underlying Funds are higher than
the fees payable by other
Underlying Funds and because the
Adviser and its affiliates are
also responsible for managing
the Underlying Funds. The
Trustees and officers of the
Funds may also have conflicting
interests in fulfilling their
fiduciary duties to both the
Fund and the Underlying Funds.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GOVERNOR LIFESTYLE MODERATE GROWTH FUND VISION MANAGED ALLOCATION FUND -
MODERATE GROWTH
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide capital appreciation and, To provide capital appreciation and,
secondarily, income. secondarily, income.
PRINCIPAL INVESTMENTS: PRINCIPAL INVESTMENTS:
The Lifestyle Moderate Growth Fund's The Vision Managed Allocation Fund --
principal investments are substantially Moderate Growth seeks to achieve its
similar to the Vision Managed objective by investing in a
Allocation Fund - Moderate Growth. combination of Vision Funds managed by
the Adviser (the "Underlying Funds").
The Fund generally invests at least
55% of its assets in Underlying Funds
that invest primarily in either equity
securities or fixed income
securities. The Fund's remaining
assets may be invested in shares of
Underlying Funds that invest primarily
in money market instruments.
INVESTMENT STYLE AND STRATEGIES: INVESTMENT STYLE AND STRATEGIES:
The Lifestyle Moderate Growth Fund's The Fund currently plans to invest in
investment policies and strategies are shares of the following Underlying
substantially similar to those of the Funds within the percentage ranges
Vision Managed Allocation Fund - indicated:
Moderate Growth except that the
Lifestyle Moderate Growth Fund Investment
generally invests in shares of the Range (Percentage of
following Governor Funds within the the
percentage ranges indicated: Asset Class Fund's Stock)
----------- -------------
MONEY MARKET FUNDS 5-45%
Investment Range Institutional Prime Money
(Percentage of Market Fund
the Treasury Money Market Fund
Asset Class Fund's FIXED INCOME FUNDS 15-50%
----------- -------
Stock) Institutional Limited Duration
--------------
MONEY MARKET FUNDS 0-20% U.S. Government Fund
Prime Money Market Fund Intermediate Term Bond Fund
U.S. Treasury Obligations U.S. Government Securities Fund
Money Market Fund EQUITY FUNDS 40-70%
FIXED INCOME FUNDS 20-50% Large Cap Growth Fund
Limited Duration Government Small Cap Stock Fund
Securities Fund International Equity Fund
Intermediate Term Income Fund Mid Cap Stock Fund
EQUITY FUNDS 30-60% Large Cap Core Fund
Established Growth Fund Large Cap Value Fund
Aggressive Growth Fund
International Equity Fund The Adviser makes allocation decisions
according to its outlook for the
economy, financial markets, and
relative market valuation for the
Underlying Funds. Moreover, the
Underlying Funds in which the Fund may
invest, the allocation ranges, and the
investments in each Underlying Fund
may all be changed from time to time
without shareholder approval.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The Fund is subject to those risks
Lifestyle Moderate Growth Fund are associated with investments in the
substantially similar to those of the Underlying Funds in which the Fund
Vision Managed Allocation Fund - actually invests. The Fund is subject
Moderate Growth. To the extent there to the following principal risks:
are differences in the actual risks of
investments in these Funds, it is |X| CREDIT RISK. It is possible that
primarily a result of the different an issuer will default on a
allocations each Fund makes in the security by failing to pay
underlying funds. interest and principal when
due. If an issuer defaults, the
Fund will lose money. Changes
in an issuer's financial
strength or in a securities
credit rating may affect a
security's value and thus,
impact the Fund's performance.
|X| INTEREST RATE RISK. When
interest rates rise, fixed
income securities tend to
decline in value. The opposite
is also true: when interest
rates fall, fixed income
securities tend to rise in
value. In general, fixed income
securities with longer
maturities are more sensitive to
interest rate changes. Changes
in interest rates also may cause
certain debt securities held by
the Fund to be paid off much
sooner than expected.
|X| CALL RISK. An issuer may redeem
a fixed income security before
maturity at a price below its
current market price. If a
security is called, the Fund may
have to replace it with another
fixed income security with lower
interest rates, higher credit
risks, or other less favorable
characteristics.
|X| PREPAYMENT RISK. Mortgage-backed
and asset-backed securities are
subject to prepayment risk.
These securities differ from
conventional debt securities
because principal is paid back
over the life of the security
rather than at maturity. The
Fund may receive unscheduled
prepayments of principal before
the security's maturity date due
to voluntary prepayments,
refinancing or foreclosure on
the underlying mortgage loans.
When securities are prepaid, the
Fund loses anticipated interest
and a portion of its principal
investment represented by any
premium the Fund may have paid.
Due in part to this prepayment
risk, mortgage-backed securities
are relatively volatile.
|X| STOCK MARKET RISK. The value of
equity securities in the Fund's
portfolio will rise and fall,
sometimes drastically, as a
result of factors affecting
individual companies or
industries, or the securities
market as a whole.
|X| FOREIGN SECURITIES RISK.
Investments in issuers located
in foreign countries may have
greater price volatility and
less liquidity. Investments in
foreign securities also are
subject to political,
regulatory, and diplomatic
risks. Changes in currency
rates are an additional risk of
investments in foreign
securities.
|X| SMALLER COMPANIES RISK.
Generally, the smaller the
market capitalization of a
company, the fewer the number of
shares traded daily, the less
liquid its stock and the more
volatile its price. Companies
with smaller market
capitalizations also tend to
have unproven track records, a
limited product or service base
and limited access to capital.
These factors make these
companies more likely to fail
than companies with larger
market capitalizations.
|X| RISKS RELATED TO INVESTING FOR
VALUE. Value stock prices are
considered "cheap" relative to
the company's perceived value
and are often out of favor with
other investors. However, if
other investors fail to
recognize the company's value
(and do not become buyers, or
become sellers), or favor
investing in faster-growing
companies, value stocks may not
increase in value as anticipated
by the Adviser or may even
decline further.
Due to their relatively low
valuations, value stocks are
typically less volatile than
growth stocks. Further, value
stocks tend to have higher
dividends than growth stocks.
This means they depend less on
price changes for returns and
may lag behind growth stocks in
an up market.
|X| RISKS RELATED TO INVESTING FOR
GROWTH. Growth stock prices
reflect projections of future
earnings or revenues and can,
therefore, fall dramatically if
the company fails to meet those
projections. Growth stocks also
may be more expensive relative
to their earnings or assets
compared to value or other
stocks.
Due to their relatively high
valuations, growth stocks are
typically more volatile than
value stocks. Further, growth
stocks may not pay dividends or
may pay lower dividends than
value stocks. This means they
depend more on price changes for
returns and may be more
adversely affected in a down
market compared to value stocks
that pay higher dividends.
|X| AFFILIATED PERSONS RISK. In
managing the Fund, the Adviser
will have the authority to
select and substitute the
Underlying Funds in which the
Fund will invest. The Adviser
is subject to conflicts of
interest in allocating Fund
assets among the various
Underlying Funds both because
the fees payable to it and/or
its affiliates by some
Underlying Funds are higher than
the fees payable by other
Underlying Funds and because the
Adviser and its affiliates are
also responsible for managing
the Underlying Funds. The
Trustees and officers of the
Funds may also have conflicting
interests in fulfilling their
fiduciary duties to both the
Fund and the Underlying Funds.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GOVERNOR LIMITED DURATION GOVERNMENT VISION INSTITUTIONAL LIMITED DURATION
SECURITIES FUND U.S. GOVERNMENT FUND
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide current income, with To provide current income, with
preservation of capital as a secondary preservation of capital as a secondary
objective. objective.
The Limited Duration Government PRINCIPAL INVESTMENTS:
Securities Fund's principal investments
and investment policies and strategies The Vision Institutional Limited
are substantially similar to those in Duration U.S. Government Fund normally
the Vision Institutional Limited invests substantially all, but under
Duration U.S. Government Fund. normal market conditions no less than
65%, of its total assets in
obligations issued or supported as to
principal and interest by the U.S.
Government or its agencies and
instrumentalities including
mortgage-backed securities,
asset-backed securities, variable and
floating rate securities, and zero
coupon securities, and in repurchase
agreements backed by such securities.
The Fund expects to maintain a
duration of less than three years
under normal market conditions but has
no limit as to the maturity of any one
security that it may purchase.
"Duration" is the average time it
takes to receive expected cash flows
(discounted to their present value) on
a particular fixed-income instrument
or a portfolio of instruments.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The shares of the Fund are not
Limited Duration Government Securities deposits or obligations of the
Fund are the same as those of the Adviser, are not endorsed or
Vision Institutional Limited Duration guaranteed by the Adviser and are not
U.S. Government Fund. insured or guaranteed by the U.S.
government, the Federal Deposit
Insurance Corporation, the Federal
Reserve Board, or any other government
agency.
The Vision Institutional Limited
Duration U.S. Government Fund is
subject to the following principal
risks:
|X| INTEREST RATE RISK. When
interest rates rise, fixed
income securities tend to
decline in value. The opposite
is also true: when interest
rates fall, fixed income
securities tend to rise in
value. In general, fixed income
securities with longer
maturities are more sensitive to
interest rate changes. Changes
in interest rates also may cause
certain debt securities held by
the Fund to be paid off much
sooner than expected.
|X| CREDIT RISK. It is possible
that an issuer will default on a
security by failing to pay
interest or principal when due.
If an issuer defaults, the Fund
will lose money. Changes in an
issuer's financial strength or
in a security's credit rating
may affect a security's value
and, thus, impact Fund
performance.
|X| CALL RISK. An issuer may redeem
a fixed income security before
maturity at a price below its
current market price. If a
security is called, the Fund may
have to replace it with another
fixed income security with lower
interest rates, higher credit
risks, or other less favorable
characteristics.
|X| PREPAYMENT RISK. Mortgage-backed
and asset-backed securities are
subject to prepayment risk.
These securities differ from
conventional debt securities
because principal is paid back
over the life of the security
rather than at maturity. The
Fund may receive unscheduled
prepayments of principal before
the security's maturity date due
to voluntary prepayments,
refinancing or foreclosure on
the underlying mortgage loans.
When securities are prepaid, the
Fund loses anticipated interest
and a portion of its principal
investment represented by any
premium the Fund may have paid.
Due in part to this prepayment
risk, mortgage-backed securities
are relatively volatile.
|X| PORTFOLIO TURNOVER. The Fund is
actively managed and, in some
cases, in response to market
conditions, the Fund's portfolio
turnover will exceed 100%. A
higher rate of portfolio
turnover increases costs and
expenses, which must be borne by
the Fund and its shareholders.
High portfolio turnover also may
result in the realization of
substantial net short-term
capital gains, which are taxable
when distributed to shareholders.
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GOVERNOR PENNSYLVANIA MUNICIPAL BOND VISION PENNSYLVANIA MUNICIPAL INCOME
FUND FUND
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INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide income exempt from both To provide income exempt from both
Federal and Pennsylvania state income federal and Pennsylvania state income
taxes, and preservation of capital. taxes, and preservation of capital.
The Pennsylvania Municipal Bond Fund's PRINCIPAL INVESTMENTS:
principal investments and investment
policies and strategies are identical The Vision Pennsylvania Municipal
to those of the Vision Pennsylvania Income Fund primarily invests in
Municipal Income Fund. municipal securities issued by
Pennsylvania and its local governments
("Pennsylvania Municipal Securities"),
and in debt obligations issued by the
government of Puerto Rico and other
governmental entities whose debt
obligations provide interest income
exempt from Federal and Pennsylvania
state income taxes. Municipal
securities are issued by state and
local governments to raise money to
finance public works, to repay
outstanding obligations, to raise
funds for general operating expenses
and to make loans to other public
institutions.
During normal market conditions, the
Fund normally will invest at least:
o 65% of its total assets in
Pennsylvania Municipal
Securities, and
o as a matter of fundamental
policy, 80% of its net assets in
securities paying interest that
is exempt from federal income
tax but may be subject to the
federal alternative minimum tax
when received by certain
shareholders.
The Fund invests in investment grade
municipal securities. Investment
grade bonds are those of medium credit
quality or better, as determined by a
national rating agency such as
Standard & Poor's Ratings Group (bonds
rated BBB or higher) and Moody's
Investors Service, Inc. (bonds rated
Baa or higher). The higher the credit
rating, the less likely it is that the
bond issuer will default on its
principal and interest payments.
The Fund expects that the
dollar-weighted average maturity of
its investments will be 3 to 10
years. Dollar-weighted average
maturity gives you the average time
until all debt obligations, including
municipal securities, in a fund come
due or mature. It is calculated by
averaging the time to maturity of all
debt obligations held by a fund with
each maturity "weighted" according to
the percentage of assets that it
represents. Within this range, the
Fund's Adviser may vary the average
maturity substantially in anticipation
of a change in the interest rate
environment. There is no limit as to
the maturity of any individual
security.
INVESTMENT STYLE AND STRATEGIES:
The Fund is nondiversified, which
means that it may invest a greater
portion of its assets in the municipal
securities of one issuer than a
diversified fund.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The Fund is subject to the following
Pennsylvania Municipal Bond Fund are principal risks:
the same as those of the Vision
Pennsylvania Municipal Income Fund. |X| CREDIT RISK. It is possible that
an issuer will default on a
security by failing to pay
interest or principal when due.
If an issuer defaults, the Fund
will lose money. Changes in an
issuer's financial strength or
in a security's credit rating
may affect a security's value
and, thus, impact Fund
performance.
|X| INTEREST RATE RISK. When
interest rates rise, fixed
income securities tend to
decline in value. The opposite
is also true: when interest
rates fall, fixed income
securities tend to rise in
value. In general, fixed income
securities with longer
maturities are more sensitive to
interest rate changes. Changes
in interest rates also may cause
certain debt securities held by
the Fund to be paid off much
sooner than expected.
|X| CALL RISK. An issuer may redeem
a fixed income security before
maturity at a price below its
current market price. If a
security is called, the Fund may
have to replace it with another
fixed income security with lower
interest rates, higher credit
risks, or other less favorable
characteristics.
|X| PREPAYMENT RISK.
Mortgage-backed and asset-backed
securities are subject to
prepayment risk. These
securities differ from
conventional debt securities
because principal is paid back
over the life of the security
rather than at maturity. The
Fund may receive unscheduled
prepayments of principal before
the security's maturity date due
to voluntary prepayments,
refinancing or foreclosure on
the underlying mortgage loans.
When securities are prepaid, the
Fund loses anticipated interest
and a portion of its principal
investment represented by any
premium the Fund may have paid.
Due in part to this prepayment
risk, mortgage-backed securities
are relatively volatile.
|X| TAX RISK. The failure of a
municipal security to meet
certain legal requirements may
cause the interest received and
distributed by the Fund to
shareholders to be taxable.
Changes or proposed changes in
federal tax laws may cause the
prices of municipal securities
to fall.
|X| NON-DIVERSIFICATION RISK.
Because the Fund is
non-diversified, a change in
value of any one investment held
by the Fund may affect the
overall value of the Fund more
than it would affect a
diversified fund. Because the
Fund invests in municipal
securities, it has the risk that
special factors may adversely
affect the value of municipal
securities, such as political or
legislative changes or
uncertainties related to the tax
status of municipal securities.
|X| PENNSYLVANIA RISK. Since the
Fund invests primarily in
Pennsylvania municipal
securities, factors adversely
affecting that commonwealth,
such as economic or political
conditions, could have a more
significant effect on the Fund's
net asset value.
Pennsylvania's economy
historically has been dependent
upon heavy industry, but has
diversified recently into
various services, particularly
into medical and health
services, education and
financial services.
Agricultural industries continue
to be an important part of the
economy, including not only the
production of diversified food
and livestock products, but
substantial economic activity in
agribusiness and food-related
industries. Service industries
currently employ the greatest
share of nonagricultural
workers, followed by the
categories of trade and
manufacturing. Future economic
difficulties in any of these
industries could have an adverse
impact on the finances of the
Commonwealth or its
municipalities, and could
adversely affect the market
value of the Pennsylvania Exempt
Securities in the Pennsylvania
Municipal Income Fund or the
ability of the respective
obligors to make payments of
interest and principal due on
such Securities.
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GOVERNOR PRIME MONEY MARKET FUND VISION INSTITUTIONAL PRIME MONEY
MARKET FUND
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INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To provide current income with To provide current income with
liquidity and stability of principal. liquidity and stability of principal.
The Prime Money Market Fund's principal PRINCIPAL INVESTMENTS:
investments and investment policies and
strategies are substantially the same The Vision Institutional Prime Money
as those of the Vision Institutional Market Fund is a "money market fund"
Prime Money Market Fund. that seeks to maintain a stable net
asset value of $1.00 per share. The
Fund pursues its objective by
maintaining a portfolio of
high-quality, U.S. dollar-denominated
money market instruments. The Fund
invests primarily in bank certificates
of deposit, bankers' acceptances,
prime commercial paper, corporate
obligations, municipal obligations,
asset-backed securities, securities
issued or guaranteed by the U.S.
government or its agencies and
repurchase agreements backed by such
obligations. The Fund may also invest
in certain U.S. dollar denominated
foreign securities.
As a money market fund, the Fund must
meet the requirements of the
Securities and Exchange Commission's
Rule 2a-7. This Rule imposes
requirements on the investment
quality, maturity, and diversification
of the Fund's investments. Under Rule
2a-7, the Fund's investments must have
a remaining maturity (as defined under
the Rule) of no more than 397 days and
its investments must maintain a
dollar-weighted average portfolio
maturity that does not exceed 90
days. The Fund will only buy a money
market instrument if it or its issuer
or guarantor has short-term ratings in
the two highest categories from at
least two nationally recognized
statistical rating organizations, such
as Standard & Poor's Ratings Group or
Moody's Investors Service, Inc., or
only one such rating if only one
organization has rated the
instrument. If the money market
instrument is not rated, the Adviser
must determine that it is of
comparable quality to eligible rated
instruments.
INVESTMENT STYLE AND STRATEGIES:
The Fund buys and sells securities
based on its objective of seeking
income with liquidity and stability of
principal. The Fund will attempt to
increase its yield by trading to take
advantage of short-term market
variations. The Fund's Adviser
evaluates investments based on credit
analysis and the Adviser's interest
rate outlook.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The principal risks of investing in the The shares of the Fund are not
Prime Money Market Fund are deposits or obligations of the
substantially the same as those of the Adviser, are not endorsed or
Vision Institutional Prime Money Market guaranteed by it and are not insured
Fund. or guaranteed by the U.S. government,
the Federal Deposit Insurance
Corporation, the Federal Reserve Board
or any other government agency.
The Fund is subject to the following
principal risks:
|X| MARKET RISK. The Fund expects
to maintain a net asset value of
$1.00 per share, but there is no
assurance that the Fund will be
able to do so on a continuous
basis. The Fund's performance
per share will change daily
based on many factors, including
fluctuations in interest rates,
the quality of the instruments
in the Fund's investment
portfolio, national, and
international economic
conditions and general market
conditions.
|X| INTEREST RATE RISK. When
interest rates rise, fixed
income securities tend to
decline in value. The opposite
is also true: when interest
rates fall, fixed income
securities tend to rise in
value. In general, fixed income
securities with longer
maturities are more sensitive to
interest rate changes. Changes
in interest rates also may cause
certain debt securities held by
the Fund to be paid off much
sooner than expected.
|X| CREDIT RISK. Credit risk is the
possibility that an issuer will
default on a security by failing
to pay interest or principal
when due. If an issuer
defaults, the Fund will lose
money. Changes in an issuer's
financial strength or in a
security's credit rating may
affect a security's value and
thus impact the Fund's
performance.
|X| CALL RISK. An issuer may redeem
a fixed income security before
maturity at a price below its
current market price. If the
security is called, the Fund may
have to replace it with another
fixed income security with lower
interest rates, higher credit
risks, or other less favorable
characteristics.
|X| PREPAYMENT RISK.
Mortgage-backed and asset-backed
securities are subject to
prepayment risk. These
securities differ from
conventional debt securities
because principal is paid back
over the life of the security
rather than at maturity. The
Fund may receive unscheduled
prepayments of principal before
the security's maturity date due
to voluntary prepayments,
refinancing or foreclosure on
the underlying mortgage loans.
When securities are prepaid, the
Fund loses anticipated interest
and a portion of its principal
investment represented by any
premium the Fund may have paid.
Due in part to this prepayment
risk, mortgage-backed securities
are relatively volatile.
|X| FOREIGN SECURITIES RISK.
Investments in issuers located
in foreign countries may have
greater price volatility and
less liquidity. Investments in
foreign securities also are
subject to political,
regulatory, and diplomatic
risks. Changes in currency
rates are an additional risk of
investments in foreign
securities.
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GOVERNOR U.S. TREASURY OBLIGATIONS VISION TREASURY MONEY MARKET FUND
MONEY MARKET FUND
-------------------------------------------------------------------------------
INVESTMENT OBJECTIVE: INVESTMENT OBJECTIVE:
To seek current income with liquidity To seek current income with liquidity
and stability of principal. and stability of principal.
PRINCIPAL INVESTMENTS: PRINCIPAL INVESTMENTS:
The U.S. Treasury Obligations Money The Fund pursues its goal by investing
Market Fund is a "money market fund" in a diversified portfolio of direct
that seeks to maintain a stable net obligations of the U.S. Treasury such
asset value of $1.00 per share. The as Treasury bills and notes, and
Fund invests primarily (at least 65% of repurchase agreements secured by these
its total assets) in securities issued obligations. These obligations are
by the U.S. Treasury, such as bills, high-quality, short-term investments
notes and bonds, and repurchase that generally mature and come due for
agreements backed by such securities. repayment by the issuer in 397 days or
In addition, the Fund may invest in less.
securities of money market mutual funds
and when-issued or delayed delivery As a money market fund that seeks to
securities. The Fund also may invest maintain a stable net asset value of
in issues of U.S. Government agencies $1.00 per share, the Fund must meet
and instrumentalities established under the requirements of the Securities and
the authority of an Act of Congress, Exchange Commission's Rule 2a-7. This
including obligations supported by the Rule imposes requirements on the
"full faith and credit" of the United investment quality, maturity, and
States (e.g., obligations guaranteed by diversification of the Fund's
the Export-Import Bank of the United investments. Under Rule 2a-7, the
States, and Private Export Funding Fund's investments must have a
Corporation, among others) and remaining maturity (as defined under
repurchase agreements with respect to the Rule) of no more than 397 days and
these types of obligations. its investments must maintain an
dollar-weighted average portfolio
As a money market fund, the U.S. maturity that does not exceed 90
Treasury Obligations Money Market Fund, days.
like the Vision Treasury Money Market
Fund, must meet the requirements of the
Securities and Exchange Commission's
Rule 2a-7.
INVESTMENT STYLE AND STRATEGIES: INVESTMENT STYLE AND STRATEGIES:
The U.S. Treasury Obligations Money The Fund will only buy a money market
Market Fund buys and sells securities instrument if it or its issuer or
based on its objective of seeking guarantor has short-term ratings in
current income with liquidity and the two highest categories from at
stability of principal. The U.S. least two nationally recognized
Treasury Obligations Money Market Fund statistical rating organizations, such
will attempt to increase its yield by as Standard & Poor's Ratings Group or
trading to take advantage of short-term Moody's Investors Service, Inc., or
market variations. The U.S. Treasury only one such rating if only one
Obligations Money Market Fund's Advisor organization has rated the
evaluates investments based on credit instrument. Or, if the money market
analysis and the Advisor's interest instrument is not rated, the Adviser
rate outlook. must determine that it is of
comparable quality to eligible rated
Although the investment styles and instruments.
strategies are described differently
for these Funds, the Funds invest in
the same types of securities with
regard to quality and maturity and are
managed similarly.
PRINCIPAL RISKS: PRINCIPAL RISKS:
The U.S. Treasury Obligations Money The shares of the Fund are not
Market Fund is subject to substantially deposits or obligations of the
similar principal risks as the Vision Adviser, are not endorsed or
Treasury Money Market Fund. guaranteed by it and are not insured
or guaranteed by the U.S. government,
the Federal Deposit Insurance
Corporation, the Federal Reserve Board
or any other government agency.
The Vision Treasury Money Market Fund
is subject to the following principal
risks:
|X| MARKET RISK. The Fund expects
to maintain a net asset value of
$1.00 per share, but there is no
assurance that the Fund will be
able to do so on a continuous
basis. The Fund's performance
per share will change daily
based on many factors, including
fluctuation in interest rates,
the quality of the instruments
in the Fund's investment
portfolio, national, and
international economic
conditions and general market
conditions.
|X| INTEREST RATE RISK. When
interest rates rise, fixed
income securities tend to
decline in value. The opposite
is also true: when interest
rates fall, fixed income
securities tend to rise in
value. In general, fixed income
securities with longer
maturities are more sensitive to
interest rate changes. Changes
in interest rates also may cause
certain debt securities held by
the Fund to be paid off much
sooner than expected.
|X| CREDIT RISK. It is possible
that an issuer will default on a
security by failing to pay
interest or principal when due.
If an issuer defaults, the Fund
will lose money. Changes in an
issuer's financial strength or
in a security's credit rating
may affect a security's value
and thus impact the Fund's
performance.
|X| CALL RISK. An issuer may redeem
a fixed income security before
maturity at a price below its
current market price. If the
security is called, the Fund may
have to replace it with another
fixed income security with lower
interest rates, higher credit
risks, or other less favorable
characteristics.
INVESTMENT RESTRICTIONS:
The Governor U.S. Treasury Obligations
Money Market Fund and the Vision
Treasury Money Market Fund have each
adopted as fundamental policies certain
investment restrictions, which are
substantially similar, except as noted
below. Fundamental investment
restrictions may not be changed without
shareholder vote. (Each Fund also has
certain additional non-fundamental
investment restrictions, which are
described in each Fund's Statement of
Additional Information.)
o The Funds' policies with respect
to concentration are substantially
similar except that the Governor
Fund excludes certain investments
from the calculation for purposes of
concentration as a matter of
fundamental policy while the Vision
Fund does so as a matter of
non-fundamental policy.
o Both Funds may borrow money to
the extent permitted by the
Investment Company Act of 1940, but
the Governor Fund, unlike the Vision
Fund, may not acquire any portfolio
securities while borrowings exceed
5% of its total assets.
o The Funds' policies with respect
to lending differ because the Vision
Fund can invest in loans, including
assignments and participation
interests.
o Neither Fund may underwrite
securities issued by other persons,
except that the Governor Fund may do
so to the extent that it may be
deemed to be an underwriter under
certain securities laws in the
disposition of "restricted
securities" and the Vision Fund may
engage in transactions that involve
the acquisition, disposition or
resale of its portfolio securities
under circumstances where it may be
considered to be an underwriter
under the Securities Act of 1933.
o Unlike the Governor Fund's
policy, which is fundamental, the
Vision Fund's policy with respect to
purchasing securities on margin is
non-fundamental, which means it may
be changed without shareholder vote.
o While neither Fund can purchase
or sell real estate, each can invest
in marketable securities of
companies engaged in such activities
and securities secured by real
estate interests thereon. The
Vision Fund's policy expressly
permits that Fund to exercise its
rights under agreements relating to
such securities, including the right
to enforce security interest and to
hold real estate acquired by reason
of such enforcement until that real
estate can be liquidated.
o While the Vision Fund, like the
Governor Fund, cannot purchase or
sell commodities or commodities
contracts, it can purchase
securities of companies that deal in
commodities.
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COMPARISON OF OPERATIONS
INVESTMENT ADVISORY AGREEMENTS
The Vision Group of Funds is governed by its Board of Trustees. This
Board selects and oversees the investment activities of the investment
adviser to each Vision Fund. M&T Bank serves as investment adviser to all of
the Vision Funds pursuant to an investment advisory agreement. M&T Bank
manages each Vision Fund's assets, including buying and selling portfolio
securities. The address of M&T Bank and M&T Corp. is One M&T Plaza, Buffalo,
NY 14203.
M&T Bank is the principal banking subsidiary of M&T Corp., a regional
bank holding company in existence since 1969. M&T Bank was founded in 1856
and provides comprehensive banking and financial services to individuals,
governmental entities and businesses throughout New York State. As of June
30, 2000, M&T Bank had $5.5 billion in assets under management. M&T Bank has
served as investment adviser to the Vision Group of Funds and its predecessor
since their inception in 1988. As of June 30, 2000, M&T Bank managed $2.3
billion in net assets of mutual funds. As part of its regular banking
operations, M&T Bank may make loans to public companies. Thus, it may be
possible, from time to time, for the Vision Funds to hold or acquire the
securities of issuers that are also lending clients of M&T Bank. The lending
relationship will not be a factor in the selection of securities. M&T Bank
has entered into sub-advisory agreements with respect to the daily management
of the Vision Small Cap Stock Fund and Vision International Equity Fund.
Those sub-advisory agreements are described below under "Sub-Advisory
Agreements."
The Governor Funds is governed by its Board of Trustees. This Board
selects each Governor Fund's investment adviser and oversees the adviser's
investment activities. Martindale currently serves as investment adviser to
each Governor Fund pursuant to an interim investment advisory agreement, as
further described in Proposal 2. Martindale manages each Governor Fund's
assets (other than those of the International Equity Fund), including buying
and selling portfolio securities, and maintains each Fund's records relating
to such purchases and sales. The address of Martindale is Four Falls
Corporate Center, Suite 200, West Conshohocken, Pennsylvania 19428.
Martindale is a subsidiary of M&T Corp. Prior to the merger between Keystone
and M&T Corp., Martindale was a wholly-owned subsidiary of Keystone.
Martindale was organized in 1989 and was acquired by Keystone in December
1995.
The chart below sets forth the annual rate of investment advisory fees
for both the Governor Funds and the Vision Funds pursuant to their respective
currently effective investment advisory agreements. For the Vision Funds,
the chart below also sets forth the rate of advisory fee after giving effect
to the contractual advisory fee waiver by M&T Bank for certain of the Vision
Funds. Consistent with Rule 15a-4 under the Investment Company Act of 1940,
as amended ("1940 Act"), the actual amount of the investment advisory fee to
be paid to Martindale pursuant to the currently effective interim investment
advisory agreement between the Governor Funds, on behalf of each Governor
Fund, and Martindale, is subject to shareholder approval of a new investment
advisory agreement as further described in Proposal 2.
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GOVERNOR FUND ADVISORY FEE VISION FUND ADVISORY FEE
AS A
PERCENTAGE
AS A OF VISION
PERCENTAGE FUND AVERAGE
OF GOVERNOR DAILY NET
FUND AVERAGE ASSETS
DAILY NET (BEFORE/AFTER
ASSETS ANY WAIVERS)*
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Aggressive Growth Fund 1.00% Vision Small Cap Stock .85%
Fund
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Established Growth Fund .75% Vision Large Cap Core .85%
Fund
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Intermediate Term .60% Vision Intermediate .70%/.47%
Income Fund Term Bond Fund
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International Equity 1.25% Vision International 1.00%/.90%
Fund Equity Fund
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Lifestyle Conservative .25% Vision Managed .25%/.00%
Growth Fund Allocation Fund -
Conservative Growth
-----------------------------------------------------------------------------
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Lifestyle Growth Fund .25% Vision Managed .25%/.00%
Allocation Fund -
Aggressive Growth
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Lifestyle Moderate .25% Vision Managed .25%/.00%
Growth Fund Allocation Fund -
Moderate Growth
-----------------------------------------------------------------------------
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Limited Duration .60% Vision Institutional .60%/.40%
Government Securities Limited Duration U.S.
Fund Government Fund
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Pennsylvania Municipal .60% Vision Pennsylvania .70%/.64%
Bond Fund Municipal Income Fund
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Prime Money Market Fund .40% Vision Institutional .50%/.20%
Prime Money Market Fund
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U.S. Treasury .40% Vision Treasury Money .50%/.41%
Obligations Money Market Fund
Market Fund
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* M&T Bank has agreed contractually to waive some or all of its investment
advisory fees on certain of the Vision Funds for a one-year period
starting from the Closing of the Reorganization, which is expected to
occur on or about December 18, 2000. Prior to November 1, 2000, the
Governor Funds were subject to contractual fee waivers. See "Summary -
Comparative Fee Tables" for information on applicable investment advisory
fee waivers and reimbursements.
SUB-ADVISORY AGREEMENTS
Vision Funds
M&T Bank has delegated daily management of the Vision Small Cap Stock
Fund to Martindale, pursuant to a sub-advisory agreement. For its services
under the sub-advisory agreement, Martindale receives an allocable portion of
the advisory fee M&T Bank receives from the Vision Small Cap Stock Fund. The
allocation is based on the amount of securities which Martindale manages for
the Fund and is paid by M&T Bank out of the fees it receives. The
sub-advisory fee paid to Martindale is not an additional Fund expense.
Martindale is paid by M&T Bank as follows: 0.50% on the first $50 million of
the Fund's average daily net assets; 0.40% on the next $50 million of the
Fund's average daily net assets; 0.30% on the next $100 million of the
Fund's average daily net assets; and 0.20% on the Fund's average daily net
assets over $200 million. Martindale also serves as the investment adviser
to the Aggressive Growth Fund of the Governor Funds as described above.
M&T Bank has delegated daily management of the Vision International
Equity Fund to Brinson, 209 South LaSalle Street, Chicago, Illinois 60604,
pursuant to a sub-advisory agreement. Brinson is a wholly-owned subsidiary
of UBS AG and was organized in 1989. The address of UBS AG is P.O. Box
CH-8098, Zurich, Switzerland.
For its services under the sub-advisory agreement, Brinson receives an
allocable portion of the advisory fee M&T Bank receives from the Vision
International Equity Fund. The allocation is based on the amount of
securities which Brinson manages for the Fund and is paid by M&T Bank out of
the fees it receives. The sub-advisory fee paid to Brinson is not an
additional Fund expense. Brinson is paid by M&T Bank as follows: 0.40% on
the first $50 million of the Fund's average daily net assets; 0.35% on the
next $150 million of the Fund's average daily net assets; and 0.30% on the
Fund's average daily net assets over $200 million.
Brinson also serves as sub-adviser to the International Equity Fund of
the Governor Funds as further described below.
Governor Funds
Brinson serves as sub-adviser to the International Equity Fund pursuant
to an interim sub-advisory agreement as further described in Proposal 3.
Subject to the supervision of the Board of Trustees of the Governor Funds and
Martindale, Brinson manages the International Equity Fund and makes decisions
with respect to and places orders for all purchases and sales of the Fund's
portfolio securities, and maintains records relating to such purchases and
sales. The annual rate of sub-advisory fee payable to Brinson by Martindale
for managing the International Equity Fund pursuant to the interim
sub-advisory agreement is as follows: 0.40% on the first $50 million of the
Fund's average daily net assets; 0.35% on the next $150 million of the
Fund's average daily net assets; and 0.30% on the Fund's average daily net
assets in excess of $200 million. Consistent with Rule 15a-4 under the 1940
Act, the actual amount of the sub-advisory fee to be paid to Brinson pursuant
to the currently effective interim sub-advisory agreement with Martindale is
subject to approval by the shareholders of the International Equity Fund of a
new investment sub-advisory agreement as further described in Proposal 3.
PORTFOLIO MANAGERS
Vision Funds
William C. Martindale, Jr. is responsible for the day-to-day management
of the VISION SMALL CAP STOCK FUND's portfolio and has over 25 years of
equity investment experience. Mr. Martindale managed the predecessor
collective investment fund and common trust fund to the Aggressive Growth
Fund of the Governor Funds since July 1, 1994. Mr. Martindale co-founded
Martindale in 1989 and serves as its Chief Investment Officer. Prior to
1989, Mr. Martindale served in various investment-related capacities with
Dean Witter Reynolds. Mr. Martindale also is responsible for the day-to-day
management of the Aggressive Growth Fund of the Governor Funds.
The VISION INTERMEDIATE TERM BOND FUND's portfolio is co-managed by
Colleen M. Marsh and Robert J. Truesdell. Ms. Marsh joined M&T Bank in
October, 2000 as a Vice President in connection with M&T Corp.'s acquisition
of Keystone. Additionally, Ms. Marsh is a senior portfolio manager in the
fixed income division of Martindale. She has over 12 years of experience
managing fixed income portfolios and funds for clients. She spent the first
10 years of her investment management career with Keystone, and managed the
Intermediate Term Income Fund (a predecessor collective investment fund to
the Intermediate Term Income Fund of the Governor Funds) for Keystone over
this time period. Ms. Marsh is responsible for the day-to-day management of
the Intermediate Term Income Fund and Pennsylvania Municipal Bond Fund of the
Governor Funds.
In addition to co-managing the Vision Intermediate Term Bond Fund's
portfolio, Mr. Truesdell also co-manages the VISION INSTITUTIONAL LIMITED
DURATION U.S. GOVERNMENT FUND's portfolio with Mark Tompkins. In addition to
his responsibilities with respect to these Funds, Mr. Truesdell manages
individual investment accounts and oversees the investment activities of M&T
Bank's money market and fixed income products as well as the money market
funds in the Vision Group of Funds. Mr. Truesdell joined M&T Bank as Vice
President and Fixed Income Manager in 1988. Mr. Truesdell holds an MBA in
Accounting from the State University of New York at Buffalo. Mr. Tompkins is
Senior Portfolio Manager in M&T Capital Advisors Group. He is responsible
for managing fixed income portfolios and the trading of fixed income
secuirties for trust accounts. Prior to joining M&T Bank in August, 1998,
Mr. Tompkins spent over four years as a Portfolio Manager with Karpus
Investment Management in Rochester, New York. At Karpus Investment
Management, he was responsible for managing fixed income investments for
various portfolios, including corporations and high net worth individuals.
Mr. Tompkins holds a B.S. in Mechanical Engineering from Oakland University
and an M.B.A. in Finance and Accounting from Syracuse University. He is a
Chartered Financial Analyst candidate and a member of the Bond Club of
Buffalo. Mr. Tompkins is co-manager of Vision Pennsylvania Municipal Income
Fund's portfolio.
The VISION PENNSYLVANIA MUNICIPAL INCOME FUND's portfolio is co-managed
by Ms. Marsh and Mr. Tompkins. Ms. Marsh is primarily responsible for the
day-to-day management of the Pennsylvania Municipal Bond Fund of the Governor
Funds.
The Vision Managed Allocation Fund - Conservative Growth, Vision
Managed Allocation Fund - Moderate Growth and Vision Managed Allocation Fund
- Aggressive Growth (collectively, the "Vision Managed Allocation Funds")
portfolios are co-managed by Thomas R. Pierce and Mark Stevenson. Mr. Pierce
is a Vice President with M&T Bank. He joined M&T Bank in January 1995 as
Vice President from Merit Investment Advisors where he acted as Director of
Fixed Income Product and Trading beginning in 1993. For the period from 1987
to 1993, Mr. Pierce served as Fixed Income Manager at ANB Investment
Management Company, where he directed the management of $3.5 billion of
active and passive fixed income portfolios. Mr. Pierce is a Chartered
Financial Analyst and has a B.A. in Economics from Washington University, and
an MBA from the University of Chicago. Mr. Stevenson is a Chartered
Financial Analyst. He is a Vice President with M&T Bank. Additionally,
Mr. Stevenson has been with Martindale since 1990, and for the past five
years has managed retirement plan and personal trust assets for Martindale's
clients. Mr. Stevenson is primarily responsible for the day-to-day
management of the Lifestyle Conservative Growth Fund, Lifestyle Moderate
Growth Fund and Lifestyle Growth Fund of the Governor Funds (collectively,
the "Lifestyle Funds").
The Global Equity Committee of Brinson is responsible for the
day-to-day management of the VISION INTERNATIONAL EQUITY FUND's portfolio.
The Global Equity Committee is chaired by Thomas Madsen, CFA, Managing
Director. Mr. Madsen joined Brinson on February 1, 2000. Prior to that, he
was Managing Director with J.P. Morgan Investment Management Inc., and held
several senior management positions there since 1979, including Research
Analyst, Portfolio Manager, and head of Equity, which included research and
equity trading worldwide. He received both his BBA in Finance and Marketing
and MS in Finance from the University of Wisconsin. He has over 20 years
experience in the investment industry. The Global Equity Committee of
Brinson also is responsible for the day-to-day management of the
International Equity Fund of the Governor Funds.
The VISION LARGE CAP CORE FUND is managed by William F. Dwyer. Mr.
Dwyer joined M&T Investment Group in January 2000 as Senior Vice President
and Chief Investment Officer. He has more than 32 years of investment
experience. Most recently, Mr. Dwyer served as Chief Investment Officer of
Citizen's Financial Group in Rhode Island for six years. Mr. Dwyer holds a
Bachelor of Arts Degree from St. Michael's College in Vermont. He earned his
MBA from Western New England College in Springfield, Massachusetts and is a
Certified Financial Analyst.
Kim Rogers is primarily responsible for the day-to-day management of
the VISION TREASURY MONEY MARKET FUND and VISION INSTITUTIONAL PRIME MONEY
MARKET FUND. Ms. Rogers is an Assistant Vice President and a Portfolio
Manager in the M&T Capital Advisors Group. Ms. Rogers is responsible for
credit analysis and the trading of money market instruments for the Vision
Money Market funds, as well as the management of short-term fixed income and
balanced accounts. Ms. Rogers joined M&T Bank in December 1993. Prior to
coming to M&T, she was an analyst with Capital Research and Management Co. in
Los Angeles, California, and was responsible for researching and monitoring
commercial paper credits in compliance with the SEC's Rule 2a-7 Amendments.
Ms. Rogers has a B.A. degree from Smith College, Northhampton,
Massachusetts. She is a member and former director of the Bond Club of
Buffalo.
Governor Funds
Mr. Martindale is responsible for the day-to-day management of the
AGGRESSIVE GROWTH FUND's portfolio and the ESTABLISHED GROWTH FUND's
portfolio. Mr. Martindale's business experience during the past five years
is described above. See "Portfolio Managers - Vision Funds."
Ms. Marsh is primarily responsible for the day-to-day management of the
INTERMEDIATE TERM INCOME FUND's portfolio and Pennsylvania Municipal Bond
Fund's portfolio. Ms. Marsh's business experience during the past five years
is described above. See "Portfolio Managers - Vision Funds."
Mr. Stevenson is primarily responsible for the day-to-day management of
each Lifestyle Funds' portfolio. Mr. Stevenson's business experience during
the past five years is described above. See "Portfolio Managers - Vision
Funds."
James H. Somers is primarily responsible for the day-to-day management
of the Limited Duration Government Securities Fund's portfolio. Mr. Somers
joined Martindale as a portfolio manager in September, 1995. From 1991 to
September, 1995, Mr. Somers was president and owner of his own money
management firm. Prior thereto and for five years, he was a Vice President
at Kidder Peabody & Company in New York.
The Global Equity Committee of Brinson is responsible for the
day-to-day management of the INTERNATIONAL EQUITY FUND's portfolio. The
business experience of the co-chairmen of the Global Equity Committee during
the past five years is described above. See "Portfolio Managers - Vision
Funds."
ADMINISTRATIVE AND SHAREHOLDER SERVICES
M&T Bank and Federated Services Company ("FSC") serve as
co-administrators of the Vision Group of Funds and provide certain
administrative, personnel and services necessary to operate the Funds. FSC
provides transfer agency services through its subsidiary, Federated
Shareholder Services Company ("FSSC"), a registered transfer agent. FSC and
FSSC are indirect wholly-owned subsidiaries of Federated Investors, Inc. The
address of FSC and FSSC is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
For the services it provides to the Vision Group of Funds as
co-administrator, M&T Bank is entitled to receive an annual fee of 0.04% on
the first $5 billion of average aggregate daily net assets of the Funds and
0.015% on the average aggregate daily net assets in excess of $5 billion.
For its services as co-administrator, FSC is entitled to receive an annual
fee of 0.06% on the first $2 billion of average aggregate daily net assets of
the Vision Group of Funds; 0.03% on the next $3 billion of average aggregate
daily net assets of the Funds; and 0.015% on the average aggregate daily net
assets in excess of $5 billion. FSC is entitled to receive an annual fee of
0.03% on the average aggregate daily net assets of the Vision Group of Funds
for providing transfer agency and dividend disbursing services to the Vision
Funds through FSSC.
State Street Bank and Trust Company ("State Street"), P.O. Box 8609,
Boston, Massachusetts 02266-8609, provides certain financial administration
and fund accounting services to the Vision Group of Funds and is entitled to
receive an annual fee of 0.045% based on the average aggregate daily net
assets of the Vision Group of Funds. State Street serves as custodian of the
securities and cash of each of the Vision Funds.
The Vision Funds have adopted a Shareholder Services Plan on behalf of
each class of shares, which is administered by FAS. M&T Bank acts as
shareholder servicing agent for the Vision Funds, providing shareholder
assistance, communicating or facilitating purchases and redemptions of
shares, and distributing prospectuses and other information. Except for the
Vision International Equity Fund and Vision Small Cap Stock Fund, no Vision
Fund will pay or accrue shareholder servicing fees on Class A Shares or on
shares of the Vision Institutional Limited Duration U.S. Government Fund or
the Vision Institutional Prime Money Market Fund for a one-year period
beginning on the date of the Reorganization, which is expected to occur on or
about December 18, 2000, pursuant to contractual agreements with FAS and M&T
Bank. In the case of the Vision Small Cap Stock Fund, there will be a
contractual waiver of the shareholder services fee down to 0.20% of average
daily net assets from the maximum of 0.25% of average daily net assets for
this same period. Absent such waivers, the maximum shareholder services fee
payable on the Class A shares or the shares of the Vision Institutional
Limited Duration U.S. Government Fund and the Vision Institutional Prime
Money Market Fund is 0.25% of average daily net assets.
BISYS Fund Services Ohio, Inc. and Martindale serve as administrators
(the "Administrators") to the Governor Funds pursuant to a Management and
Administration Agreement (the "Administration Agreement"). The
Administrators assist in supervising all operations of the Governor Funds
(other than those performed by Martindale and Brinson under their respective
advisory and sub-advisory agreements, by The Bank of New York under the
custody agreement, by BISYS Fund Services, Inc. under the Transfer Agency
Agreement and Fund Accounting Agreement and by BISYS Fund Services Limited
Partnership ("BISYS") under the Distribution Agreement). Under the
Administration Agreement, the Administrators provide services such as
compliance services, financial reporting and tax reporting services. The
annual fees payable for such services are as follows: 0.15% of each Governor
Fund's (except for the Lifestyle Funds) average daily net assets. There are
no fees payable to the Administrators from the Lifestyle Funds under the
Administration Agreement. The address of BISYS Fund Services Ohio, Inc. is
3435 Stelzer Road, Columbus, Ohio 43218-3035.
BISYS Fund Services, Inc. ("BFS") provides certain fund accounting
services to each of the Governor Funds pursuant to a Fund Accounting
Agreement. Under the Fund Accounting Agreement, BFS maintains the accounting
books and records for the Governor Funds and provides portfolio accounting
services, expense accrual and payment services, fund valuation and financial
reporting services. BFS receives a fee from the Governor Funds for such
services for all series of the Governor Funds computed at an annual rate of
three one-hundredths of one percent (.03%) (.04% for the International Equity
Fund) of the Governor Funds' average daily net assets up to $2 billion and
.02% (.03% for the International Equity Fund) of the Governor Funds' average
daily net assets of $2 billion or more, subject to a minimum annual fee of
$30,000 ($40,000 for the International Equity Fund and $35,000 for the
Pennsylvania Municipal Bond Fund).
BFS also serves as transfer agent and dividend disbursing agent for the
Governor Funds pursuant to a Transfer Agency Agreement. Pursuant to the
Transfer Agency Agreement, BFS, among other things, performs the following
services in connection with the Governor Funds' shareholders of record:
maintenance of shareholder records for each of the Governor Funds'
shareholders of record; receiving and processing purchase, exchange and
redemption orders; processing dividend payments and reinvestments; and
assistance in mailing proxy solicitation materials and shareholder reports.
For such services, BFS receives a fee based on the number of shareholders of
record. For the fiscal year ended June 30, 2000, BFS received a fee of
$298,024 for these services.
The Bank of New York, 100 Church Street, New York, New York 10286,
serves as custodian of the securities and other assets of the Governor Funds.
DISTRIBUTION SERVICES
Federated Securities Corp. (the "Distributor"), a subsidiary of
Federated Investors, Inc., is the principal distributor for shares of the
Vision Funds and offers shares of the Vision Funds on a continuous,
best-efforts basis under a Distributor's Contract. Shares of the Vision
Funds are sold at the net asset value ("NAV") next determined after the
purchase order is received, plus any applicable sales charges. You may
purchase shares of the Vision Funds through M&T Bank, M&T Securities, Inc. or
through a broker-dealer, investment professional or financial institution
that has an agreement with the Distributor (an "Authorized Dealer"). The
Distributor markets the shares of the Vision Funds to institutions or
individuals, directly or through an Authorized Dealer. When the Distributor
receives marketing fees and sales charges, it may pay some or all of them to
Authorized Dealers. The Distributor and its affiliates may pay out of their
assets other amounts (including items of material value) to Authorized
Dealers for marketing and servicing shares of the Vision Funds.
Each Vision Fund (other than the Vision Treasury Money Market Fund) has
adopted a Rule 12b-1 Plan under the 1940 Act, which allows it to pay up to
0.25% of each Fund's average daily net assets in marketing fees to the
Distributor (who may then make payments to professionals such as banks,
including M&T Bank and its affiliates and Authorized Dealers) for the sale
and distribution of the Vision Funds' Class A Shares and the shares of the
Vision Institutional Limited Duration U.S. Government Fund and the Vision
Institutional Prime Money Market Fund. The Distributor may voluntarily waive
or reduce its fees. Because these shares pay marketing fees on an ongoing
basis, your investment cost may be higher over time than other shares with
different sales charges and marketing fees. Pursuant to a contractual
agreement with the Distributor, the Vision Funds will not pay or accrue Rule
12b-1 fees on Class A Shares or the shares of the Vision Institutional
Limited Duration U.S. Government Fund or the Vision Institutional Prime Money
Market Fund for a one-year period beginning on the date of the
Reorganization, which is expected to occur on or about December 18, 2000.
BISYS serves as agent for each Governor Fund in the distribution of its
shares pursuant to a Distribution Agreement. Shares of the Governor Funds
are sold on a continuous basis by BISYS. Shares of the Governor Funds are
sold at NAV next determined after an order is received, plus any applicable
sales charges. The address of BISYS is 3435 Stelzer Road, Columbus, Ohio
43218-3035.
The Governor Funds has adopted an Administrative Services Plan pursuant
to which each Governor Fund is authorized to pay compensation to banks and
other financial institutions (each a "Service Organization"), which may
include Martindale, Brinson, M&T Bank and its banking affiliates or their
correspondent entities, and BISYS, which agree to provide certain
ministerial, recordkeeping, and/or administrative support services for their
customers or account holders who are the beneficial or record owner of shares
of the Governor Funds. In consideration for such services, a Service
Organization receives a fee from each Governor Fund, computed daily and paid
monthly, at an annual rate of up to 0.25% of the average daily net assets of
shares of that Governor Fund owned beneficially or of record by such Service
Organization's customers or account holders for whom the Service Organization
provides such services.
The Governor Funds has adopted a Distribution Plan under Rule 12b-1
under the 1940 Act only with respect to the Lifestyle Funds and pursuant to
which each Lifestyle Fund is authorized to reimburse BISYS. Rule 12b-1 fees
compensate BISYS and other dealers and investment representatives for
services and expenses relating to the sale and distribution of the Lifestyle
Funds and/or providing shareholder services. Amounts paid to BISYS under the
Governor Funds' Rule 12b-1 Plan may be used by BISYS to cover expenses that
are related to (i) the distribution of shares of the Lifestyle Funds, (ii)
ongoing servicing and/or maintenance of the accounts of shareholders of the
Lifestyle Funds, (iii) payments to institutions for selling shares of the
Lifestyle Funds, and (iv) sub-transfer agency services, subaccounting
services or administrative services related to the sale of the shares of the
Lifestyle Funds. Under the Rule 12b-1 Plan, each Lifestyle Fund may
reimburse BISYS at an annual rate of up to 0.50% of the average daily net
assets of each Lifestyle Fund's shares. BISYS may delegate some or all of
these functions to another organization. The other Governor Funds do not pay
Rule 12b-1 fees.
PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES
The transfer agent and dividend disbursing agent for each of the Vision
Funds is FSSC. BFS acts as the transfer agent and dividend disbursing agent
of the Governor Funds. Procedures for the purchase, exchange and redemption
of each Vision Fund's shares differ somewhat from the procedures applicable
to the purchase, exchange and redemption of the shares of the Governor
Funds. Reference is made to the Prospectuses of the Vision Funds, and the
Prospectuses of the Governor Funds for a complete description of the
purchase, exchange and redemption procedures applicable to purchases,
exchanges and redemptions of Vision Fund and Governor Fund shares,
respectively, each of which is incorporated herein by reference thereto. Set
forth below is a brief description of the basic purchase, exchange and
redemption procedures applicable to the Vision Fund shares and the Governor
Fund shares.
Purchases of shares of the Vision Funds may be made through M&T Bank,
M&T Securities, Inc., or through an Authorized Dealer, directly from the Fund
or through an exchange from another Vision Fund. Accounts through an
Authorized Dealer may be subject to higher or lower minimum investment
requirements and may be subject to a transaction fee.
The maximum front-end sales charge that you will pay is 5.50% on an
investment in the Class A Shares of the Vision Large Cap Core Fund, Vision
Small Cap Stock Fund and Vision International Equity Fund; 5.00% on an
investment in the Class A Shares of the Vision Managed Allocation Funds;
4.50% on an investment in the Class A Shares of the Vision Intermediate Term
Bond Fund and Vision Pennsylvania Municipal Income Fund; and 3.00% on an
investment in the Vision Institutional Limited Duration U.S. Government
Fund. The Vision Treasury Money Market Fund and Vision Institutional Prime
Money Market Fund have no front-end sales charge. However, Governor Fund
shareholders will not be charged these sales charges in connection with the
Reorganization. Shares of the Vision Institutional Prime Money Market Fund
and Vision Institutional Limited Duration U.S. Government Fund are for
institutional investors that are not natural persons (e.g., corporations,
financial institutions, etc.) and that invest on their own behalf. The
current Governor Fund shareholders will continue to be permitted to make
subsequent investments in the Vision Institutional Prime Money Market Fund
and Vision Institutional Limited Duration U.S. Government Fund. The
following chart shows the minimum initial investment amounts for each Vision
Fund:
-------------------------------------------------------------------------------
INITIAL SUBSEQUENTRETIREMENTRETIREMENTSYSTEMATIC
INVESTMENT
PLAN PLAN
PLAN SUBSEQUENTSUBSEQUENT
INVESTMENTINVESTMENTINVESTMENTINVESTMENTINVESTMENT
MINIMUM MINIMUM MINIMUM MINIMUM MINIMUM
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
VISION FUNDS (other than Vision $500 $25 $250 $25 $25
Institutional Limited Duration
U.S. Government Fund and Vision
Institutional Prime Money
Market Fund)
-----------------------------------------------------------------------------
-------------------------------------------------------------------------------
VISION INSTITUTIONAL PRIME $1,000,000Any Not Not Not
MONEY MARKET FUND* Amount ApplicableApplicableApplicable+
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
VISION INSTITUTIONAL LIMITED $100,000 $1,000 Not Not $1,000+
DURATION U.S. GOVERNMENT FUND* ApplicableApplicable+
-------------------------------------------------------------------------------
* An account may be opened with a smaller amount as long as the minimum is
reached within 90 days.
+ Current Governor Fund shareholders who have retirement plans or systematic
investment plans in the U.S. Treasury Obligations Money Market Fund and
Limited Duration Government Securities Fund will continue to be permitted
to make subsequent investments of $25 or more in the corresponding Vision
Fund pursuant to such plans after the Reorganization.
The minimum initial and subsequent investment amounts in each Vision
Fund may be waived or lowered from time to time. An institutional investor's
minimum investment will be calculated by combining all accounts it maintains
with the Vision Group of Funds.
Non-retirement accounts may be closed if redemptions or exchanges cause
the account balance to fall below $250. Before an account is closed, you
will be notified and allowed 30 days to purchase additional shares to meet
the minimum account balance required.
Purchases of shares of the Governor Funds may be made through BISYS or
through banks, brokers and other investment representatives (which may charge
additional fees and may require higher minimum investments or may impose
other limitations on buying and selling shares), or directly by wire or check
once an account has been established. The maximum front-end sales charge
that you will pay is 5.50% on an investment in Investor Shares of the
Established Growth Fund, Aggressive Growth Fund and International Equity
Fund; 4.50% on an investment in Investor Shares of the Lifestyle Funds,
Intermediate Term Income Fund and Pennsylvania Municipal Bond Fund; and 3.00%
on an investment in Investor Shares of the Limited Duration Government
Securities Fund. The Investor Shares of the U.S. Treasury Obligations Money
Market Fund and Prime Money Market Fund do not charge a front-end sales
charge. The minimum initial investment to establish an account with each
Governor Fund is $1,000 for both non-retirement accounts and retirement
accounts (IRAs) ($250 for employees of Martindale, M&T Bank or their
affiliates), and $250 for an Automatic Investment Plan Account. Once you
have met the account minimum, subsequent purchases can be made for as little
as $25. The minimum investment amount is reduced for employees of Martindale
or any of its affiliates.
If your account falls below $1,000 ($250 if you are an employee of
Martindale or one of its affiliates), a Governor Fund may ask you to increase
your balance. If it is still below $1,000 (or $250) after 60 days, the
Governor Fund may close your account and send you the proceeds.
Each Governor Fund and each Vision Fund reserves the right to reject
any purchase request.
Certain investors and transactions in the Vision Funds and the Governor
Funds may be subject to reduced or waived sales charges. For a complete
description of sales charges and exemptions from such charges, reference is
made to the Prospectuses and SAIs of the Vision Funds and the Prospectuses
and SAI of the Governor Funds, which are incorporated by reference herein. A
copy of the prospectus of the Vision Fund into which your Governor Fund will
be reorganized is included herewith.
The purchase price of each of the shares of the Vision Funds is based
on NAV, plus any applicable sales charges. However, Governor Fund
shareholders will not be charged these sales charges in connection with the
Reorganization.
The purchase price of each of the shares of the Governor Funds is based
on NAV, plus any applicable sales charges. Except in limited circumstances,
the NAV per share for each Vision Fund (other than the Vision U.S. Treasury
Money Market Fund and Vision Institutional Prime Money Market Fund) and each
Governor Fund is calculated as of the close of regular trading (normally
4:00 p.m., Eastern time) on the New York Stock Exchange, Inc. (the "NYSE") on
each day on which the NYSE is open for business. The NAV for the Governor
Prime Money Market Fund and Governor U.S. Treasury Obligations Money Market
Fund is determined at 12 noon (Eastern Time) and the close of regular trading
on the NYSE on each day on which the NYSE is open for trading and any other
day (other than a day on which no shares of that Fund are tendered for
redemption and no order to purchase any shares of that Fund is received)
during which there is sufficient trading in portfolio instruments such that
the Fund's NAV might be materially affected.
The NAV per share for the Vision U.S. Treasury Money Market Fund is
calculated at 12 noon (Eastern Time), 3:00 p.m. (Eastern Time) and 4:00 p.m.
(Eastern Time) on each day on which the NYSE is open for business. The NAV
per share for the Vision Institutional Prime Money Market Fund is calculated
at 3:00 p.m. (Eastern Time) on each day on which the NYSE is open for
business.
Payment for shares of a Vision Fund may be made by check, federal funds
wire, by debiting an account at M&T Bank or any of its affiliate banks, or
through a depository institution that is an Automated Clearing House (ACH)
member or a retirement account (for all Vision Funds except the Vision
Institutional Prime Money Market Fund and Vision Institutional Limited
Duration U.S. Government Fund).
Purchase orders for the Vision Treasury Money Market Fund must be
received by 11:00 a.m. (Eastern time) to receive that day's dividend, and
purchase orders for the Vision Institutional Prime Money Market Fund must be
received by 3:00 p.m. (Eastern time) to begin earning dividends the next
day. For settlement of an order to occur for the Vision Treasury Money
Market Fund and Vision Institutional Prime Money Market Fund, payment must be
received by wire by 3:00 p.m. (Eastern time) that same day. Purchase orders
for all other Vision Funds must be received by 4:00 p.m. (Eastern time) in
order to receive that day's closing NAV. Purchase orders through ACH must be
received by 3:00 p.m. (Eastern time). For settlement of an order to occur,
payment must be received on the next business day following the order.
Vision Fund purchase orders by mail using a check as payment are
considered received after payment by check has been converted into federal
funds. This is normally the next business day after the check is received,
and shares will be eligible to receive interest and/or dividends when the
Fund receives the payment. Shares of the Vision Treasury Money Market Fund
and Vision Institutional Prime Money Market Fund purchased by check begin
earning dividends on the day after the check is converted into federal
funds.
Governor Fund purchase orders are priced at the next NAV calculated
after your order is received in good order and accepted by the Governor Fund,
less any applicable sales charges, on any day that the NYSE is open for
business.
Shares of one Vision Fund may be exchanged for the same share class of
another Vision Fund at the NAV next determined after the Fund's receipt of
the exchange in proper form. If you exchange from a Vision Fund that has no
sales charge to a Vision Fund that imposes a sales charge, you will be
subject to the sales charge. The exchange is subject to any minimum initial
or subsequent minimum investment amounts of the fund into which the exchange
is being made, and is treated as a sale of your shares for federal tax
purposes. Shares of the Governor Funds may be exchanged for shares of
another Governor Fund, usually without paying a sales charge, if you satisfy
the minimum investment requirements for the Fund into which you are
exchanging. When exchanging from a Governor Fund that has no sales charge or
a lower sales charge to a Governor Fund with a higher sales charge, you will
pay the difference.
Redemptions of Vision Fund shares may be made through an Authorized
Dealer, directly from the Fund by telephone or by mailing a written request.
Redemption requests for shares held through an IRA account must be made by
mail and not by telephone. Vision Fund shares are redeemed at their NAV next
determined after the redemption request is received in proper form, subject
to daily cut off times, on each day on which the Fund computes its NAV. When
redeeming shares by telephone, proceeds normally are sent to a previously
designated account at a financial institution that is an ACH member or wired
to your account at a domestic commercial bank that is a Federal Reserve
System member. When redeeming shares by mail, a check for the proceeds
normally is mailed within one business day after receiving a written request
in proper form. Payment may be delayed up to seven days in certain
circumstances.
Redemptions of Governor Fund shares may be made by telephone or by
mailing a written request to the Fund or through your financial adviser or
broker. Governor Fund shares are redeemed at their NAV next determined after
the redemption request is received by the Fund, its transfer agent or your
investment representative in proper form. Normally, you will receive your
proceeds within a week after your request is received. When redeeming by
phone, you may have the proceeds mailed or wired to your bank account, if you
indicated this option on your account application, or sent to your U.S. bank
account by an ACH. If you call by 4:00 p.m. Eastern Time, proceeds will
normally be wired to your bank on the next business day after your redemption
request. Proceeds sent by ACH transfer will be credited within eight days.
You may request checks to redeem shares of the Vision Treasury Money
Market Fund. Your account will continue to receive the daily dividend
declared on the shares being redeemed until the check is presented for
payment. The ability to redeem shares by check may not be available when
establishing an account through an Authorized Dealer. The ability to redeem
shares by check is not available to Vision Institutional Prime Money Market
Fund accounts or any of the other Vision Funds participating in the
Reorganization.
Shareholders of the Prime Money Market Fund and U.S. Treasury
Obligations Money Market Fund may redeem shares by writing checks on their
account (in any amount not less than $500) to make payments to any person or
business. Dividends and distributions will continue to be paid up to the day
the check is presented for payment. You must maintain the minimum required
account balance of $1,000 per Fund and may not close your account by writing
a check.
DIVIDENDS AND OTHER DISTRIBUTIONS
The following chart compares when each Governor Fund and each Vision
Fund declares and pays dividends, if any. All of the Governor Funds and
Vision Funds declare and pay capital gain distributions, if any, at least
annually.
-------------------------------------------------------------------------------
GOVERNOR FUND DIVIDENDS VISION FUND DIVIDENDS
DISTRIBUTION DISTRIBUTION
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
AGGRESSIVE GROWTH FUND declares and VISION SMALL CAP STOCK declares and
pays quarterly FUND pays quarterly
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
ESTABLISHED GROWTH FUND declares and VISION LARGE CAP CORE declares and
pays quarterly FUND pays quarterly
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
INTERMEDIATE TERM declares and VISION INTERMEDIATE declares and
INCOME FUND pays monthly TERM BOND FUND pays monthly
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
INTERNATIONAL EQUITY declares and VISION INTERNATIONAL declares and
FUND pays annually EQUITY FUND pays annually
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
LIFESTYLE CONSERVATIVE declares and VISION MANAGED declares and
GROWTH FUND pays quarterly ALLOCATION FUND - pays quarterly
CONSERVATIVE GROWTH
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
LIFESTYLE MODERATE declares and VISION MANAGED declares and
GROWTH FUND pays quarterly ALLOCATION FUND - pays quarterly
MODERATE GROWTH
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
LIFESTYLE GROWTH FUND declares and VISION MANAGED declares and
pays quarterly ALLOCATION FUND - pays quarterly
AGGRESSIVE GROWTH
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
LIMITED DURATION declares and VISION INSTITUTIONAL declares and
GOVERNMENT SECURITIES pays monthly LIMITED DURATION U.S. pays monthly
FUND GOVERNMENT FUND
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
PENNSYLVANIA MUNICIPAL declares and VISION PENNSYLVANIA declares and
BOND FUND pays monthly MUNICIPAL INCOME FUND pays monthly
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
PRIME MONEY MARKET FUND declares VISION INSTITUTIONAL declares
daily and PRIME MONEY MARKET FUND daily and
pays monthly pays monthly
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
U.S. TREASURY declares VISION TREASURY MONEY declares
OBLIGATIONS MONEY daily and MARKET FUND daily and
MARKET FUND pays monthly pays monthly
-------------------------------------------------------------------------------
With respect to both the Vision Funds and the Governor Funds, unless a
shareholder otherwise instructs, dividends and/or capital gain distributions
will be reinvested automatically in additional shares at net asset value.
TAX CONSEQUENCES
As a condition to the Reorganization, each Vision Fund and each
Governor Fund will receive an opinion of counsel that the Reorganization will
be considered a tax-free "reorganization" under applicable provisions of the
Code so that neither the Vision Fund nor the Governor Fund nor the
shareholders of either fund will recognize any gain or loss in connection
with the Reorganization. The tax basis of the Vision Fund shares received by
the Governor Fund shareholders will be the same as the tax basis of their
shares in the Governor Fund.
INFORMATION ABOUT THE REORGANIZATION
MERGER BETWEEN KEYSTONE AND M&T CORP.
On October 6, 2000, Keystone merged into M&T Corp., the corporate
parent of M&T Bank ("Bank Merger"). Prior to this Bank Merger, Martindale,
the investment adviser to the Governor Funds, was a wholly-owned subsidiary
of Keystone. The reorganization described in this Prospectus/Proxy Statement
is being proposed in connection with the Bank Merger. The Reorganization has
been proposed by M&T Corp. and M&T Bank as a means of combining each Governor
Fund with a fund managed by M&T Bank with comparable investment objectives,
policies and restrictions. The Reorganization has also been proposed to
promote more efficient operations, to eliminate certain duplicative costs and
to enhance the distribution of fund shares by eliminating redundant
investment products sponsored by the same organization. The existence of
separate fund groups and duplicative funds in the family of funds sponsored
by M&T could impede the ability of such funds to attract sufficient assets in
the future to enjoy reduced expenses per share from economies of scale.
M&T Bank is the principal banking subsidiary of M&T Corp. M&T Bank was
founded in 1856 and provides comprehensive banking and financial services to
individuals, governmental entities and businesses throughout New York State.
As of June 30, 2000, M&T Bank managed $2.3 billion in net assets of mutual
funds.
CONSIDERATIONS BY THE BOARD OF TRUSTEES OF THE GOVERNOR FUNDS
The Board of Trustees of the Governor Funds believes that the proposed
Reorganization is in the best interests of the Governor Fund shareholders.
The Board of Trustees of the Governor Funds met on August 3, 2000,
September 14, 2000, and October 27, 2000 to receive information regarding M&T
Bank and the Vision Funds, to discuss this information and to consider the
proposed Plan pursuant to which the Reorganization would be effected. After
reviewing the terms of the Plan with legal counsel, the Board of Trustees of
the Governor Funds, including the trustees who are not "interested persons,"
as that term is defined in the 1940 Act ("Independent Trustees"), approved
the Plan and recommended its approval by the shareholders of the Governor
Funds. In approving the Plan, the Board determined that participation in the
Reorganization is in the best interests of each Governor Fund and that the
interests of the shareholders of each Governor Fund would not be diluted as a
result of the Reorganization. In approving the Plan, the Board considered a
number of factors, including the following:
o Substantial similarities exist between the investment objectives,
policies, and strategies of the Governor Funds and their
corresponding Vision Funds. Thus, the Reorganization will enable
Governor Fund shareholders to continue their current investment
programs without substantial disruption. Certain of the Vision
Funds have recently been organized for the purpose of continuing the
investment operations of the corresponding Governor Funds, and have
no prior operating history.
o Governor Fund shareholders will not pay a sales charge to become
shareholders of the Vision Funds in connection with the
Reorganization.
o Governor Fund shareholders will not have to pay any federal income tax
solely as a result of the Reorganization.
o Expenses of the Reorganization will not be borne by any of the Governor
Funds or the Vision Funds.
o Because the proposed Reorganization will be effected on the basis of
the relative net asset values of the Vision Funds and their
corresponding Governor Funds, shareholders of the Governor Funds
will not experience any dilution in the value of their investments
as a result of the Reorganization.
o The expense ratios after fee waivers (both contractual and voluntary)
of the Vision Funds are within industry norms. The Board considered
the existing contractual fee waivers and expense limitations in
place for the Governor Funds, and their expiration on October 31,
2000. The Board also considered the contractual fee waivers and
expense limitations that will be in place for the Vision Funds for a
one-year period starting from the Closing of the Reorganization, and
that this is a condition to the Reorganization. The Board compared
the expense ratios of the Governor Funds and the Vision Funds before
and after any and all contractual and voluntary fee waivers and
expense limitations. See "Summary - Comparative Fee Tables"
elsewhere herein. The Board considered these factors in conjunction
with the economies of scale that may result from the proposed
Reorganization, the pressures in the marketplace on Vision Funds as
well as other mutual fund companies to maintain expense ratios at
competitive levels, and other anticipated benefits of the proposed
transactions to the Governor Fund shareholders.
o The sale of assets of the Governor Funds to the Vision Funds might
enable the combined entity to obtain certain economies of scale with
attendant savings in cost for the Governor Funds.
o M&T Bank has experience in managing registered investment companies and
has developed capabilities and resources that could benefit the
shareholders of the Governor Funds.
o The portfolio managers and investment personnel who are responsible for
managing the Vision Funds are well-trained and experienced. In
addition, certain of the portfolio managers of the Governor Funds
co-manage the corresponding Vision Fund.
o The availability of high-quality fund administration and shareholder
services.
o As shareholders of the Vision Funds, the Reorganization would provide
shareholders with exchange privileges with respect to the same share
class of the other series of the Vision Funds, each with different
investment objectives and policies and, therefore, would provide the
Governor Funds with a broader array of investment options.
o It may be detrimental for the Governor Funds to compete for the same
investor assets with the Vision Funds, each of which is advised by a
subsidiary of M&T Corp.
The Board of Trustees of the Governor Funds did not assign relative
weights to the foregoing factors or deem any one or group of them to be
controlling in and of themselves.
In approving the Plan, the Board also considered the provisions of
Section 15(f) of the 1940 Act. Section 15(f) of the 1940 Act provides that,
in connection with the sale of any interest in any investment adviser that
results in the "assignment" of an investment advisory agreement, an
investment adviser of a registered investment company, such as the Governor
Funds, or an affiliated person of such investment adviser, may receive any
amount or benefit if: (i) for a period of three years after the sale, at
least 75% of the members of the board of the investment company are not
interested persons of the investment adviser or the predecessor investment
adviser, and (ii) there is no "unfair burden" imposed on the investment
company as a result of such sale or any express or implied terms, conditions
or understanding applicable thereto. For this purpose, "unfair burden" is
defined to include any arrangement during the two-year period after the date
on which the transaction occurs, whereby the investment adviser or its
predecessor or successor investment advisers, or any interested persons of
any such adviser, receives or is entitled to receive any compensation
directly or indirectly from: (i) any person in connection with the purchase
or sale of securities or other property to, from or on behalf of the
investment company other than bona fide ordinary compensation as principal
underwriter for such company, or (ii) the investment company or its security
holders for other than bona fide investment advisory or other services. This
provision of the 1940 Act was enacted by Congress in 1975 to make it clear
that an investment adviser (or an affiliated person of the adviser) can
realize a profit on the sale of the adviser's business subject to the two
safeguards described above.
For a period of three years after the Bank Merger, the Vision Group of
Funds will use its best efforts to ensure that at least 75% of the members of
the Board of Trustees of the Vision Group of Funds are not "interested
persons" of M&T Bank or Martindale within the meaning of the 1940 Act; the
Vision Group of Funds will meet this requirement following the
Reorganization. The Board is not aware of any circumstances arising from the
Reorganization that will result in an "unfair burden" being imposed on the
shareholders of the Governor Funds. In addition, the Board has requested and
received a written representation from M&T Bank that no "unfair burden" will
be imposed on the Governor Funds as a result of the Reorganization.
The Board of Trustees of the Vision Group of Funds (including a
majority of the Independent Trustees) met on August 8 and 11, 2000, and
approved the Plan on August 11, 2000. The Board unanimously concluded that
consummation of the Reorganization is in the best interests of the Vision
Funds and the shareholders of the Vision Funds and that the interests of the
Vision Fund shareholders would not be diluted as a result of effecting the
Reorganization and have unanimously voted to approve the Plan.
DESCRIPTION OF THE PLAN OF REORGANIZATION
The Plan provides that your Governor Fund will transfer all or
substantially all of its assets and liabilities to a corresponding Vision
Fund in exchange solely for the Vision Fund's shares to be distributed pro
rata by the Governor Fund to its shareholders in complete liquidation of the
Governor Fund currently anticipated to occur on or about December 18, 2000
("Closing"). The value of each Governor Fund's net assets to be acquired by
the corresponding Vision Fund shall be the value of such net assets computed
as of the close of regular trading on the NYSE (normally 4:00 p.m. Eastern
time) on the business day preceding the Closing ("Closing Date"). Governor
Fund shareholders will become shareholders of the corresponding Vision Fund
as of the Closing, and will be entitled to the Vision Fund's next dividend
distribution thereafter.
On or before the Closing Date, each Governor Fund and the Vision
Treasury Money Market Fund will declare and pay a dividend or dividends,
which, together with all previous dividends, will have the effect of
distributing to its shareholders substantially all of its net investment
income and realized net capital gain, if any, for all taxable years ending on
or before the Closing Date.
The stock transfer books of each Governor Fund will be permanently
closed as of 4:00 p.m. Eastern time on the Closing Date and only requests for
redemption of shares of a Governor Fund received in proper form prior to 4:00
p.m. Eastern time on the Closing Date will be accepted by the Governor Fund.
Redemption requests relating to the Governor Fund thereafter shall be deemed
to be redemption requests for shares of the Vision Fund to be distributed to
the former shareholders of the Governor Fund. Any redemptions that you make
either before or after the Closing Date may result in a tax liability to
you. Please consult your tax advisor.
Consummation of the Reorganization is subject to the conditions set
forth in the Plan, including approval of the Plan by the respective Governor
Fund shareholders, receipt of an order from the SEC exempting the
transactions contemplated by the Plan from Section 17(a) of the 1940 Act, and
receipt of an opinion in form and substance reasonably satisfactory to the
Governor Funds and the Vision Funds, as described under the caption "Federal
Income Tax Consequences" below.
Unless applicable law shall require a shareholder vote, the Plan may be
amended without shareholder approval by mutual agreement in writing of the
Governor Funds and the Vision Funds. The Plan may be terminated and the
Reorganization may be abandoned at any time before or after approval by the
Governor Fund shareholders prior to the Closing by either party if it
believes that consummation of the Reorganization would not be in the best
interests of its shareholders.
In the event that the shareholders of a Governor Fund do not approve
the Plan relating to that Governor Fund, the assets and liabilities of that
Governor Fund will not be transferred at the Closing and the obligations of
the Governor Fund under the Plan shall not be effective. If the
Reorganization is not approved by the shareholders of a particular Governor
Fund, the Board of Trustees of the Governor Funds will consider other
alternatives for that Governor Fund, including dissolution and liquidation of
such Fund.
The expenses incurred in connection with entering into and consummating
the transactions contemplated by the Plan will not be borne by the Governor
Funds or the Vision Funds, and will be borne by M&T Bank.
The foregoing description of the Plan entered into between the Vision
Funds and the Governor Funds does not purport to be complete, and is subject
in all respects to the provisions of, and is qualified in its entirety by
reference to, the Plan, the Form of which is attached hereto as Exhibit A and
incorporated herein by reference thereto.
DESCRIPTION OF VISION FUND SHARES
Full and fractional shares of the Vision Funds will be issued without
the imposition of a sales charge or other fee to the Governor Fund
shareholders in accordance with the procedures described above. Shares of
the Vision Funds to be issued to Governor Fund shareholders under the Plan
will be fully paid and non-assessable when issued and transferable without
restriction and will have no preemptive or conversion rights. Like the
Governor Funds, the Vision Funds do not issue share certificates. For
additional information about shares of the Vision Fund, reference is hereby
made to the Prospectus of the Vision Fund into which your Governor Fund will
be reorganized, which is being provided herewith.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to each Reorganization, the participating Vision Fund
and Governor Fund will receive an opinion from counsel to the effect that, on
the basis of the existing provisions of the Code, current administrative
rules and court decisions, and on the basis of certain assumptions and
representations received from the Governor Funds and the Vision Funds, for
federal income tax purposes, shareholders of each Governor Fund will not
recognize any gain or loss for federal income tax purposes as a result of the
exchange of their shares of the Governor Fund for shares of the Vision Fund
and neither the Vision Fund nor its shareholders will recognize any gain or
loss upon receipt of the assets of the Governor Fund.
You should recognize that an opinion of counsel is not binding on the
Internal Revenue Service ("IRS") or any court. Neither the Governor Funds
nor the Vision Funds will seek to obtain a ruling from the IRS regarding the
tax consequences of the Reorganizations. Accordingly, if the IRS sought to
challenge the tax treatment of any Reorganization and were successful,
neither of which is anticipated, the Reorganization could be treated, in
whole or in part, as a taxable sale of assets of the participating Governor
Fund, followed by the taxable liquidation thereof.
You will continue to be responsible for tracking the purchase cost and
holding period of your shares and should consult your tax advisor regarding
the effect, if any, of the Reorganizations in light of your individual
circumstances. You should also consult your tax advisor as to state and
local tax consequences, if any, of the Reorganizations, because this
discussion only relates to the federal income tax consequences.
The Vision Funds expect to retain most of the securities acquired in
connection with each Reorganization and do not anticipate that taxable sales
involving significant amounts of securities will have to be made before or
after the Reorganizations to effect a realignment with the policies and
investment practices of the applicable Vision Funds.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS
While the Vision Group of Funds and the Governor Funds are different
entities, and thus, governed by different organizational documents, the
Reorganization will not result in material differences in shareholder
rights. The shares of a Vision Fund to be distributed to shareholders of a
corresponding Governor Fund will have the same legal characteristics as the
shares of the Governor Fund with respect to such matters as voting rights,
assessibility, conversion rights, and transferability.
The Vision Group of Funds and the Governor Funds are each organized as
a Delaware business trust and governed by an Agreement and Declaration of
Trust. Under its Agreement and Declaration of Trust, the Vision Group of
Funds has an unlimited number of authorized shares of beneficial interest
with no par value. The Governor Funds, pursuant to its Agreement and
Declaration of Trust, has an unlimited number of authorized shares of
beneficial interest with each share having a par value of $.0001 per share.
The Boards of Trustees of the Vision Group of Funds and of the Governor Funds
(the "Boards") may, without shareholder approval, divide the authorized
shares of the Vision Group of Funds and the Governor Funds into an unlimited
number of separate portfolios or series ("series"). The Boards may also,
without shareholder approval, divide the series into two or more classes of
shares. The Vision Group of Funds currently consists of eighteen series.
With respect to its eighteen series, the Vision Group of Funds offers two
classes of shares for six of its series (designated Class A Shares and Class
B Shares) and one class of shares for twelve of its series (designated Class
A Shares, except for Vision Institutional Prime Money Market Fund and Vision
Institutional Limited Duration U.S. Government Fund, which do not have a
class designation). The Governor Funds currently offers one class of shares,
the Investor Shares, for its eleven series. The Prime Money Market Fund of
the Governor Funds has two classes of shares, Investor Shares and S Shares
(the S Shares will be liquidated on or about December 1, 2000). The Vision
Group of Funds and each series of the Vision Group of Funds, as well as the
Governor Funds and each series of the Governor Funds, will continue
indefinitely until terminated.
With respect to a series of shares of the Vision Group of Funds and the
Governor Funds, shares of the same class have equal dividend, distribution,
liquidation and voting rights, and fractional shares have those rights
proportionately. Each series or class bears its own expenses related to its
distribution of shares (and other expenses such as transfer agency,
shareholder service and administration expenses). Generally, shares of the
Vision Group of Funds or the Governor Funds will be voted in the aggregate
without differentiation between separate series or classes except if: (1) a
matter only affects certain series or classes, then only shares of such
affected series or classes shall be voted in the aggregate; or (2) a Board
determines that the matter should be voted on separately by individual series
or classes.
Delaware law does not require the Vision Group of Funds or the Governor
Funds to hold annual meetings of shareholders, and generally, the Vision
Group of Funds and the Governor Funds will hold shareholder meetings only
when specifically required by federal or state law. Shareholders
representing a majority or more of the Governor Funds' (or its respective
series') outstanding shares entitled to vote may call meetings of the
Governor Funds (or its series) for the purpose of taking action upon any
matter as to which the vote or authority of shareholders is permitted or
required, including, in the case of a meeting of the Governor Funds, the
purpose of voting on the removal of one or more Trustees. The Vision Group
of Funds' Agreement and Declaration of Trust does not contain any statement
concerning the ability of shareholders to call meetings (although federal law
may, under certain circumstances, accord shareholders such a right).
Like the Governor Funds, there are no conversion or preemptive rights
in connection with shares of the Vision Group of Funds. When issued, all
shares will be fully paid and non-assessable. With respect to a series of
shares, a shareholder of a class of shares will receive a pro rata share of
all distributions arising from that series' assets attributable to the class
of shares owned by the shareholder and, upon redeeming shares, will receive
the portion of the series' net assets attributable to the class of shares
owned by the shareholder represented by the redeemed shares.
CAPITALIZATION
The following table sets forth, as of August 31, 2000: (i) the
unaudited capitalization of the Investor Shares of the Governor Fund, (ii)
the unaudited capitalization of the Vision Fund, and (iii) the pro forma
unaudited capitalization of the Vision Fund as adjusted to give effect to the
proposed Reorganization. The capitalization of the Vision Fund is likely to
be different when the Reorganization is consummated because of purchases and
sales of Vision Fund shares and market action.
<TABLE>
<CAPTION>
VISION SMALL AGGRESSIVE VISION
PRO FORMA
CAP STOCK FUND GROWTH FUND COMBINED
--------------- --------------- -------------------
<S> <C> <C> <C>
Net Assets.............. $0 $158,321,084 $158,321,084
Net Asset Value Per Share $0* $12.65 $12.65*
Shares Outstanding...... 0 12,515,793.549 12,515,793.549
VISION
VISION LARGE ESTABLISHED PRO FORMA
CAP CORE FUND GROWTH FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $288,375,796 $288,375,796
Net Asset Value Per Share $0* $14.55 $14.55*
Shares Outstanding...... 0 19,817,974.271 19,817,974.271
VISION INTERMEDIATE VISION
INTERMEDIATE TERM INCOME PRO FORMA
TERM BOND FUND FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $244,761,343 $244,761,343
Net Asset Value Per Share $0* $9.26 $9.26*
Shares Outstanding...... 0 26,426,907.362 26,426,907.362
VISION VISION
INTERNATIONAL INTERNATIONAL PRO FORMA
EQUITY FUND EQUITY FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $38,094,264 $38,094,264
Net Asset Value Per Share $0* $9.70 $9.70*
Shares Outstanding...... 0 3,928,832.761 3,928,832.761
VISION
MANAGED
ALLOCATION
FUND - LIFESTYLE VISION
CONSERVATIVE CONSERVATIVE PRO FORMA
GROWTH GROWTH FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $300,809 $300,809
Net Asset Value Per Share $0* $10.63 $10.63*
Shares Outstanding...... 0 28,290.564 28,290.564
VISION
MANAGED
ALLOCATION
FUND - VISION
AGGRESSIVE LIFESTYLE PRO FORMA
GROWTH GROWTH FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $1,545,702 $1,545,702
Net Asset Value Per Share $0* $11.86 $11.86*
Shares Outstanding...... 0 130,311.179 130,311.179
VISION
MANAGED
ALLOCATION
FUND - LIFESTYLE VISION
MODERATE MODERATE PRO FORMA
GROWTH GROWTH FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $1,341,685 $1,341,685
Net Asset Value Per Share $0* $11.41 $11.41*
Shares Outstanding...... 0 117,588.736 117,588.736
VISION
INSTITUTIONAL LIMITED
LIMITED DURATION
DURATION U.S. GOVERNMENT VISION
GOVERNMENT SECURITIES PRO FORMA
FUND FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $71,942,199 $71,942,199
Net Asset Value Per Share $0* $9.72 $9.72*
Shares Outstanding...... 0 7,404,640.780 7,404,640.780
VISION
PENNSYLVANIA PENNSYLVANIA VISION
MUNICIPAL MUNICIPAL PRO FORMA
INCOME FUND BOND FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $92,410,224 $92,410,224
Net Asset Value Per Share $0* $9.90 $9.90*
Shares Outstanding...... 0 9,337,645.984 9,337,645.984
VISION
INSTITUTIONAL VISION
PRIME MONEY PRIME MONEY PRO FORMA
MARKET FUND MARKET FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $0 $278,177,386 $278,177,386
Net Asset Value Per Share $1.00 $1.00 $1.00
Shares Outstanding...... 0 278,168,900.56 278,168,900.56
VISION U.S. TREASURY
TREASURY OBLIGATIONS VISION
MONEY MARKET MONEY MARKET PRO FORMA
FUND FUND COMBINED
--------------- --------------- -------------------
Net Assets.............. $675,001,592 $15,993,916 $690,995,508
Net Asset Value Per Share $1.00* $1.00 $1.00*
Shares Outstanding...... 674,986,617 15,994,535.010 690,981,152.010
--------------------
</TABLE>
* Net Asset Value of Class A Shares.
INFORMATION ABOUT THE VISION FUNDS AND THE GOVERNOR FUNDS
VISION FUNDS
Information about each Vision Fund is contained in the Vision Fund's
current Prospectuses, each of which is incorporated herein by reference. A
copy of the current Prospectus of the Vision Fund for which your Governor
Fund shares will be exchanged is included herewith. Additional information
about each Vision Fund is included in that Fund's Statement of Additional
Information, and the Statement of Additional Information dated November 9,
2000 (relating to this Prospectus/Proxy Statement), each of which is
incorporated herein by reference. Copies of the Statements of Additional
Information, which have been filed with the SEC, may be obtained upon request
and without charge by contacting the Vision Funds at 1-800-836-2211 or by
writing the Vision Group of Funds at One M&T Plaza, Buffalo, New York
14203. The Vision Funds are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940
Act. In accordance with the 1934 and 1940 Acts, the Vision Funds file
reports and other information with the SEC. Reports, proxy and information
statements, and other information filed by the Vision Funds can be obtained
by calling or writing the Vision Funds, and can also be inspected and copied
by the public at the public reference facilities maintained by the SEC in
Washington, D.C. located at Room 1200, 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies of such material can be obtained from the SEC through
its Public Reference Branch, SEC, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates or from its Internet site at http://www.sec.gov.
To request information regarding the Vision Funds, you may also send an
e-mail to the SEC at [email protected].
This Prospectus/Proxy Statement, which constitutes part of a
Registration Statement filed by the Vision Funds with the SEC under the
Securities Act of 1933, as amended, omits certain of the information
contained in the Registration Statement. Reference is hereby made to the
Registration Statement and to the exhibits thereto for further information
with respect to the Vision Funds and the shares offered hereby. Statements
contained herein concerning the provisions of documents are necessarily
summaries of such documents, and each such statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
SEC.
GOVERNOR FUNDS
Information about the Governor Funds is contained in each Governor
Fund's current Prospectus, Annual Report to Shareholders, Statement of
Additional Information, and the Statement of Additional Information dated
November 9, 2000 (relating to this Prospectus/Proxy Statement), each of which
is incorporated herein by reference. Copies of such Prospectuses, Annual
Reports, and Statements of Additional Information, which have been filed with
the SEC, may be obtained upon request and without charge from the Governor
Funds by calling 1-800-766-3960, or by writing the Governor Funds at c/o
BISYS, P.O. Box 182707, Columbus, Ohio 43218-2707. The Governor Funds are
subject to the informational requirements of the 1934 Act and the 1940 Act
and, in accordance therewith, file reports and other information with the
SEC. Reports, proxy and information statements, and other information filed
by the Governor Funds can be obtained by calling or writing the Governor
Funds and can also be inspected at the public reference facilities maintained
by the SEC or obtained at prescribed rates at the addresses listed in the
previous section or from the SEC's Internet site at http://www.sec.gov. To
request information regarding the Governor Funds, you may also send an e-mail
to the SEC at [email protected].
PROPOSAL 2: APPROVAL OF A NEW ADVISORY AGREEMENT WITH MARTINDALE
INTRODUCTION
At the Special Meeting, you also will be asked to approve a New
Advisory Agreement for your Governor Fund, which is being submitted in
connection with the Bank Merger between Keystone and M&T Corp. on October 6,
2000. As a result of the Bank Merger, the investment advisory agreement with
Martindale then in effect ("Previous Advisory Agreement") automatically
terminated in accordance with its terms and as required by the 1940 Act. As
discussed below, since the termination of the Previous Advisory Agreement,
Martindale has been providing investment advisory services under the terms of
an interim investment advisory agreement.
INTERIM ADVISORY AGREEMENT
To assure the continued supervision of the investments of the Governor
Funds after the Bank Merger and the resulting termination of the Previous
Advisory Agreement, the Board of Trustees (including a majority of the
Independent Trustees) of the Governor Funds approved an interim investment
advisory agreement for each Governor Fund with Martindale pursuant to Rule
15a-4 under the 1940 Act ("Interim Advisory Agreement") at an in-person
meeting of the Board of Trustees of the Governor Funds held on September 14,
2000. As required by Rule 15a-4, the terms and conditions of the Interim
Advisory Agreement are identical in all material respects to the Previous
Advisory Agreement, including the rate of investment advisory fee, except for
its dates of effectiveness and termination and escrow provisions and other
terms envisioned by Rule 15a-4. Since the date of the Bank Merger,
Martindale has provided investment advisory services to the Governor Funds
under the Interim Advisory Agreement.
The Interim Advisory Agreement became effective on the date of the Bank
Merger (October 6, 2000) ("Interim Advisory Agreement Effective Date") and
will terminate the earlier of 150 days from the Interim Advisory Agreement
Effective Date or upon shareholder approval of a new investment advisory
agreement. The Interim Advisory Agreement also provides that the Board of
Trustees of the Governor Funds or, as to a particular Governor Fund, a
majority of that Governor Fund's outstanding voting securities, as that term
is defined in the 1940 Act, may terminate the Interim Advisory Agreement on
10 calendar days' written notice to Martindale. The Interim Advisory
Agreement terminates in the event of an assignment as that term is defined in
the 1940 Act.
Pursuant to the terms of the Interim Advisory Agreement, the maximum
amount of compensation payable to Martindale during this interim period is no
greater than that which would have been payable to Martindale under the
Previous Advisory Agreement. The compensation to be paid to Martindale under
the Interim Advisory Agreement is being held in an interest-bearing escrow
account with State Street.
In accordance with the provisions of Rule 15a-4, the Interim Agreement
also provides that, if the shareholders of a Governor Fund approve a new
investment advisory agreement with Martindale no later than 150 days from the
Interim Advisory Agreement Effective Date, Martindale is entitled to the
compensation held in the interest-bearing escrow account (including interest
earned) with respect to that Fund. If the shareholders of a Governor Fund do
not approve a new investment advisory agreement with Martindale within that
time period, the Interim Advisory Agreement provides that Martindale is
entitled to be paid, out of the interest-bearing escrow account, the lesser
of the total amount held in the interest-bearing escrow account (plus
interest earned on that amount) or any costs incurred by Martindale in
performing its duties under the Interim Advisory Agreement prior to its
termination (plus interest earned on the amount while in the interest-bearing
escrow account).
NEW ADVISORY AGREEMENT
At the September 14, 2000 meeting, the Board also approved a New
Advisory Agreement with Martindale. The New Advisory Agreement is identical
in all material respects to the Previous Advisory Agreement, including the
rate of investment advisory fee, except for its effective and termination
dates. Specifically, the New Advisory Agreement provides for the Agreement
to become effective, as to a Governor Fund, on the date the shareholders of
that Governor Fund approve the New Advisory Agreement. As to each Governor
Fund, if approved by shareholders, the New Advisory Agreement would remain in
effect until the earlier of June 30, 2001, or until the Closing of the
Reorganization (currently anticipated to occur on or about December 18,
2000), unless otherwise terminated.
As noted above and in accordance with Rule 15a-4 under the 1940 Act,
shareholder approval of the New Advisory Agreement is necessary in order for
Martindale to receive the amount of the investment advisory fee it would have
otherwise received under the Previous Advisory Agreement for managing each
Governor Fund under the Interim Advisory Agreement from the date the Previous
Advisory Agreement terminated until the New Advisory Agreement is approved by
shareholders. The rate of investment advisory fee under both the Interim
Advisory Agreement and New Advisory Agreement is identical to the rate of
advisory fee under the Previous Advisory Agreement. As to each Governor
Fund, approval of the New Advisory Agreement would also permit Martindale to
continue to serve as investment adviser until consummation of the
Reorganization of that Fund.
If shareholders of a Governor Fund do not approve the New Advisory
Agreement, Martindale will be entitled to receive the lesser of the total
amount held in the interest-bearing escrow account (plus interest earned) or
any costs it incurred in performing the Interim Advisory Agreement prior to
its termination (plus interest earned on that amount while in the
interest-bearing escrow account), on behalf of that Governor Fund. Such
amount will be released to Martindale from the interest-bearing escrow
account. Any excess monies held in the interest-bearing escrow account will
be returned to the relevant Governor Fund.
As to a particular Governor Fund, if shareholders do not approve the
New Advisory Agreement, the Board of Trustees of the Governor Funds will take
appropriate action with respect to that Fund's investment advisory
arrangements.
BOARD CONSIDERATIONS
In determining whether to approve the Interim Advisory Agreement and
New Advisory Agreement with Martindale, the Board of Trustees, including a
majority of the Independent Trustees, of the Governor Funds, determined that
the scope and quality of services to be provided under both the Interim
Advisory Agreement and the New Advisory Agreement were at least equivalent to
those provided under the Previous Advisory Agreement. In addition, the Board
was advised that it was not anticipated that there would be changes in the
personnel who provide the portfolio management services to the Governor Funds
during the terms of both the Interim Advisory Agreement and the New Advisory
Agreement. The Board considered the fact that there were no material
differences between the terms and conditions of the Interim Advisory
Agreement and New Advisory Agreement and the Previous Advisory Agreement,
other than the dates of effectiveness and termination provisions and, with
respect to the Interim Advisory Agreement, the escrow provisions and other
terms required by Rule 15a-4. The Board of Trustees of the Governor Funds
also considered both the Interim Advisory Agreement and New Advisory
Agreement as part of its overall approval of the Plan. The Board considered,
among other things, the factors set forth above under "Information About the
Reorganization - Considerations by the Board of Trustees of the Governor
Funds."
Based upon the considerations set forth above, the Trustees have
determined that the New Advisory Agreement is in the best interest of each
Governor Fund and its shareholders. The Board believes that the Governor
Funds will receive investment advisory services under the New Advisory
Agreement equivalent to those that they received under the Previous Advisory
Agreement, and at the same fee and expense levels.
COMPARISON OF THE PREVIOUS ADVISORY AGREEMENT AND NEW ADVISORY AGREEMENT
ADVISORY SERVICES
The advisory services to be provided by Martindale under the New
Advisory Agreement are identical to those provided by Martindale under the
Previous Advisory Agreement. Under the Previous Advisory Agreement and New
Advisory Agreement, Martindale is to provide a continuous investment program
for each of the Governor Funds, including investment research and management
with respect to all securities and investments and cash equivalents in the
Funds, subject to the supervision of the Board of Trustees of the Governor
Funds. Under both the Previous Advisory Agreement and New Advisory
Agreement, Martindale is to determine from time to time what securities and
other investments are to be purchased, retained or sold with respect to the
Governor Funds and is to implement such determinations through the placement
of orders for the execution of portfolio transactions with or through brokers
or dealers as it may select. Martindale is to provide the services under
both the Previous Advisory Agreement and New Advisory Agreement in accordance
with each Governor Fund's investment objectives, policies and restrictions,
as stated in the current prospectus of the Governor Funds and resolutions of
the Board of Trustees of the Governor Funds.
Under both the Previous Advisory Agreement and New Advisory Agreement,
Martindale is to maintain all books and records with respect to the
securities transactions of the Governor Funds and is to furnish the Board of
Trustees such periodic and special reports as the Board may request. The
Previous Advisory Agreement and the New Advisory Agreement also provide that,
in making investment recommendations for the Governor Funds, Martindale's
personnel will not inquire or take into consideration whether the issuers of
securities proposed for purchase or sale for the account of the Governor
Funds are customers of Martindale or of its parents, subsidiaries or
affiliates. In dealing with such customers, Martindale and its parents,
subsidiaries, and affiliates will not inquire or take into consideration
whether securities of those customers are held by the Governor Funds.
SUB-ADVISERS
Both the Previous Advisory Agreement and New Advisory Agreement provide
that Martindale may from time to time employ or associate with itself such
person or persons as Martindale believes to be fitted to assist it in the
performance of the Agreement (each a "Sub-Adviser"); provided, however, that
the compensation of such persons or persons shall be paid by Martindale and
that Martindale shall be as fully responsible to the Governor Funds for the
acts and omissions of any such person as it is for its own acts and
omissions; and provided further, that the retention of any Sub-Adviser shall
be approved as may be required by the 1940 Act. In the event that any
Sub-Adviser appointed hereunder is terminated, Martindale may provide
investment advisory services pursuant to the relevant Agreement to the
Governor Funds without further shareholder approval.
FEES
The rate of investment advisory fees payable under the New Advisory
Agreement by each Governor Fund is equal to the rate for such Fund payable
under the Previous Advisory Agreement. See "Comparison of Operations -
Investment Advisory Agreements" in Proposal 1 for a recital of those fees.
PAYMENT OF EXPENSES
Under both the Previous Advisory Agreement and the New Advisory
Agreement, Martindale is to pay all expenses incurred by it in connection
with its activities under the relevant Agreement, other than the cost of
securities (including brokerage commissions, if any) purchased for the
Governor Funds.
BROKERAGE
Under the Previous Advisory Agreement, Martindale agreed to place
orders pursuant to its investment determinations for the Governor Funds
either directly with the issuer or with any broker or dealer. In placing
orders with brokers and dealers, Martindale was to attempt to obtain prompt
execution of orders in an effective manner at the most favorable price. In
assessing the best execution available for any transaction, Martindale was
required to consider all factors it deemed relevant, including the breadth of
the market in the security, the price of the security, the financial
condition and execution capability of the broker-dealer and the
reasonableness of the commission, if any (for the specific transaction and on
a continuing basis). Consistent with this obligation, Martindale was
permitted, in its discretion and to the extent permitted by law, to purchase
and sell portfolio securities to and from brokers and dealers who provided
brokerage and research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934) to or for the benefit of the Governor Funds
and/or other accounts over which Martindale exercised investment discretion.
Subject to the review of the Board of Trustees from time to time with respect
to the extent and continuation of the policy, Martindale was authorized to
pay a broker or dealer who provided such brokerage and research services a
commission for effecting a securities transaction for any of the Governor
Funds that was in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, Martindale
determined in good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the overall
responsibilities of Martindale with respect to the accounts as to which it
exercised investment discretion.
In placing orders with brokers and dealers, consistent with applicable
laws, rules and regulations, Martindale was permitted to consider the sale of
shares of the Governor Funds. Except as otherwise permitted by applicable
laws, rules and regulations, in no instance were portfolio securities to be
purchased from or sold to BISYS, Martindale or any affiliated person of the
Governor Funds, BISYS or Martindale. In executing portfolio transactions for
any Governor Fund, Martindale was permitted, but was not obligated to, to the
extent permitted by applicable laws and regulations, aggregate the securities
to be sold or purchased with those of other Governor Funds and its other
clients where such aggregation was not inconsistent with the policies set
forth in the Governor Funds' registration statement. In such event,
Martindale was to allocate the securities so purchased or sold, and the
expenses incurred in the transaction, pursuant to any applicable law or
regulation and in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Governor Funds and such
other clients.
The New Advisory Agreement contains identical provisions.
LIMITATION OF LIABILITY
The Previous Advisory Agreement provided that Martindale shall not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Governor Funds in connection with the performance of the Agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Martindale in the
performance of its duties or from reckless disregard by it of its obligations
and duties under the Agreement.
The New Advisory Agreement contains an identical provision.
CONTINUANCE
As to a particular Governor Fund, if approved by shareholders at the
Special Meeting, the New Advisory Agreement would continue until June 30,
2001, unless terminated. The New Advisory Agreement may be continued from
year to year thereafter as to a particular Governor Fund by a majority vote
of the Board of Trustees of the Governor Funds, including a majority of the
Independent Trustees, cast in person at a meeting called for that purpose, or
by a vote of a majority of all votes attributable to the outstanding shares
of that Fund. The New Advisory Agreement provides that, with respect to a
particular Governor Fund, it will immediately terminate upon consummation of
the Reorganization of that Governor Fund.
TERMINATION
The Previous Advisory Agreement provided that it may be terminated as
to a particular Governor Fund at any time on 60 days' written notice to the
other party, without the payment of any penalty, by the Governor Funds (by
vote of the Board of Trustees of the Governor Funds or by vote of a majority
of the outstanding voting securities of such Governor Fund) or by
Martindale. The Previous Advisory Agreement also provided that it would
immediately terminate in the event of its assignment.
The New Advisory Agreement contains identical termination provisions
and, in addition, provides that, as to a particular Governor Fund, it will
immediately terminate upon consummation of the Reorganization of that
Governor Fund.
The Previous Advisory Agreement was dated November 16, 1998, and
continuance of the Previous Advisory Agreement was most recently approved by
the Trustees, including a majority of the Independent Trustees, with respect
to each Governor Fund, on May 4, 2000. BISYS, as the initial shareholder of
each Governor Fund, approved the Previous Advisory Agreement for each
Governor Fund prior to the Fund's commencement of operations on February 1,
1999.
ADDITIONAL INFORMATION REGARDING MARTINDALE
Prior to May 31, 2000, Governors Group Advisors, Inc. ("Governors
Group"), a wholly-owned subsidiary of Keystone, served as the investment
adviser to each Governor Fund and Martindale (formerly Martindale Andres &
Company, Inc.) served as the sub-adviser to each Governor Fund, except the
International Equity Fund. On May 31, 2000, Governors Group was reorganized
into Martindale, with no resulting change of actual control or management.
The reorganization of Governors Group resulted in Martindale assuming all of
the obligations and responsibilities of Governors Group under the Previous
Advisory Agreement with each Governor Fund and, with respect to the
International Equity Fund, under the investment sub-advisory agreement with
Brinson.
Listed below is the name and principal occupation of the principal
executive officer and each director of Martindale. The address of the
principal executive officer and each director is the offices of Martindale at
Four Falls Corporate Center, Suite 2000, West Conshohocken, Pennsylvania
19428.
NAME TITLE PRINCIPAL OCCUPATION
William F. Dwyer President, Chief Director, President and
Executive Officer and Chief Executive Officer
Director of Martindale; and Chief
Investment Officer of
M&T Bank
Mark J. Czarnecki Director Director and Chairman of
the Board of Directors
of Martindale; and
Division Head of
Investment Area of M&T
Bank
William C. Martindale, Director Director and Vice
Jr. Chairman of the Board of
Directors of Martindale
Janice T. Lessman Director Director of Martindale;
and Senior Pennsylvania
Account Servicing Head
of the Trust and
Investment Division of
M&T Bank
Alan R. Teraji Director Director of Martindale;
and Senior Manager of
Institutional Services
of the Investment Group
of M&T Bank
For the fiscal year ended June 30, 2000, Martindale earned and
voluntarily waived the amounts indicated below with respect to the
sub-advisory services it provided to the Governor Funds pursuant to its
sub-advisory agreement with Governors Group and the investment advisory
services it provided pursuant to the Previous Advisory Agreement:
-------------------------------------------------------------------------------
FISCAL YEAR ENDED
GOVERNOR FUND JUNE 30, 2000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
FEES EARNED FEES WAIVED
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Aggressive Growth Fund $1,191,144 $357,342
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Established Growth Fund 1,669,608 333,924
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Intermediate Term Income Fund 1,710,672 855,336
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
International Equity Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Conservative Growth Fund 230 148
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Growth Fund 728 538
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Moderate Growth Fund 848 575
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Limited Duration Government Securities Fund 345,946 172,973
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Pennsylvania Municipal Bond Fund 600,219 300,110
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Prime Money Market Fund 1,191,581 595,791
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
U.S. Treasury Obligations Money Market Fund 83,746 41,873
-------------------------------------------------------------------------------
For the fiscal period from July 1, 1999 through May 30, 2000, Governors
Group, the investment adviser to the Governor Funds prior to May 31, 2000,
earned and voluntarily waived the amounts indicated below with respect to its
investment advisory services:
-------------------------------------------------------------------------------
GOVERNOR FUND FISCAL PERIOD FROM
JULY 1, 1999 THROUGH MAY 30, 2000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
FEES EARNED FEES WAIVED
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Aggressive Growth Fund $177,848 $53,354
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Established Growth Fund 297,799 59,560
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Intermediate Term Income Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
International Equity Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Conservative Growth Fund 337 174
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Growth Fund 909 529
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Moderate Growth Fund 1,201 654
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Limited Duration Government Securities Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Pennsylvania Municipal Bond Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Prime Money Market Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
U.S. Treasury Obligations Money Market Fund 0 0
-------------------------------------------------------------------------------
For the fiscal year ended June 30, 2000, Martindale earned and
voluntarily waived the amounts indicated below with respect to the
co-administrative services it provided (together with BISYS, whose fees are
not included in the table below) to the Governor Funds pursuant to the
Administration Agreement.
-------------------------------------------------------------------------------
GOVERNOR FUND FISCAL YEAR ENDED
JUNE 30, 2000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
FEES EARNED FEES WAIVED
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Aggressive Growth Fund $26,785 $6,250
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Established Growth Fund 51,324 11,976
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Intermediate Term Income Fund 55,783 13,016
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
International Equity Fund 8,250 1,925
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Conservative Growth Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Growth Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Moderate Growth Fund 0 0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Limited Duration Government Securities Fund 11,281 2,632
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Pennsylvania Municipal Bond Fund 19,573 4,567
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Prime Money Market Fund 58,284 13,600
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
U.S. Treasury Obligations Money Market Fund 4,096 956
-------------------------------------------------------------------------------
PROPOSAL 3: APPROVAL OF NEW SUB-ADVISORY AGREEMENT WITH BRINSON
(INTERNATIONAL EQUITY FUND SHAREHOLDERS ONLY)
INTRODUCTION
At the Special Meeting, shareholders of the International Equity Fund
will be asked to approve a New Sub-Advisory Agreement with Brinson, which is
being submitted in connection with the Bank Merger between Keystone and M&T
Corp. on October 6, 2000. Consummation of the Bank Merger caused a change in
the ownership of Martindale, which automatically terminated the Previous
Advisory Agreement then in effect between Martindale and the Governor Funds
in accordance with its terms and as required by the 1940 Act. In turn, the
investment sub-advisory agreement then in effect between Martindale and
Brinson, relating to the management of the International Equity Fund
("Previous Sub-Advisory Agreement"), automatically terminated in accordance
with its terms. There has been no change in ownership of Brinson. As
discussed below, since the termination of the Previous Sub-Advisory
Agreement, Brinson has been providing sub-advisory services to the
International Equity Fund under the terms of an interim investment
sub-advisory agreement with Martindale.
INTERIM SUB-ADVISORY AGREEMENT
To assure the continued supervision of the investments of the
International Equity Fund after the Bank Merger and the resulting termination
of the Previous Sub-Advisory Agreement, the Board of Trustees (including a
majority of the Independent Trustees) approved an interim investment
sub-advisory agreement between Martindale and Brinson pursuant to Rule 15a-4
under the 1940 Act ("Interim Sub-Advisory Agreement") at an in-person meeting
of the Board of Trustees of the Governor Funds held on September 14, 2000.
As required by Rule 15a-4, the terms and conditions of the Interim
Sub-Advisory Agreement are identical in all material respects to the Previous
Sub-Advisory Agreement, including the rate of sub-advisory fee, except for
its dates of effectiveness and termination and escrow provisions and other
terms required by Rule 15a-4. Since the date of the Bank Merger, Brinson has
provided sub-advisory services to the International Equity Fund under the
Interim Sub-Advisory Agreement.
The Interim Sub-Advisory Agreement became effective on the date of the
Bank Merger (October 6, 2000) ("Interim Sub-Advisory Agreement Effective
Date") and will terminate the earlier of 150 days from the Interim
Sub-Advisory Agreement Effective Date or upon approval of a new investment
sub-advisory agreement between Brinson and Martindale by the International
Equity Fund shareholders. The Interim Sub-Advisory Agreement also provides
that the Board of Trustees of the Governor Funds or a majority of the
International Equity Fund's outstanding voting securities, as that term is
defined in the 1940 Act, may terminate the Interim Sub-Advisory Agreement on
10 calendar days' written notice to Brinson or Martindale. The Interim
Sub-Advisory Agreement terminates in the event of an assignment as that term
is defined in the 1940 Act. The Previous Sub-Advisory Agreement provided for
its termination in the event of the termination of the Previous Advisory
Agreement between Martindale and the Governor Funds; the Interim Sub-Advisory
Agreement contains a comparable provision in the event of the termination of
the Interim Advisory Agreement between Martindale and the Governor Funds.
Pursuant to the terms of the Interim Sub-Advisory Agreement, the
maximum amount of compensation payable to Brinson during this interim period
is no greater than that which would have been payable to Brinson under the
Previous Sub-Advisory Agreement. The compensation to be paid to Brinson
under the Interim Sub-Advisory Agreement is being held in an interest-bearing
escrow account with State Street.
In accordance with the provisions of Rule 15a-4, the Interim
Sub-Advisory Agreement also provides that, if the International Equity Fund
shareholders approve a new investment sub-advisory agreement between Brinson
and Martindale no later than 150 days from the Interim Sub-Advisory Agreement
Effective Date, Brinson is entitled to the compensation held in the
interest-bearing escrow account (including interest earned on that amount).
If the International Equity Fund shareholders do not approve a new investment
sub-advisory agreement between Brinson and Martindale within that time
period, the Interim Sub-Advisory Agreement provides that Brinson is entitled
to be paid, out of the interest-bearing escrow account, the lesser of the
total amount held in the interest-bearing escrow account (plus interest
earned on that amount) or any costs incurred by Brinson in performing its
duties under the Interim Sub-Advisory Agreement prior to its termination
(plus interest earned on the amount while in the interest-bearing escrow
account).
NEW SUB-ADVISORY AGREEMENT
At the September 14, 2000 meeting, the Board also approved a New
Sub-Advisory Agreement between Martindale and Brinson. The New Sub-Advisory
Agreement is identical in all material respects to the Previous Sub-Advisory
Agreement, including the rate of sub-advisory fee, except for its effective
and termination dates. Specifically, the New Sub-Advisory Agreement provides
for the Agreement to become effective on the date the shareholders of the
International Equity Fund approve the New Sub-Advisory Agreement and would
remain in effect until the earlier of June 30, 2001, or until the Closing of
the Reorganization as to the International Equity Fund (currently anticipated
to occur on or about December 18, 2000), unless otherwise terminated.
As noted above and in accordance with Rule 15a-4 under the 1940 Act,
shareholder approval of the New Sub-Advisory Agreement is necessary in order
for Brinson to receive the amount of the sub-advisory fee it would have
otherwise received under the Previous Sub-Advisory Agreement for managing the
International Equity Fund under the Interim Sub-Advisory Agreement from the
date the Previous Sub-Advisory Agreement terminated until the New
Sub-Advisory Agreement is approved by shareholders of the International
Equity Fund. The rate of sub-advisory fee under both the New Sub-Advisory
Agreement and Interim Sub-Advisory Agreement is identical to the rate of
sub-advisory fee under the Previous Sub-Advisory Agreement. Approval of the
New Sub-Advisory Agreement would also permit Brinson to continue to serve as
sub-adviser to the International Equity Fund until consummation of the
Reorganization of that Fund.
If shareholders of the International Equity Fund do not approve the New
Sub-Advisory Agreement, Brinson will be entitled to receive from Martindale
the lesser of the total amount held in the interest-bearing escrow account
(plus interest earned) or any costs Brinson incurred in performing the
Interim Sub-Advisory Agreement prior to its termination (plus interest earned
on that amount while in the interest-bearing escrow account), on behalf of
the International Equity Fund. Such amount will be released to Brinson from
the interest-bearing escrow account. Any excess monies held in the
interest-bearing escrow account will be returned to the International Equity
Fund.
If the shareholders of the International Equity Fund do not approve the
New Sub-Advisory Agreement, the Board of Trustees of the Governor Funds will
take appropriate action with respect to the Fund's sub-advisory arrangements.
BOARD CONSIDERATIONS
In determining whether to approve the Interim Sub-Advisory Agreement
and New Sub-Advisory Agreement, the Board of Trustees, including a majority
of the Independent Trustees, of the Governor Funds, determined that the scope
and quality of services to be provided under both the Interim Sub-Advisory
Agreement and the New Sub-Advisory Agreement were at least equivalent to
those provided under the Previous Sub-Advisory Agreement. In addition, the
Board was advised that there would be no changes in the personnel who provide
the investment advisory services to the International Equity Fund during the
terms of both the Interim Sub-Advisory Agreement and the New Sub-Advisory
Agreement. The Board considered the fact that there were no material
differences between the terms and conditions of the Interim Sub-Advisory
Agreement and the New Sub-Advisory Agreement and the Previous Sub-Advisory
Agreement, other than the dates of effectiveness and termination provisions
and, with respect to the Interim Sub-Advisory Agreement, the escrow
provisions and other terms required by Rule 15a-4. The Board of Trustees of
the Governor Funds also considered both the Interim Sub-Advisory Agreement
and New Sub-Advisory Agreement as part of its overall approval of the Plan.
The Board considered, among other things, the factors set forth above under
"Information About the Reorganization - Considerations by the Board of
Trustees of the Governor Funds."
Based upon the considerations set forth above, the Trustees have
determined that the New Sub-Advisory Agreement is in the best interest of the
International Equity Fund and its shareholders. The Board believes that the
International Equity Fund will receive sub-advisory services under the New
Sub-Advisory Agreement equivalent to those that they received under the
Previous Sub-Advisory Agreement, and at the same fee and expense levels.
COMPARISON OF THE PREVIOUS SUB-ADVISORY AGREEMENT
AND NEW SUB-ADVISORY AGREEMENT
SUB-ADVISORY SERVICES
The sub-advisory services to be provided by Brinson under the New
Sub-Advisory Agreement are identical to those provided by Brinson under the
Previous Sub-Advisory Agreement. Under the Previous Sub-Advisory Agreement
and New Sub-Advisory Agreement, Brinson is to provide a continuous investment
program for the International Equity Fund, including investment research and
management with respect to all securities and investments and cash
equivalents in the Fund, subject to the supervision of Martindale and the
Board of Trustees of the Governor Funds. Under both the Previous
Sub-Advisory Agreement and New Sub-Advisory Agreement, Brinson is to
determine from time to time what securities and other investments are to be
purchased, retained or sold with respect to the International Equity Fund and
is to implement such determinations through the placement of orders for the
execution of portfolio transactions with or through brokers or dealers as it
may select. Brinson is to provide the services under both the Previous
Sub-Advisory Agreement and New Sub-Advisory Agreement in accordance with the
International Equity Fund's investment objectives, policies and restrictions,
as stated in its current prospectus and resolutions of the Board of Trustees
of the Governor Funds.
Under both the Previous Sub-Advisory Agreement and New Sub-Advisory
Agreement, Brinson is to maintain all books and records with respect to the
securities transactions of the International Equity Fund and is to furnish
Martindale and the Board of Trustees such periodic and special reports as
Martindale and the Board may request. The Previous Sub-Advisory Agreement
and the New Sub-Advisory Agreement also provide that, in making investment
recommendations for the International Equity Fund, Brinson's personnel will
not inquire or take into consideration whether the issuers of securities
proposed for purchase or sale for the account of the International Equity
Fund are customers of Brinson or of its parents, subsidiaries or affiliates.
In dealing with such customers, Brinson and its parents, subsidiaries, and
affiliates will not inquire or take into consideration whether securities of
those customers are held by the Governor Funds.
FEES
The Previous Sub-Advisory Agreement and the New Sub-Advisory Agreement
provide that Martindale will pay Brinson an annual fee based on the average
daily net assets of the International Equity Fund as follows: 0.40% of the
first $50 million of the Fund's average daily net assets; 0.35% of the next
$150 million of the Fund's average daily net assets; and 0.30% of the Fund's
average daily net assets in excess of $200 million. The fee arrangement
between Martindale and Brinson is identical in the Previous Sub-Advisory
Agreement and the New Sub-Advisory Agreement.
PAYMENT OF EXPENSES
Under both the Previous Sub-Advisory Agreement and the New Sub-Advisory
Agreement, Brinson is to pay all expenses incurred by it in connection with
its activities under the relevant Agreement, other than the cost of
securities (including brokerage commissions, if any) purchased for the
International Equity Fund.
BROKERAGE
Under the Previous Sub-Advisory Agreement, Brinson agreed to place
orders pursuant to its investment determinations for the International Equity
Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, Brinson was to attempt to obtain
prompt execution of orders in an effective manner at the most favorable
price. In assessing the best execution available for any transaction,
Brinson was required to consider all factors it deemed relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker-dealer and the
reasonableness of the commission, if any (for the specific transaction and on
a continuing basis). Consistent with this obligation, Brinson was permitted,
in its discretion and to the extent permitted by law, to purchase and sell
portfolio securities to and from brokers and dealers who provided brokerage
and research services (within the meaning of Section 28(e) of the Securities
Exchange Act of 1934) to or for the benefit of the International Equity Fund
and/or other accounts over which Brinson exercised investment discretion.
Subject to the review of Martindale and the Board of Trustees from time to
time with respect to the extent and continuation of the policy, Brinson was
authorized to pay a broker or dealer who provided such brokerage and research
services a commission for effecting a securities transaction for the
International Equity Fund that was in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction
if, but only if, Brinson determined in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of Brinson with respect to the
accounts as to which it exercised investment discretion.
In placing orders with brokers and dealers, consistent with applicable
laws, rules and regulations, Brinson was permitted to consider the sale of
shares of the International Equity Fund. Except as otherwise permitted by
applicable laws, rules and regulations, in no instance were portfolio
securities to be purchased from or sold to BISYS, Martindale, Brinson or any
affiliated person of the Governor Funds, BISYS, Martindale or Brinson. In
executing portfolio transactions for the International Equity Fund, Brinson
was permitted, but was not obligated to, to the extent permitted by
applicable laws and regulations, aggregate the securities to be sold or
purchased with those of other Governor Funds and its other clients where such
aggregation was not inconsistent with the policies set forth in the Governor
Funds' registration statement. In such event, Brinson was to allocate the
securities so purchased or sold, and the expenses incurred in the
transaction, pursuant to any applicable law or regulation and in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Governor Funds and such other clients.
The New Sub-Advisory Agreement contains identical provisions.
LIMITATION OF LIABILITY
The Previous Sub-Advisory Agreement provided that Brinson shall not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Governor Funds or Martindale in connection with the performance of the
Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Brinson in
the performance of its duties or from reckless disregard by it of its
obligations and duties under the Agreement.
The New Sub-Advisory Agreement contains an identical provision.
CONTINUANCE
If approved by shareholders of the International Equity Fund at the
Special Meeting, the New Sub-Advisory Agreement would continue until June 30,
2001, unless terminated. The New Sub-Advisory Agreement may be continued
from year to year thereafter by a majority vote of the Board of Trustees of
the Governor Funds, including a majority of the Independent Trustees, cast in
person at a meeting called for that purpose, or by a vote of a majority of
all votes attributable to the outstanding shares of the International Equity
Fund. The New Sub-Advisory Agreement provides that it will immediately
terminate upon consummation of the Reorganization of the International Equity
Fund.
TERMINATION
The Previous Sub-Advisory Agreement provided that it may be terminated
at any time on 60 days' written notice to the other party, without the
payment of any penalty, by Martindale or the Governor Funds (by vote of the
Board of Trustees of the Governor Funds or by vote of a majority of the
outstanding voting securities of the International Equity Fund) or by
Brinson.
The New Sub-Advisory Agreement contains an identical provision.
The Previous Sub-Advisory Agreement also provided that it would
immediately terminate in the event of its assignment and in the event of the
termination of the Previous Advisory Agreement.
The New Sub-Advisory Agreement provides that it will immediately
terminate: (1) in the event of its assignment; (2) upon consummation of the
Reorganization of the International Equity Fund; and (3) in the event of the
termination of the investment advisory agreement with Martindale then in
effect.
The Previous Sub-Advisory Agreement was dated November 16, 1998, and
continuance of the Previous Sub-Advisory Agreement was most recently approved
by the Trustees, including a majority of the Independent Trustees, on May 4,
2000. BISYS, as the initial shareholder of the International Equity Fund,
approved the Previous Sub-Advisory Agreement prior to the Fund's commencement
of operations on February 1, 1999.
ADDITIONAL INFORMATION REGARDING BRINSON
Brinson has served as the sub-adviser to the International Equity Fund
since November 16, 1998. Listed below is the name and principal occupation
of the principal executive officer and each director of Brinson. The address
of the principal executive officer and each director is the offices of
Brinson at 209 South LaSalle Street, Chicago, Illinois 60604.
NAME TITLE PRINCIPAL OCCUPATION
---- ----- --------------------
Benjamin F. Lenhardt, Jr. President, Chief Director, President, Chief
Executive Officer Executive Officer and
and Director Managing Director of Brinson
Gary P. Brinson Director Director, Chairman of the
Board of Directors and
Managing Director of Brinson
Jeffrey J. Diermeier Director Director, Chief Investment
Officer and Managing Director
of Brinson
Nicholas C. Rassas Director Director, Vice President and
Managing Director of Brinson
For the fiscal year ended June 30, 2000, Brinson earned $168,658 with
respect to its sub-investment advisory services pursuant to the Previous
Sub-Advisory Agreement.
Brinson acts as investment adviser to the following series of The
Brinson Funds, a registered investment company with a similar investment
objective to the International Equity Fund and Vision International Equity
Fund:
RATE OF
MANAGEMENT FEE
PAYABLE TO AMOUNT OF
BRINSON ON WAIVER AND/OR
NET ASSETS AS AVERAGE DAILY EXPENSE
NAME OF BRINSON SERIES OF JUNE 30, 2000 NET ASSSETS REIMBURSEMENT*
---------------------- ---------------- ----------- -------------
International Equity Fund $417,804,545 0.80% 1.00%
-----------------
* Brinson has irrevocably agreed to waive its fees and reimburse certain
expenses so that the total operating expenses of the International Equity
Fund do not exceed 1.00%.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Trustees of the Governor Funds of proxies for
use at the Special Meeting to be held on December 13, 2000 at 2:00 p.m.,
Eastern Time at the principal offices of the Governor Funds, 3435 Stelzer
Road, Columbus Ohio 43218, and at any adjournments thereof. The proxy
confers discretionary authority on the persons designated therein to vote on
other business not currently contemplated that may properly come before the
Special Meeting. A proxy, if properly executed, duly returned and not
revoked, will be voted in accordance with the specifications thereon; if no
instructions are given, such proxy will be voted in favor of the Plan. A
shareholder may revoke a proxy at any time prior to use by filing with the
Secretary of the Governor Funds an instrument revoking the proxy, by
submitting a proxy bearing a later date or by attending and voting at the
Special Meeting.
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by M&T Bank or one of its affiliates, and not
by the Governor Funds or the Vision Funds. In addition to solicitations
through the mails, proxies may be solicited by officers, employees and agents
of the Governor Funds and M&T Bank. Such solicitations may be by telephone,
telegraph or personal contact. M&T Bank or one of its affiliates will
reimburse custodians, nominees and fiduciaries for the reasonable costs
incurred by them in connection with forwarding solicitation materials to the
beneficial owners of shares held of record by such persons.
You may vote by completing and signing the enclosed proxy card(s) and
mailing them in the enclosed postage paid envelope. You may also vote your
shares by phone at 1-800-690-6903. Internet voting is also available at
www.proxyvote.com. Neither the Governor Funds nor its shareholders will bear
the costs for this proxy solicitation. If votes are recorded by telephone,
the Governor Funds or its agents will use procedures designed to authenticate
shareholders' identities, to allow shareholders to authorize the voting of
their shares in accordance with their instructions, and to confirm that a
shareholder's instructions have been properly recorded.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Trustees of the Governor Funds has fixed the close of
business on October 16, 2000, as the record date for the determination of
shareholders of the Governor Funds entitled to notice of and to vote at the
Special Meeting and any adjournments thereof. Holders of the S Shares class
of the Prime Money Market Fund are entitled to notice of, but not entitled to
vote on, the Reorganization since the Board of the Governor Funds determined
at a meeting held on October 27, 2000 to liquidate the S Shares class of the
Fund on December 1, 2000. The S Shares will not be counted as outstanding
shares of the Prime Money Market Fund for purposes of determining a quorum.
Each share of a Governor Fund is entitled to one vote and fractional shares
have proportionate voting rights. Only shareholders of record as of the
record date are entitled to vote on the proposal. As of the record date,
each of the Governor Funds had the number of shares issued and outstanding
listed below:
TOTAL SHARES
FUND NAME OUTSTANDING
--------- -----------
Aggressive Growth Fund 11,978,335.397
Established Growth Fund 19,642,158.89
Intermediate Term Income Fund 25,947,321.466
International Equity Fund 3,946,929.089
Lifestyle Conservative Growth Fund 136,310.966
Lifestyle Growth Fund 27,633.046
Lifestyle Moderate Growth Fund 120,081.652
Limited Duration Government Securities Fund 7,435,407.067
Pennsylvania Municipal Bond Fund 9,256,482.174
Prime Money Market Fund (Investor Shares) 189,150,699.27
Prime Money Market Fund (S Shares) 1,462,712.01
U.S. Treasury Obligations Money Market 15,004,877.850
Fund
On the record date, the Trustees and officers of the Governor Funds
individually, and as a group, owned less than 1% of the outstanding shares of
each Governor Fund.
To the best knowledge of the Governor Funds, as of the record date, no
person, except as set forth in the table below, owned beneficially or of
record 5% or more of the outstanding shares of the Investor Shares class of
any Governor Fund.
PERCENT OF
NAME AND ADDRESS OF RECORD OUTSTANDING
NAME OF GOVERNOR FUND AND BENEFICIAL OWNER SHARES
----------------------------- ----------------------------- -----------------
Prime Money Market - National Financial Services 18.1028%
Investor Shares Corp.*
200 Liberty St.
New York, NY 10281
Altru Company** 74.7164%
1315 11th Ave.
Altoona, PA 16601
Prime Money Market - S Robert F. Rubright 7.0967%
Shares Sally A. Rubright
1527 Pottsville Pike
Shoemakersville, PA 19555
Michael J. Hagan*** 27.4147%
Joyce L. Hagan
1629 Clydesdale Cir.
Yardley, PA 19067
20.8623%
Digby D. MacDonald
1010 Greenbriar Dr.
State College, PA 16801
Betty Factor 18.1017%
Marvin Factor
2607 Old Rodgers Rd.
Bristol, PA 19007
Paul M. Metzger 5.8142%
600 Philadelphia Rd.
Joppa, MD 21085
US Treasury Obligations National Financial Services 10.2965%
Money Market Corp.*
200 Liberty St.
New York, NY 10281
Altru Company** 87.0015%
1315 11th Ave.
Altoona, PA 16601
Pennsylvania Municipal Bond Altru Company** 94.9350%
1315 11th Ave.
Altoona, PA 16601
Intermediate Term Income Altru Company** 62.6860%
1315 11th Ave.
Altoona, PA 16601
Altru Company** 36.6428%
1315 11th Ave.
Altoona, PA 16601
Established Growth Altru Company** 50.9818%
1315 11th Ave.
Altoona, PA 16601
Altru Company** 39.6110%
1315 11th Ave.
Altoona, PA 16601
Aggressive Growth Altru Company** 6.0800%
1315 11th Ave.
Altoona, PA 16601
Altru Company** 42.5931%
1315 11th Ave.
Altoona, PA 16601
Altru Company** 45.7868%
1315 11th Ave.
Altoona, PA 16601
Limited Duration Government Altru Company** 80.0701%
Securities 1315 11th Ave.
Altoona, PA 16601
Altru Company** 18.5761%
1315 11th Ave.
Altoona, PA 16601
International Equity Fund Altru Company** 57.0118%
1315 11th Ave.
Altoona, PA 16601
Altru Company** 41.9275%
1315 11th Ave.
Altoona, PA 16601
Lifestyle Conservative Robert Holsinger 10.5919%
Growth Fund 520 Barley St.
Roaring Spring, PA 16673
Earl E. Meily 5.1971%
14 Cardinal Dr.
Milton, PA 17847
IRA Rollover 14.2175%
RR 4 Box 117
Mifflinburg, PA 17844
Thomas P. McIntyre, Sr. 7.0838%
1618 County Street
Laureldale, PA 19605
IRA Rollover 14.2361%
2306 E. Allegheny Ave.
Philadelphia, AP 19134
IRA Rollover 5.8140%
15600 Bank St.
Mt. Savage, MD 21545
Shirley Decker 18.0783%
102 Highlands
Danville, PA 17821
IRA Rollover 8.1908%
3303 Comfort Hill Rd.
Wellsburg, NY 14894
----------------
* Denotes shares held of record only.
** Altru Company is the nominee name for M&T Bank under which M&T Bank holds
shares for the benefit of its trust and/or fiduciary customers. M&T Bank may
or may not exercise investment discretion or have voting authority with
respect to such shares. M&T Bank has voting authority with respect to more
than 25% of the voting securities of each Governor Fund and, therefore, M&T
Bank possesses the ability to control the outcome of matters submitted for a
shareholder vote of the Governor Funds or a particular Governor Fund.
*** Person is deemed to control the class within the meaning of the 1940
Act. Such person possesses the ability to control the outcome of matters
submitted for the vote of shareholders of that class.
As to each Vision Fund, on the record date, the Trustees and officers
of the Vision Group of Funds as a group owned less than 1% of the outstanding
shares of any class of a Vision Fund.
To the best knowledge of the Vision Group of Funds, as of the record
date, no person, except as set forth in the table below, owned beneficially
or of record 5% or more of the outstanding shares of any Vision Fund.
PERCENT OF
NAME OF VISION FUND AND TITLE NAME AND ADDRESS OF RECORD OUTSTANDING
OF CLASS OWNER SHARES
------------------------------- ----------------------------- ---------------
Vision Money Market Fund - Manufacturers & Traders* 6.85%
Class A Tice & Co. , 8th Floor
Attn: TR Dept. Cash Clerk
PO Box 1377
Buffalo, NY 14240-1377
Manufacturers & Traders* 13.47%
Tice & Co., 8th Floor
Attn: TR Dept. Cash Mgmt.
Clerk
PO Box 1377
Buffalo, NY 14240-1377
National Financial Services 9.35%
Co. for the Exclusive
Benefit of Our Customers
PO Box 3752
Church Street Station
New York, NY 10008-3752
Vision Treasury Money Market Manufacturers & Traders* 76.87%
Fund - Class A Tice & Co., 8th Floor
Attn: TR Dept. Cash Mgmt.
Clerk
PO Box 1377
Buffalo, NY 14240-1377
Vision NY Tax-Free Money Manufacturers & Traders TR 15.62%
Market Fund Co.*
Tice & Co., 8th Floor
Attn: TR Dept. Cash Mgmt.
Clerk
PO Box 1377
Buffalo, NY 14240-1377
Manufacturers & Traders TR 27.39%
Co.*
Tice & Co., 8th Floor
Attn: TR Dept. Cash Mgmt.
Clerk
PO Box 1377
Buffalo, NY 14240-1377
National Financial Services 20.31%
Co. for the Exclusive
Benefit of Our Customers
PO Box 3752
Church Street Station
New York, NY 10008-3752
Vision Money Market Fund - OSMOSE Inc.** 7.75%
Class S 980 Ellicott St.
Buffalo, NY 14209-2398
Health Solutions Limited** 13.75%
210 Great Oaks Blvd.
Albany, NY 12203-5962
Vision Treasury Money Market University Hill Radiation 5.70%
Fund - Class S Oncology**
Money Advantage Account
60 Presidential Plz.
Syracuse, NY 13203-2292
United Radio Inc.** 5.13%
Money Advantage
2949 Erie Blvd. E
Syracuse, NY 13224-1493
Vision New York Municipal Manufacturers & Traders TR 31.26%
Income FD - Class A Co.*
Krauss & Co.
Attn: Trust Dept.
PO Box 1377
Buffalo, NY 14240-1377
Tice & Co.* 10.17%
c/o Manufacturers & Traders
TR Co.
PO Box 1377
Buffalo, NY 14240-1377
SEI Trust Company* 6.97%
c/o M&T Bank
Attn: Mutual Fund
Administrator
One Freedom Valley Drive
Oaks, PA 19456
Vision US Government Krauss & Company* 28.97%
Securities Fund - Class A c/o Manufacturers & Traders
TR Co.
PO Box 1377
Buffalo, NY 14240-1377
Tice & Co.* 14.73%
c/o Manufacturers & Traders
TR Co.
PO Box 1377
Buffalo, NY 14240-1377
Manufacturers and Traders 11.58%
Bank*
REHO & Co.
Attn: Trust Dept.
PO Box 1377
Buffalo, NY 14240-1377
SEI Trust Company* 18.27%
c/o M&T Bank
Attn: Mutual Fund
Administrator
One Freedom Valley Drive
Oaks, PA 19456
8.49%
SEI Trust Company*
c/o M&T Investment Group
One Freedom Valley Dr.
Oaks, PA 19456
Vision Large Cap Value Fund - Tice & Co.* 16.80%
Class A c/o Manufacturers & Traders
TR Co.
PO Box 1377
Buffalo, NY 14240-1377
Krauss & Company* 11.78%
c/o Manufacturers & Traders
Trust
PO Box 1377
Buffalo, NY 14240-1377
Manufacturers and Traders 5.80%
Bank*
REHO & Co.
Attn: Trust Dept.
PO Box 1377
Buffalo, NY 14240-1377
Manufacturers and Traders 6.59%
Bank*
REHO & Co.
Attn: Trust Dept.
PO Box 1377
Buffalo, NY 14240-1377
SEI Trust Company* 21.93%
c/o M&T Bank
Attn: Mutual Fund
Administrator
One Freedom Valley Drive
Oaks, PA 19456
SEI Trust Company* 10.95%
c/o M&T Investment Group
One Freedom Valley Dr.
Oaks, PA 19456
Vision Large Cap Growth Fund Manufacturers & Traders TR 5.48%
- Class A Co.*
Tice & Co.
Attn: Trust Department
PO Box 1377
Buffalo, NY 14240-1377
Manufacturers & Traders TR 8.67%
Co.*
Tice & Co.
Attn: Trust Department
PO Box 1377
Buffalo, NY 14240-1377
Manufacturers and Traders 78.47%
Bank*
REHO & Co.
Attn: Trust Dept.
PO Box 1377
Buffalo, NY 14240-1377
Vision Large Cap Growth Fund NFSC/FMTC IRA** 6.69%
- Class B FBO Carol Lee Spages
23 Donald Ave.
Newton, NJ 07860-2301
NFSC FEBO** 10.71%
Carol J. McGee
Donald J. McGee
1072 Klem Road
Webster, NY 14580-8601
NFSC FEBO** 5.81%
William Norman Henderson
Teresa E. Henderson
4300 Graham Rd.
Jamesville, NY 13078-9436
Faustino Albano** 9.19%
Carol Albano JTWROS
90 Pine St.
E. Rochester, NY 14445-1349
Michael Buonaccorso C/F** 12.65%
Michael Buonaccorso, Jr.
UTMA NY 21
50 Stone Island Ln.
Penefield, NY 14526-1018
Floyd C. Alles &** 9.19%
Winifred D. Alles JTWROS
3158 Oakmont Rd.
Bloomfield, NY 14469-9704
NFSC FEBO** 15.56%
Herbert K. Levin
PMA Account
18 Kirby Trl.
Fairport, NY 14450-4128
Vision Large Cap Value Fund - NFSC/FMTC Roth IRA** 5.73%
Class B FBO Albert H. Arnold
700 Cooper Rd.
Jordan, NY 13080-9715
NFSC/FMTC IRA Rollover** 9.86%
FBO Basil J. Mancuso
PO Box 11038
Syracuse, NY 13218-1-38
John A. Berra** 11.09%
47 Liddell St.
Buffalo, NY 14212-1823
Linda Fordyce Dehlinger** 6.34%
22 Milton Street
Tonawanda, NY 14150-3926
Mary Ann Rizzo** 42.04%
800 Lebrun
Amherst, NY 14226-4214
Bernice E. Allen** 6.85%
3 Hopkins Rd #5
Liverpool, NY 13088-5739
Robert W. Wode** 13.75%
Mary T. Wode JTWROS
12906 Ontario St.
Irving, NY 14081-9666
Vision Mid Cap Stock Fund - Tice & Co.* 7.13%
Class A c/o Manufacturers & Traders
TR Co.
PO Box 1377
Buffalo, NY 14240-1377
SEI Trust Company* 6.79%
c/o M&T Bank
Attn: Mutual Fund
Administrator
One Freedom Valley Drive
Oaks, PA 19456
SEI Trust Company* 32.16%
c/o M&T Investment Group
One Freedom Valley Dr.
Oaks, PA 19456
Vision Mid Cap Stock Fund - NFSC FEBO** 13.05%
Class B NFSC/FMTC IRA Rollover
FBO Harold L. Thomas
150 Surry Run
Williamsville, NY
14221-3322
NFSC FEBO** 15.07%
M. Cesarie Sasala
2025 Piney Point Rd.
Troy, NY 12180-9505
Barbara Strittmatter** 7.23%
3 Raymond Dr.
Ashley, PA 18706-1731
NFSC FEBO** 7.21%
Herbert I. Levin
PMA Account
18 Kirby Trl.
Fairport, NY 14450-4128
----------------
* Denotes accounts for which M&T Bank holds shares for the benefit of its
trust and/or fiduciary customers. M&T Bank may or may not exercise
investment discretion or have voting authority with respect to such shares.
M&T Bank has voting authority with respect to more than 25% of the voting
securities of each Vision Fund and, therefore, M&T Bank possesses the ability
to control the outcome of matters submitted for a shareholder vote of the
Vision Group of Funds or a particular Vision Fund.
** Denotes beneficial and record owner of shares.
Approval of the Plan with respect to a Governor Fund requires the
affirmative vote, in person or by proxy, of the lower of : (i) more than 50%
of the outstanding voting securities of the Fund; or (ii) 67% or more of the
voting securities of the Fund present at a meeting, if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy ("Majority Vote"). In the event that shareholders of one or more of
the Governor Funds do not approve the Plan, the Reorganization will proceed
with respect to those Governor Funds that have approved the Plan, subject to
certain other conditions being met. The votes of shareholders of the Vision
Funds are not being solicited since their approval is not required in order
to effect the Reorganization.
Approval of the New Advisory Agreement with respect to a Governor Fund
requires a Majority Vote. In the event the shareholders of one or more of
the Governor Funds do not approve the New Advisory Agreement, the New
Advisory Agreement will only be in effect for those Governor Funds that have
approved the New Advisory Agreement.
With respect to the International Equity Fund, approval of the New
Sub-Advisory Agreement requires a Majority Vote.
Shareholders of each Governor Fund will vote separately on Proposals 1
and 2. The International Equity Fund shareholders will vote separately on
Proposal 3. In order for the shareholder meeting to go forward for a Governor
Fund, there must be a quorum. This means that at least one-third of that
Fund's shares entitled to vote must be represented at the meeting -- either
in person or by proxy. All returned proxies count toward a quorum,
regardless of how they are voted. An abstention will be counted as shares
present at the meeting in determining whether a proposal has been approved,
and will have the same effect as a vote "against" the proposal. Broker
non-votes will not be counted as present in calculating the vote on any
proposal. (Broker non-votes are shares for which (a) the underlying owner has
not voted and (b) the broker holding the shares does not have discretionary
authority to vote on the particular matter.) If you sign and date your
proxy, but do not specify instructions, your shares will be voted in favor of
the proposals.
If a quorum is not obtained or if sufficient votes to approve any of
the proposals are not received, the persons named as proxies may propose one
or more adjournments of the meeting to permit further solicitation of
proxies. In determining whether to adjourn the meeting, the following factors
may be considered: the nature of the proposal; the percentage of votes
actually cast; the percentage of negative votes actually cast; the nature of
any further solicitation; and the information to be provided to shareholders
with respect to the reasons for the solicitation. Any adjournment will
require a vote in favor of the adjournment by the holders of a majority of
the shares present in person or by proxy at the meeting (or any adjournment
of the meeting).
OTHER MATTERS
Management of the Governor Funds knows of no other matters that may
properly be, or which are likely to be, brought before the Special Meeting.
However, if any other business shall properly come before the Special
Meeting, the persons named in the proxy intend to vote thereon in accordance
with their best judgment.
Governor Funds is not required, and does not intend, to hold regular
annual meetings of shareholders. Shareholders wishing to submit proposals
for consideration for inclusion in a proxy statement for the next meeting of
shareholders of the Governor Funds (if any) should send their written
proposals to the Governor Funds at 3435 Stelzer Road, Columbus, Ohio 43218,
ATTN: Secretary, so that they are received within a reasonable time before
such meeting.
BOARD RECOMMENDATION
After carefully considering the issues involved, the Board of Trustees
of the Governor Funds has unanimously approved the proposed Reorganization,
the New Advisory Agreement for each Governor Fund, and, with respect to the
International Equity Fund, the New Sub-Advisory Agreement. The Board of
Trustees of the Governor Funds recommends that you vote to approve the Plan,
the New Advisory Agreement and, for shareholders of the International Equity
Fund, the New Sub-Advisory Agreement. Whether or not shareholders expect to
attend the Special Meeting, all shareholders are urged to sign, fill in and
return the enclosed proxy form promptly.
EXHIBITS TO COMBINED PROSPECTUS/PROXY STATEMENT
EXHIBIT
A Form of Agreement and Plan of Reorganization
B Vision Fund Prospectus dated November 8, 2000 (enclosed)
A-19
Doc. #346126 v.08
EXHIBIT A
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, made as of this ____ day of
November, 2000, by and between Vision Group of Funds (the "Trust"), a
business trust created under the laws of the State of Delaware, with its
principal place of business at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7010, and Governor Funds (the "Governor Funds"), a business trust
created under the laws of the State of Delaware, with its principal place of
business at 3435 Stelzer Road, Columbus, Ohio 43218.
PLAN OF REORGANIZATION
The reorganization (hereinafter referred to as the "Plan of
Reorganization") will consist of (i) the acquisition by the Trust on behalf
of the Vision Portfolio (as hereinafter defined) of substantially all of the
property, assets and goodwill of the [ ] Fund series (the
"Governor Portfolio") of the Governor Funds in exchange solely for Class A
shares of beneficial interest, no par value ("Class A Shares"), of the [
] Fund series (the "Vision Portfolio") of the Trust, and the assumption by
the Trust on behalf of the Vision Portfolio of all of the liabilities of the
Governor Portfolio, (ii) the distribution of such shares of beneficial
interest of the Vision Portfolio to the shareholders of the Governor
Portfolio according to their respective interests, and (iii) the dissolution
of the Governor Portfolio as soon as practicable after the closing (as
referenced in Section 3, hereinafter called the "Closing"), all upon and
subject to the terms and conditions of this Agreement hereinafter set forth.
AGREEMENT
In order to consummate the Plan of Reorganization and in consideration
of the premises and of the covenants and agreements hereinafter set forth,
and intending to be legally bound, the parties hereto covenant and agree as
follows:
1. SALE AND TRANSFER OF ASSETS AND LIABILITIES, LIQUIDATION AND
DISSOLUTION
OF THE GOVERNOR
PORTFOLIO
(a) Subject to the terms and conditions of this Agreement, and
in reliance on the representations and warranties of the Trust herein
contained, and in consideration of the delivery by the Trust of the number of
its Class A Shares of beneficial interest of the Vision Portfolio hereinafter
provided, the Governor Funds, on behalf of the Governor Portfolio, agrees
that it will sell, convey, transfer and deliver to the Trust on behalf of the
Vision Portfolio at the Closing provided for in Section 3 all of the
liabilities, debts, obligations and duties of any nature, whether accrued,
absolute, contingent or otherwise ("Liabilities") and the assets of the
Governor Portfolio as of the close of business on the closing date (as
referenced in Section 3, hereinafter called the "Closing Date"), free and
clear of all liens, encumbrances, and claims whatsoever (other than
shareholders' rights of redemption and such restrictions as might arise under
the Securities Act of 1933, as amended (the "1933 Act"), with respect to
privately placed or otherwise restricted securities that the Governor
Portfolio may have acquired in the ordinary course of business), except for
cash, bank deposits, or cash equivalent securities in an estimated amount
necessary (1) to discharge all of the Governor Portfolio's Liabilities on its
books at the close of business on the Closing Date, including, but not
limited to, its income dividends and capital gains distributions, if any,
payable for any period prior to, and through, the close of business on the
Closing Date, and excluding those liabilities and obligations that would
otherwise be discharged at a later date in the ordinary course of business,
and (2) to pay such contingent liabilities as the trustees of the Governor
Funds shall reasonably deem to exist against the Governor Portfolio, if any,
at the close of business on the Closing Date, for which contingent and other
appropriate liability reserves shall be established on the books of the
Governor Portfolio (hereinafter "Net Assets"). The Governor Funds, on behalf
of the Governor Portfolio, shall also retain any and all rights that it may
have over and against any person that may have accrued up to and including
the close of business on the Closing Date. The Governor Funds agree to use
commercially reasonable best efforts to identify all Liabilities prior to the
Closing Date and to discharge all known Liabilities on or prior to the
Closing Date.
(b) Subject to the terms and conditions of this Agreement, and
in reliance on the representations and warranties of the Governor Funds
herein contained, and in consideration of such sale, conveyance, transfer,
and delivery, the Trust agrees at the Closing to assume the Liabilities and
to deliver to the Governor Portfolio the number of Class A Shares of
beneficial interest of the Vision Portfolio, no par value, determined by
dividing the net asset value per share of beneficial interest of the Investor
shares ("Investor Shares") of the Governor Portfolio as of the close of
business on the Closing Date by the net asset value per share of beneficial
interest of the Class A Shares of the Vision Portfolio as of the close of
business on the Closing Date, which net asset value per share shall be
identical to that determined to be the net asset value per share of the
Investor Shares of the Governor Portfolio as of the close of business on the
Closing Date, and multiplying the result by the number of outstanding shares
of the Investor Shares of the Governor Portfolio as of the close of business
on the Closing Date. All such values shall be determined in the manner and
as of the time set forth in Section 2 hereof.
(c) As soon as practicable following the Closing, the Governor
Portfolio shall dissolve and distribute pro rata to its shareholders of
record as of the close of business on the Closing Date the Class A Shares of
beneficial interest of the Vision Portfolio received by the Governor
Portfolio pursuant to this Section 1. Such dissolution and distribution
shall be accomplished by the establishment of accounts on the share records
of the Vision Portfolio of the type and in the amounts due such shareholders
based on their respective holdings of Investor Shares of the Governor
Portfolio as of the close of business on the Closing Date. Fractional shares
of beneficial interest of the Class A Shares of the Vision Portfolio shall be
carried to the third decimal place. No certificates representing Class A
Shares of beneficial interest will be issued to shareholders of the Investor
Shares irrespective of whether such shareholders hold their Investor Shares
in certificated form.
(d) At the Closing, each shareholder of record of the Governor
Portfolio as of the record date (the "Distribution Record Date") with respect
to any unpaid dividends and other distributions that were declared prior to
the Closing, including any dividend or distribution declared pursuant to
Section 9(f) hereof, shall have the right to receive such unpaid dividends
and distributions with respect to the shares of the Governor Portfolio that
such person had on such Distribution Record Date.
2. VALUATION
(a) The value of the Governor Portfolio's Net Assets to be
acquired by the Vision Portfolio hereunder shall be computed as of the close
of business (which shall be deemed to be the close of the New York Stock
Exchange, Inc. ("NYSE")) on the Closing Date using the valuation procedures
set forth in the Governor Portfolio's currently effective prospectus and
statement of additional information.
(b) The net asset value of a share of beneficial interest of
the Class A Shares of the Vision Portfolio shall be identical to the net
asset value per share of the Investor Shares of the Governor Portfolio at the
close of business on the Closing Date, determined as set forth in subsection
(c) of Section 2.
(c) The net asset value of a share of beneficial interest of
the Investor Shares of the Governor Portfolio shall be determined to the
nearest full cent as of the close of business (which shall be deemed to be
the close of the NYSE) on the Closing Date, using the valuation procedures as
set forth in the Governor Portfolio's currently effective prospectus and
statement of additional information.
3. CLOSING AND CLOSING DATE
The Closing Date shall be December 18, 2000, or such later date
as the parties may mutually agree in writing. The Closing shall take place
at the [principal office of the Trust, 5800 Corporate Drive, Pittsburgh,
Pennsylvania 15237-7010] at 9:00 a.m. Eastern Time on the first business day
following the Closing Date. Notwithstanding anything herein to the contrary,
in the event that on the Closing Date, (a) the NYSE shall be closed to
trading or trading thereon shall be restricted or (b) trading or the
reporting of trading on such exchange or elsewhere shall be disrupted so
that, in the judgment of the Trust or Governor Funds, accurate appraisal of
the value of the net assets of the Governor Portfolio or the Vision Portfolio
is impracticable, the Closing Date shall be postponed until the first
business day after the day when trading shall have been fully resumed without
restriction or disruption, reporting shall have been restored and accurate
appraisal of the value of the net assets of the Governor Portfolio and the
Vision Portfolio is practicable in the judgment of the Trust and Governor
Funds. The Governor Funds shall have provided for delivery as of the Closing
of those Net Assets of the Governor Portfolio to be transferred to the
Trust's Custodian, State Street Bank and Trust Company, P.O. Box 8609,
Boston, Massachusetts 02266-8609. Also, the Governor Funds shall deliver at
the Closing a list of names and addresses of the shareholders of record of
the Investor Shares of the Governor Portfolio and the number of Investor
Shares of the Governor Portfolio owned by each such shareholder, indicating
thereon which such shares are represented by outstanding certificates and
which by book-entry accounts, all as of the close of business on the Closing
Date, certified by its transfer agent, or by its President to the best of
their knowledge and belief. The Trust shall issue and deliver a certificate
or certificates evidencing Class A Shares of the Vision Portfolio to be
delivered at the Closing to said transfer agent registered in such manner as
the Governor Funds may request, or provide evidence satisfactory to the
Governor Funds that such shares of beneficial interest of the Class A Shares
of the Vision Portfolio have been registered in an open account on the books
of the Vision Portfolio in such manner as the Governor Funds may request.
4. REPRESENTATIONS AND WARRANTIES BY THE GOVERNOR FUNDS
The Governor Funds represents and warrants to the Trust that:
(a) The Governor Funds is a business trust created under the
laws of the State of Delaware on September 3, 1998, and is validly existing
and in good standing under the laws of that state. The Governor Funds, of
which the Governor Portfolio is a [diversified/non-diversified] separate
series, is duly registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end, management investment company.
Such registration is in full force and effect as of the date hereof and will
be in full force and effect as of the Closing and all of its shares sold have
been sold pursuant to an effective registration statement filed under the
1933 Act, except for any shares sold pursuant to the private offering
exemption for the purpose of raising the required initial capital.
(b) The Governor Funds is authorized to issue an unlimited
number of shares of beneficial interest of the Governor Portfolio, par value
$0.0001 per share. Each outstanding Investor Share is duly and validly
issued, fully paid, non-assessable and has full voting rights and, except for
any shares sold pursuant to the private offering exemption for purposes of
raising initial capital, is fully transferable.
(c) The financial statements appearing in the Governor Funds'
Annual Report to Shareholders for the fiscal year ended June 30, 2000,
audited by KPMG LLP, copies of which have been delivered to the Trust, fairly
present the financial position of the Governor Funds and the Governor
Portfolio as of the date indicated, and the results of its operations for the
period indicated, in conformity with generally accepted accounting principles
applied on a consistent basis.
(d) The books and records of the Governor Portfolio made
available to the Trust and/or its counsel are true and correct in all
material respects and contain no material omissions with respect to the
business and operations of the Governor Portfolio.
(e) The Governor Funds has the necessary power and authority to
conduct its business as such business is now being conducted.
(f) The Governor Funds is not a party to or obligated under any
provision of its Agreement and Declaration of Trust, By-Laws, or any material
contract or any other material commitment or obligation, and is not subject
to any order or decree, which would be violated by its execution of or
performance under this Agreement and Plan of Reorganization.
(g) The Governor Funds is not under the jurisdiction of a Court
in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of
the Internal Revenue Code of 1986, as amended (the "Code").
(h) The Governor Funds does not have any unamortized or unpaid
organizational fees or expenses.
(i) The Governor Portfolio satisfies, will at the Closing
satisfy, and consummation of the transactions contemplated by this Agreement
will not cause it to fail to satisfy, for any period, the requirements of
Subchapter M of the Code relating to qualification as a regulated investment
company.
5. REPRESENTATIONS AND WARRANTIES BY THE TRUST
The Trust represents and warrants to the Governor Funds that:
(a) The Trust is a business trust created under the laws of the
State of Delaware on August 11, 2000, and is validly existing and in good
standing under the laws of that state. The Trust, of which the Vision
Portfolio is a [diversified/non-diversified] separate series, is duly
registered under the 1940 Act, as an open-end, management investment company,
such registration is in full force and effect as of the date hereof or will
be in full force and effect as of the Closing and all of its shares sold have
been sold pursuant to an effective registration statement filed under the
1933 Act, except for any shares sold pursuant to the private offering
exemption for the purpose of raising the initial capital.
(b) The Trust is authorized to issue an unlimited number of
shares of beneficial interest, without par value. Each outstanding share is
fully paid, non-assessable and has full voting rights and except for any
shares sold pursuant to the private offering exemption for purposes of
raising initial capital, is fully transferable. The Class A Shares of
beneficial interest of the Vision Portfolio to be issued pursuant to this
Agreement will be fully paid, non-assessable, fully transferable and have
full voting rights.
(c) At the Closing, the Class A Shares of beneficial interest
of the Vision Portfolio will be eligible for offering to the public in those
states of the United States and jurisdictions in which the Investor Shares of
the Governor Portfolio are presently eligible for offering to the public, and
there are a sufficient number of such shares registered under the 1933 Act,
to permit the transfers contemplated by this Agreement to be consummated.
(d) The Trust has the necessary power and authority to conduct
its business as such business is now being conducted.
(e) The Trust is not a party to or obligated under any
provision of its Agreement and Declaration of Trust, By-laws, or any material
contract or any other material commitment or obligation, and is not subject
to any order or decree, which would be violated by its execution of or
performance under this Agreement.
(f) Neither the Trust nor the Vision Portfolio is under the
jurisdiction of a Court in a Title 11 or similar case within the meaning of
Section 368(a)(3)(A) of the Code.
(g) The Trust does not have any unamortized or unpaid
organizational fees or expenses.
(h) The books and records of the Vision Portfolio made
available to the Governor Funds and/or its counsel are true and correct in
all material respects and contain no material omissions with respect to the
business and operations of the Vision Portfolio.
6. REPRESENTATIONS AND WARRANTIES BY THE GOVERNOR FUNDS AND THE TRUST
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The Governor Funds and the Trust each represents and warrants to
the other that:
(a) The statement of assets and liabilities to be furnished by
it as of the close of business on the Closing Date for the purpose of
determining the number of Class A Shares of beneficial interest of the Vision
Portfolio to be issued pursuant to Section 1 of this Agreement will
accurately reflect its Net Assets in the case of the Governor Portfolio and
its net assets in the case of the Vision Portfolio, and outstanding shares of
beneficial interest, as of such date, in conformity with generally accepted
accounting principles applied on a consistent basis.
(b) At the Closing, it will have good and marketable title to
all of the securities and other assets shown on the statement of assets and
liabilities referred to in subsection (a) above, free and clear of all liens
or encumbrances of any nature whatsoever except such restrictions as might
arise under the 1933 Act with respect to privately placed or otherwise
restricted securities that it may have acquired in the ordinary course of
business and such imperfections of title or encumbrances as do not materially
detract from the value or use of the assets subject thereto, or materially
affect title thereto.
(c) There are no legal, administrative or other proceedings or
investigations against, or, to its knowledge threatened against, it which
would materially affect its financial condition or its ability to consummate
the transactions contemplated by this Agreement. It is not charged with or,
to the best of its knowledge, threatened with any violation or investigation
of any possible violation of any provisions of any federal, state or local
law or regulation or administrative ruling relating to any aspect of its
business.
(d) There are no known actual or proposed deficiency
assessments with respect to any taxes payable by it.
(e) It has duly and timely filed all Tax (as defined below)
returns and reports (including information returns), which are required to be
filed by it, and all such returns and reports accurately state the amount of
Tax owed for the periods covered by the returns, or, in the case of
information returns, the amount and character of income required to be
reported by it. It has paid or made provision and properly accounted for all
Taxes due or properly shown to be due on such returns and reports. The
amounts set up as provisions for Taxes in its books and records as of the
close of business on the Closing Date will, to the extent required by
generally accepted accounting principles, be sufficient for the payment of
all Taxes of any kind, whether accrued, due, absolute, contingent or
otherwise, which were or which may be payable by it for any periods or fiscal
years prior to or including the close of business on the Closing Date,
including all Taxes imposed before or after the close of business on the
Closing Date which are attributable to any such period or fiscal year. No
return filed by it is currently being audited by the Internal Revenue Service
or by any state or local taxing authority. As used in this Agreement, "Tax"
or "Taxes" means all federal, state, local and foreign (whether imposed by a
country or political subdivision or authority thereunder) income, gross
receipts, excise, sales, use, value added, employment, franchise, profits,
property, ad valorem or other taxes, stamp taxes and duties, fees,
assessments or charges, whether payable directly or by withholding, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority (foreign or domestic) with respect thereto.
To its knowledge, there are no levies, liens or encumbrances relating to
Taxes existing, threatened or pending with respect to its assets.
(f) It has full power and authority to enter into and perform
its obligations under this Agreement, subject with respect to the performance
of its obligations by the Governor Funds and the Governor Portfolio, to
approval of its shareholders. The execution, delivery and performance of
this Agreement have been duly and validly authorized, executed and delivered
by it, and this Agreement constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, subject as to
enforcement to the effect of bankruptcy, insolvency, reorganization,
arrangements among creditors, moratorium, fraudulent transfer or conveyance,
and other similar laws of general applicability relating to or affecting
creditor's rights and to general equity principles.
(g) All information provided to the Governor Funds by the Trust
and by the Governor Funds to the Trust for inclusion in, or transmittal with,
the Combined Proxy Statement and Prospectus with respect to this Agreement
and Plan of Reorganization pursuant to which approval of the Governor
Portfolio's shareholders will be sought, shall not contain any untrue
statement of a material fact, or omit to state a material fact required to be
stated in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(h) No consent, approval, authorization or order of any court
or governmental authority, or of any other person or entity, is required for
the consummation of the transactions contemplated by this Agreement, except
as may be required by the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the 1940 Act, or state securities laws or Delaware
laws (including, in the case of each of the foregoing, the rules and
regulations thereunder).
7. COVENANT OF THE TRUST
The Class A Shares to be issued and delivered to the Governor
Portfolio pursuant to the terms hereof shall have been duly authorized as of
the Closing and, when so issued and delivered, shall be registered under the
1933 Act, duly and validly issued, and fully paid and non-assessable, and no
shareholder of the Vision Portfolio shall have any statutory or contractual
preemptive right of subscription or purchase in respect thereof.
8. COVENANTS OF THE GOVERNOR FUNDS AND THE TRUST
---------------------------------------------
(a) The Governor Funds and the Trust each covenant to operate
their respective businesses as presently conducted between the date hereof
and the Closing.
(b) The Governor Funds undertakes that it will not acquire the
Class A Shares of beneficial interest of the Vision Portfolio for the purpose
of making distributions thereof other than to the Governor Portfolio's
shareholders.
(c) The Governor Funds and the Trust each agree that by the
Closing, all of its federal and other Tax returns and reports required by law
to be filed on or before such date shall have been filed and all federal and
other Taxes shown as due on said returns shall have either been paid or
adequate liability reserves shall have been provided for the payment of such
Taxes.
(d) The Governor Funds will at the Closing provide the Trust
with:
(1) A statement of the respective tax basis of all
investments to be transferred by the Governor Portfolio to the
Vision Portfolio certified by KPMG LLP.
(2) A copy of the shareholder ledger accounts for all the
shareholders of record of the Investor Shares of the Governor
Portfolio as of the close of business on the Closing Date, who
are to become holders of the Class A Shares of the Vision
Portfolio as a result of the transfer of assets which is the
subject of this Agreement, certified by its transfer agent or its
President to the best of their knowledge and belief.
(e) The Governor Funds agrees to mail to each shareholder of
record of the Investor Shares of the Governor Portfolio entitled to vote at
the meeting of shareholders at which action on this Agreement is to be
considered, in sufficient time to comply with requirements as to notice
thereof, a Combined Proxy Statement and Prospectus which complies in all
material respects with the applicable provisions of Section 14(a) of the 1934
Act and Section 20(a) of the 1940 Act, and the rules and regulations,
respectively, thereunder.
(f) The Trust will file with the United States Securities and
Exchange Commission (the "Commission") a Registration Statement on Form N-14
under the 1933 Act ("Registration Statement"), relating to the Class A Shares
of beneficial interest of the Vision Portfolio issuable hereunder, and will
use its best efforts to provide that such Registration Statement becomes
effective as promptly as practicable. At the time such Registration
Statement becomes effective, it (i) will comply in all material respects with
the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act, and
the rules and regulations promulgated thereunder; and (ii) will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. At the time the Registration Statement becomes effective, at the
time of the Governor Portfolio's shareholders' meeting, and at the Closing,
the prospectus and statement of additional information included in the
Registration Statement will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(g) The Governor Funds and the Trust each shall supply to the
other, at the closing, the statement of assets and liabilities described in
Section 6(a) of this Agreement in conformity with the requirements described
in such Section.
9. CONDITIONS PRECEDENT TO BE FULFILLED BY THE GOVERNOR FUNDS AND
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THE TRUST
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The obligations of the Governor Funds and the Trust to effectuate
this Agreement and the Plan of Reorganization hereunder shall be subject to
the following respective conditions:
(a) That (1) all the representations and warranties of the
other party contained herein shall be true and correct in all material
respects as of the Closing with the same effect as though made as of and at
such date; (2) the other party shall have performed all obligations required
by this Agreement to be performed by it at or prior to the Closing; and (3)
the other party shall have delivered to such party a certificate signed by
the President and by the Secretary or equivalent officer to the foregoing
effect.
(b) That the other party shall have delivered to such party a
copy of the resolutions approving this Agreement adopted by the other party's
Board of Trustees, certified by the Secretary or equivalent officer.
(c) That the Commission shall not have issued an unfavorable
advisory report under Section 25(b) of the 1940 Act, nor instituted nor
threatened to institute any proceeding seeking to enjoin consummation of the
reorganization contemplated hereby under Section 25(c) of the 1940 Act, and
no other legal, administrative or other proceeding shall be instituted or
threatened which would materially affect the financial condition of either
party or would prohibit the transactions contemplated hereby.
(d) The reorganization of the Vision Group of Funds, Inc. with
and into the Trust shall have been completed no later than the Closing.
(e) That this Agreement and the Plan of Reorganization and the
transactions contemplated hereby shall have been approved by holders of at
least a majority of the Investor Shares of the Governor Portfolio voted at a
special meeting to be held no later than February 28, 2001 or other such date
as the parties may agree.
(f) That the Governor Portfolio shall have declared a
distribution or distributions prior to the Closing Date which, together with
all previous distributions, shall have the effect of distributing to its
shareholders (i) all of its ordinary income and all of its capital gain net
income, if any, for the period from the close of its last fiscal year to the
close of business on the Closing Date, and (ii) any undistributed ordinary
income and capital gain net income from any prior period. Capital gain net
income has the meaning given such term by Section 1222(9) of the Code.
(g) That prior to or at the Closing, the Governor Funds and the
Trust shall receive an opinion from Stradley, Ronon, Stevens & Young LLP,
special counsel to the Trust, to the effect that, provided the acquisition
contemplated hereby is carried out in accordance with this Agreement and in
accordance with customary representations provided by the Governor Funds and
the Trust in certificates delivered to special counsel to the Trust:
(1) The acquisition by the Vision Portfolio of all of the
assets and the assumption of the liabilities of the Governor
Portfolio in exchange for the Vision Portfolio shares will
qualify as a reorganization within the meaning of Section
368(a)(1)(F) of the Code, and the Vision Portfolio and the
Governor Portfolio will each be a "party to the reorganization"
within the meaning of Section 368(b) of the Code;
(2) No gain or loss will be recognized by the Governor
Portfolio upon the transfer of all of its assets to and the
assumption of its liabilities by the Vision Portfolio in exchange
solely for shares of the Vision Portfolio pursuant to Section
361(a) and Section 357(a) of the Code;
(3) No gain or loss will be recognized by the Vision
Portfolio upon the receipt by it of all of the assets and the
assumption of the liabilities of the Governor Portfolio in
exchange solely for shares of the Vision Portfolio pursuant to
Section 1032(a) of the Code;
(4) The basis of the assets of the Governor Portfolio
received by the Vision Portfolio will be the same as the basis of
such assets to the Governor Portfolio immediately prior to the
exchange pursuant to Section 362(b) of the Code;
(5) The holding period of the assets of the Governor
Portfolio received by the Vision Portfolio will include the
period during which such assets were held by the Governor
Portfolio pursuant to Section 1223(2) of the Code;
(6) No gain or loss will be recognized by the
shareholders of the Governor Portfolio upon the exchange of their
shares in the Governor Portfolio for voting shares of the Vision
Portfolio (including fractional shares to which they may be
entitled) pursuant to Section 354(a) of the Code;
(7) The basis of the Vision Portfolio's shares received
by the Governor Portfolio shareholders (including fractional
shares to which they may be entitled) will be the same as the
basis of the shares of the Governor Portfolio exchanged therefor
pursuant to Section 358(a)(1) of the Code;
(8) The holding period of the Vision Portfolio's shares
received by the Governor Portfolio's shareholders (including
fractional shares to which they may be entitled) will include the
holding period of the Governor Portfolio's shares surrendered in
exchange therefor, provided that the Governor Portfolio shares
were held as a capital asset on the date of the Reorganization
pursuant to Section 1223(l) of the Code; and
(9) The Vision Portfolio will succeed to and take into
account as of the date of the transfer (as defined in Section
1.381(b)-1(b) of the Treasury Regulations) the items of the
Governor Portfolio described in Section 381(c) of the Code,
subject to the conditions and limitations specified in Sections
381(b) and (c), 382, 383 and 384 of the Code, and the Treasury
Regulations thereunder.
(h) That the Trust shall have received an opinion in form and
substance reasonably satisfactory to it from Drinker, Biddle & Reath LLP,
counsel to the Governor Funds, to the effect that, subject in all respects to
the effects of bankruptcy, insolvency, arrangement among creditors,
moratorium, fraudulent transfer or conveyance, and other similar laws of
general applicability relating to or affecting creditor's rights and to
general equity principles:
(1) The Governor Funds was created as a business trust
under the laws of the State of Delaware on September 3, 1998, and
is validly existing and in good standing under the laws of the
State of Delaware;
(2) The Governor Funds is authorized to issue an
unlimited number of shares of beneficial interest, par value
$0.0001. Assuming that the initial shares of beneficial interest
of the Investor Shares of the Governor Portfolio were issued in
accordance with the 1940 Act, and the Agreement and Declaration
of Trust and By-Laws of the Governor Funds, and that all other
such outstanding shares of the Governor Portfolio were sold,
issued and paid for in accordance with the terms of the Governor
Portfolio's prospectus in effect at the time of such sales, each
such outstanding share is fully paid, non-assessable, and, except
for any shares sold pursuant to the private offering exemption
for purposes of raising initial capital, is fully transferable
and has full voting rights;
(3) The Governor Funds is an open-end, investment company
of the management type registered as such under the 1940 Act;
(4) Except as disclosed in the Governor Portfolio's
currently effective prospectus, such counsel does not know of any
material suit, action, or legal or administrative proceeding
pending or threatened against the Governor Funds, the unfavorable
outcome of which would materially and adversely affect the
Governor Funds or the Governor Portfolio;
(5) To such counsel's knowledge, no consent, approval,
authorization or order of any court, governmental authority or
agency is required for the consummation by Governor Funds of the
transactions contemplated by this Agreement, except such as have
been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and
Delaware laws (including, in the case of each of the foregoing,
the rules and regulations thereunder) and such as may be required
under state securities laws;
(6) Neither the execution, delivery nor performance of
this Agreement by the Governor Funds violates any provision of
its Agreement and Declaration of Trust, its By-Laws, or the
provisions of any agreement or other instrument, known to such
counsel to which the Governor Funds is a party or by which the
Governor Funds is otherwise bound; and
(7) This Agreement has been duly and validly authorized,
executed and delivered by the Governor Funds and represents the
legal, valid and binding obligation of the Governor Funds and is
enforceable against Governor Funds in accordance with its terms.
In giving the opinions set forth above, this counsel may state
that it is relying on certificates of the officers of the Governor Funds with
regard to matters of fact and certain certifications and written statements
of governmental officials with respect to the good standing of the Governor
Funds.
(i) That the Governor Funds shall have received an opinion in
form and substance reasonably satisfactory to it from Stradley, Ronon,
Stevens & Young LLP, special counsel to the Trust, to the effect that,
subject in all respects to the effects of bankruptcy, insolvency:
arrangement among creditors, moratorium, fraudulent transfer or conveyance,
and other similar laws of general applicability relating to or affecting
creditor's rights and to general equity principles:
(1) The Trust was created as a business trust under the
laws of the State of Delaware on August 11, 2000, and is validly
existing and in good standing under the laws of the State of
Delaware;
(2) The Trust is authorized to issue an unlimited number
of shares of beneficial interest, without par value. Assuming
that the initial Class A Shares of beneficial interest of the
Vision Portfolio were issued in accordance with the 1940 Act and
the Trust's Agreement and Declaration of Trust and By-laws, and
that all other such outstanding shares of the Vision Portfolio
were sold, issued and paid for in accordance with the terms of
the Vision Portfolio's prospectus in effect at the time of such
sales, each such outstanding share is fully paid, non-assessable,
freely transferable and has full voting rights;
(3) The Trust is an open-end investment company of the
management type registered as such under the 1940 Act;
(4) Except as disclosed in the Vision Portfolio's
currently effective prospectus, such counsel does not know of any
material suit, action, or legal or administrative proceeding
pending or threatened against the Trust, the unfavorable outcome
of which would materially and adversely affect the Trust or the
Vision Portfolio;
(5) The shares of beneficial interest of the Vision
Portfolio to be issued pursuant to the terms of this Agreement
have been duly authorized and, when issued and delivered as
provided in this Agreement, will have been validly issued and
fully paid and will be non-assessable by the Trust or the Vision
Portfolio, and to such counsel's knowledge, no shareholder has
any preemptive right to subscription or purchase in respect
thereof;
(6) To such counsel's knowledge, no consent, approval,
authorization or order of any court, governmental authority or
agency is required for the consummation by the Trust of the
transactions contemplated by this Agreement, except such as have
been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and
Delaware laws (including, in the case of each of the foregoing,
the rules and regulations thereunder and such as may be required
under state securities laws);
(7) Neither the execution, delivery nor performance of
this Agreement by the Trust violates any provision of its
Agreement and Declaration of Trust, its By-laws, or the
provisions of any agreement or other instrument, known to such
counsel to which the Trust is a party or by which the Trust is
otherwise bound; and
(8) This Agreement has been duly and validly authorized,
executed and delivered by the Trust and represents the legal,
valid and binding obligation of the Trust and is enforceable
against the Trust in accordance with its terms.
In giving the opinions set forth above, this counsel may state
that it is relying on certificates of the officers of the Trust with regard
to matters of fact and certain certifications and written statements of
governmental officials with respect to the good standing of the Trust.
(j) That the Trust's Registration Statement with respect to the
Class A Shares of beneficial interest of the Vision Portfolio to be delivered
to the Governor Portfolio's shareholders in accordance with this Agreement
shall have become effective, and no stop order suspending the effectiveness
of the Registration Statement or any amendment or supplement thereto, shall
have been issued prior to the Closing or shall be in effect at the Closing,
and no proceedings for the issuance of such an order shall be pending or
threatened on that date.
(k) That the Class A Shares of beneficial interest of the
Vision Portfolio to be delivered hereunder shall be eligible for sale by the
Trust with each state commission or agency with which such eligibility is
required in order to permit the shares lawfully to be delivered to each
Governor Portfolio shareholder.
(l) That at the Closing, the Governor Funds transfers to the
Vision Portfolio aggregate Net Assets of the Governor Portfolio comprising at
least 90% in fair market value of the total net assets and 70% in fair market
value of the total gross assets recorded on the books of the Governor
Portfolio on the Closing Date.
(m) The Trust, the Governor Funds and Manufacturers and Traders
Trust Company shall have received an order from the Securities Exchange
Commission exempting the transactions contemplated by the Plan of
Reorganization from Section 17(a) of the 1940 Act.
(n) The Trust and Governor Portfolio shall have received
reasonable assurance that no claim for damages (liquidated or otherwise) will
arise as a result of the termination of the Governor Portfolio's service
contracts at the Closing.
(o) As of the Closing Date, the Trustees and officers of the
Governor Funds shall be covered by a trustee and officer liability insurance
policy offering coverage substantially comparable to that provided to such
Trustees and officers in such capacities by the Governor Funds as of the date
hereof with respect to errors or omissions for their service as such on or
prior to the Closing Date, such coverage to commence on the Closing Date and
to terminate six years after the Closing Date. In addition, as of the
Closing Date, Manufacturers and Traders Trust Company shall have agreed to
provide or cause to be provided such waivers of fees payable by, and/or
reimbursements of expenses of, the Vision Portfolio as set forth on Exhibit A
hereto.
10. BROKERAGE FEES AND EXPENSES; OTHER AGREEMENTS
(a) The Governor Funds and the Trust each represents and
warrants to the other that there are no broker or finders' fees payable by it
in connection with the transactions provided for herein.
(b) The expenses of entering into and carrying out the
provisions of this Agreement, whether or not consummated, shall be borne
exclusively by Manufacturers and Traders Trust Company and not by the Trust
or the Governor Funds.
(c) Any other provision of this Agreement to the contrary
notwithstanding, any liability of the Governor Funds under this Agreement
with respect to any series of the Governor Funds, or in connection with the
transactions contemplated herein with respect to any series of the Governor
Funds, shall be discharged only out of the assets of that series of the
Governor Funds, and no other series of the Governor Funds shall be liable
with respect thereto.
11. TERMINATION; WAIVER; ORDER
(a) Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the Plan of
Reorganization abandoned at any time (whether before or after adoption
thereof by the shareholders of the Governor Portfolio) prior to the Closing
as follows:
(1) by mutual consent of the Governor Funds and the Trust
in writing;
(2) by the Trust if any condition precedent to its
obligations set forth in Section 9 has not been fulfilled or
waived by the Trust in writing; or
(3) by the Governor Funds if any condition precedent to
its obligations set forth in Section 9 has not been fulfilled or
waived by the Governor Funds in writing.
An election by the Governor Funds or the Trust to terminate this
Agreement and to abandon the Plan of Reorganization shall be exercised,
respectively, by the Board of Trustees of the Governor Funds or the Board of
Trustees of the Trust.
(b) If the transactions contemplated by this Agreement have not
been consummated by March 31, 2001, this Agreement shall automatically
terminate on that date, unless a later date is agreed to in writing by both
the Governor Funds and the Trust.
(c) In the event of termination of this Agreement pursuant to
the provisions hereof, the same shall become void and have no further effect,
and there shall not be any liability on the part of either the Governor Funds
or the Trust or persons who are their trustees, officers, agents or
shareholders in respect of this Agreement.
(d) At any time prior to the Closing, any of the terms or
conditions of this Agreement may be waived by either the Governor Funds or
the Trust, respectively (whichever is entitled to the benefit thereof), by
action taken by the Board of Trustees of the Governor Funds or the Board of
Trustees of the Trust, if, in the judgment of the Board of Trustees of the
Governor Funds or the Board of Trustees of the Trust (as the case may be),
such action or waiver will not have a material adverse effect on the benefits
intended under this Agreement to the holders of shares of the Governor
Portfolio or the Vision Portfolio, on behalf of which such action is taken.
(e) The respective representations, warranties and covenants
contained in Sections 4-8 hereof shall expire with, and be terminated by, the
consummation of the Plan of Reorganization.
(f) If any order or orders of the Commission with respect to
this Agreement shall be issued prior to the Closing and shall impose any
terms or conditions which are determined by action of the Board of Trustees
of the Governor Funds or the Board Trustees of the Trust to be acceptable,
such terms and conditions shall be binding as if a part of this Agreement
without further vote or approval of the shareholders of the Governor
Portfolio, unless such further vote is required by applicable law or such
terms and conditions shall result in a change in the method of computing the
number of Class A Shares of beneficial interest of the Vision Portfolio to be
issued to the Governor Portfolio in which event, unless such terms and
conditions shall have been included in the proxy solicitation material
furnished to the shareholders of the Governor Portfolio prior to the meeting
at which the transactions contemplated by this Agreement shall have been
approved, this Agreement shall not be consummated and shall terminate unless
the Governor Funds shall promptly call a special meeting of shareholders of
the Governor Portfolio at which such conditions so imposed shall be submitted
for approval.
12. INDEMNIFICATION BY THE TRUST AND THE VISION PORTFOLIO
-----------------------------------------------------
The Trust and the Vision Portfolio hereby agree to indemnify and
hold the Trustees of the Governor Funds (each an "Indemnified Party")
harmless from all loss, liability and expenses (including reasonable counsel
fees and expenses in connection with the contest of any claim) not covered by
the insurance to be provided to the Trustees of the Governor Funds as
described in the first sentence of Section 9(o) hereof, which any Indemnified
Party may incur or sustain by reason of the fact that (i) any representations
or warranties made by the Trust in Sections 5 or 7 hereof should prove false
or erroneous in any material respect, (ii) any covenant has been breached by
the Trust or the Vision Portfolio in any material respect, or (iii) any claim
is made alleging that (a) the Combined Proxy Statement and Prospectus
delivered to the shareholders of the Governor Portfolio in connection with
this transaction or (b) the Registration Statement on Form N-14 of which such
Combined Proxy Statement and Prospectus forms a part, included any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except insofar as such claim is based on written
information furnished to the Trust by the Governor Funds, its investment
adviser or distributor.
13. NOTICE OF CLAIM OF INDEMNIFICATION
In the event that any claim is made against any Indemnified Party
in respect of which indemnity may be sought by an Indemnified Party under
Section 12 of this Agreement, the Indemnified Party seeking indemnification
shall, with reasonable promptness and before payment of such claim, give
written notice of such claim to the other party (the "Indemnifying Party").
If no objection as to the validity of the claim is made in writing to the
Indemnified Party by the Indemnifying Party within thirty (30) days after
giving notice hereunder, then, the Indemnified Party may pay such claim and
shall be entitled to reimbursement therefor, pursuant to this Agreement. If,
prior to the termination of such thirty-day period, objection in writing as
to the validity of such claim is made to the Indemnified Party, the
Indemnified Party shall withhold payment thereof until the validity of the
claim is established (i) to the satisfaction of the Indemnifying Party, or
(ii) by a final determination of a court of competent jurisdiction, whereupon
the Indemnified Party may pay such claim and shall be entitled to
reimbursement thereof, pursuant to this Agreement and Plan of Reorganization,
or (iii) with respect to any Tax claims, within seven (7) calendar days
following the earlier of (A) an agreement between the Governor Funds and the
Trust that an indemnity amount is payable, (B) an assessment of a Tax by a
taxing authority, or (C) a "determination" as defined in Section 1313(a) of
the Code. For purposes of this Section 13, the term "assessment" shall have
the same meaning as used in Chapter 63 of the Code and Treasury Regulations
thereunder, or any comparable provision under the laws of the appropriate
taxing authority. In the event of any objection by the Indemnifying Party,
the Indemnifying Party shall promptly investigate the claim, and if it is not
satisfied with the validity thereof, the Indemnifying Party shall conduct the
defense against such claim. All costs and expenses incurred by the
Indemnifying Party in connection with such investigation and defense of such
claim shall be borne by it. These indemnification provisions are in addition
to, and not in limitation of, any other rights the parties may have under
applicable law.
14. FINAL TAX RETURNS AND FORMS 1099 OF THE GOVERNOR PORTFOLIO
(a) After the Closing, the Governor Funds shall or shall cause
its agents to prepare any federal, state or local Tax returns, including any
Forms 1099, required to be filed by the Governor Funds with respect to the
Governor Portfolio's final taxable year ending with its complete liquidation
and for any prior periods or taxable years and shall further cause such Tax
returns and Forms 1099 to be duly filed with the appropriate taxing
authorities.
(b) Notwithstanding the provisions of Section 1 hereof, any
expenses incurred by the Governor Funds or the Governor Portfolio (other than
for payment of Taxes) in connection with the preparation and filing of said
Tax returns and Forms 1099 after the Closing, shall be borne by the Governor
Portfolio to the extent such expenses have been or should have been accrued
by the Governor Portfolio in the ordinary course without regard to the Plan
of Reorganization contemplated by this Agreement; any excess expenses shall
be borne by a third party other than the Trust or the Governor Funds or their
respective series at the time such Tax returns and Forms 1099 are prepared.
15. COOPERATION AND EXCHANGE OF INFORMATION
The Trust and the Governor Funds will provide each other and
their respective representatives with such cooperation and information as
either of them reasonably may request of the other in filing any Tax returns,
amended return or claim for refund, determining a liability for Taxes or a
right to a refund of Taxes or participating in or conducting any audit or
other proceeding in respect of Taxes. Such cooperation and information shall
include providing copies of relevant Tax returns or portions thereof,
together with accompanying schedules and related work papers and documents
relating to rulings or other determinations by taxing authorities. Each
party shall make its employees and officers available on a mutually
convenient basis to provide explanations of any documents or information
provided hereunder to the extent, if any, that such party's employees are
familiar with such documents or information. Each party or their respective
agents will retain for a period of six (6) years following the Closing Date
all returns, schedules and work papers and all material records or other
documents relating to Tax matters of the Governor Portfolio and Vision
Portfolio for its taxable period first ending after the Closing Date and for
all prior taxable periods. Any information obtained under this Section 15
shall be kept confidential except as may be otherwise necessary in connection
with the filing of returns or claims for refund.
16. ENTIRE AGREEMENT AND AMENDMENTS
This Agreement embodies the entire Agreement between the parties
and there are no agreements, understandings, restrictions, or warranties
between the parties other than those set forth herein or herein provided
for. This Agreement may be amended only by mutual consent of the parties in
writing. Neither this Agreement nor any interest herein may be assigned
without the prior written consent of the other party.
17. COUNTERPARTS
This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts
together shall constitute but one instrument.
18. NOTICES
Any notice, report, or demand required or permitted by any
provision of this Agreement shall be in writing and shall be deemed to have
been given if delivered or mailed, first class postage prepaid, addressed to
the Governor Funds at ,
Attention: , with copies to Michael P. Malloy, Drinker
Biddle & Reath LLP, One Logan Square, 18th and Cherry Streets, Philadelphia,
Pennsylvania 19103-6996, or to the Trust, at 5800 Corporate Drive,
Pittsburgh, PA 15237-7010, Attention: Secretary as the case may be.
19. GOVERNING LAW
This Agreement shall be governed by and carried out in accordance
with the internal laws of the State of Delaware.
20. EFFECT OF FACSIMILE SIGNATURE.
-----------------------------
A facsimile signature of an authorized officer of a party hereto
on this Agreement and/or any transfer document shall have the same effect as
if executed in the original by such officer.
IN WITNESS WHEREOF, the Governor Funds and the Trust have each
caused
this Agreement and Plan of Reorganization to be executed on its behalf by its
duly authorized officers, all as of the day and year first-above written.
GOVERNOR FUNDS, ON BEHALF OF THE [
--------------
] FUND SERIES
Attest:
By: By:
------------ ------------
Title: Secretary Title:
------------
VISION GROUP OF FUNDS, ON BEHALF OF
THE [ ] FUND SERIES
Attest:
By: By:
Title: Secretary Title:
MANUFACTURERS AND TRADERS
TRUST COMPANY (ONLY WITH RESPECT
TO THE COMMITMENT SET FORTH IN
SECTION 10(B) AND 14(B))
Attest:
By: By:
Title: Secretary Title:
B-2 Doc. #359522 v.02
Doc. #359522 v.03 11/09/00 12:43 PM
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the U.S. TREASURY OBLIGATIONS MONEY MARKET FUND (the
"Governor Fund"), a series of shares of the Governor Funds, registered in the
name of the undersigned at the Special Meeting of Shareholders of the
Governor Funds (the "Special Meeting") to be held at the offices of the
Governor Funds, 3435 Stelzer Road, Columbus, Ohio 43218-3035, on December
13, 2000, at 2:00 p.m. (Eastern time), and at any postponement or adjournment
thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the U.S.
Treasury Obligations Money Market Fund series (the "Governor
Fund"), and the Vision Group of Funds, on behalf of the Vision
Treasury Money Market Fund series ("Vision Fund"), whereby the
Vision Fund would acquire all or substantially all of the assets
and liabilities of the Governor Fund in exchange solely for the
Vision Fund's shares, to be distributed pro rata by the Governor
Fund to the holders of its shares, in complete liquidation of the
Governor Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the ESTABLISHED GROWTH FUND (the "Governor Fund"), a series
of shares of the Governor Funds, registered in the name of the undersigned at
the Special Meeting of Shareholders of the Governor Funds (the "Special
Meeting") to be held at the offices of the Governor Funds, 3435 Stelzer Road,
Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m. (Eastern
time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the
Established Growth Fund series (the "Governor Fund"), and the
Vision Group of Funds, on behalf of the Vision Large Cap Core
Fund series ("Vision Fund"), whereby the Vision Fund would
acquire all or substantially all of the assets and liabilities of
the Governor Fund in exchange solely for the Vision Fund's
shares, to be distributed pro rata by the Governor Fund to the
holders of its shares, in complete liquidation of the Governor
Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the PRIME MONEY MARKET FUND (the "Governor Fund"), a series
of shares of the Governor Funds, registered in the name of the undersigned at
the Special Meeting of Shareholders of the Governor Funds (the "Special
Meeting") to be held at the offices of the Governor Funds, 3435 Stelzer Road,
Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m. (Eastern
time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the Prime
Money Market Fund series (the "Governor Fund"), and the Vision
Group of Funds, on behalf of the Vision Institutional Prime Money
Market Fund series ("Vision Fund"), whereby the Vision Fund would
acquire all or substantially all of the assets and liabilities of
the Governor Fund in exchange solely for the Vision Fund's
shares, to be distributed pro rata by the Governor Fund to the
holders of its shares, in complete liquidation of the Governor
Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the AGGRESSIVE GROWTH FUND (the "Governor Fund"), a series
of shares of the Governor Funds, registered in the name of the undersigned at
the Special Meeting of Shareholders of the Governor Funds (the "Special
Meeting") to be held at the offices of the Governor Funds, 3435 Stelzer Road,
Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m. (Eastern
time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the
Aggressive Growth Fund series (the "Governor Fund"), and the
Vision Group of Funds, on behalf of the Vision Small Cap Stock
Fund series ("Vision Fund"), whereby the Vision Fund would
acquire all or substantially all of the assets and liabilities of
the Governor Fund in exchange solely for the Vision Fund's
shares, to be distributed pro rata by the Governor Fund to the
holders of its shares, in complete liquidation of the Governor
Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the INTERNATIONAL EQUITY FUND (the "Governor Fund"), a
series of shares of the Governor Funds, registered in the name of the
undersigned at the Special Meeting of Shareholders of the Governor Funds (the
"Special Meeting") to be held at the offices of the Governor Funds, 3435
Stelzer Road, Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m.
(Eastern time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1, 2
AND 3 SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1, 2 and 3.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the
International Equity Fund series (the "Governor Fund"), and the
Vision Group of Funds, on behalf of the Vision International
Equity Fund series ("Vision Fund"), whereby the Vision Fund would
acquire all or substantially all of the assets and liabilities of
the Governor Fund in exchange solely for the Vision Fund's
shares, to be distributed pro rata by the Governor Fund to the
holders of its shares, in complete liquidation of the Governor
Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC ("Martindale").
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To approve a new investment sub-advisory agreement
between Martindale, with respect to the management of the
International Equity Fund, and Brinson Partners, Inc.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
4. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the INTERMEDIATE TERM INCOME FUND (the "Governor Fund"), a
series of shares of the Governor Funds, registered in the name of the
undersigned at the Special Meeting of Shareholders of the Governor Funds (the
"Special Meeting") to be held at the offices of the Governor Funds, 3435
Stelzer Road, Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m.
(Eastern time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the
Intermediate Term Income Fund series (the "Governor Fund"), and
the Vision Group of Funds, on behalf of the Vision Intermediate
Term Bond Fund series ("Vision Fund"), whereby the Vision Fund
would acquire all or substantially all of the assets and
liabilities of the Governor Fund in exchange solely for the
Vision Fund's shares, to be distributed pro rata by the Governor
Fund to the holders of its shares, in complete liquidation of the
Governor Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the LIMITED DURATION GOVERNMENT SECURITIES FUND (the
"Governor Fund"), a series of shares of the Governor Funds, registered in the
name of the undersigned at the Special Meeting of Shareholders of the
Governor Funds (the "Special Meeting") to be held at the offices of the
Governor Funds, 3435 Stelzer Road, Columbus, Ohio 43218-3035, on December
13, 2000, at 2:00 p.m. (Eastern time), and at any postponement or adjournment
thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the Limited
Duration Government Securities Fund series (the "Governor Fund"),
and the Vision Group of Funds, on behalf of the Vision
Institutional Limited Duration U.S. Government Fund series
("Vision Fund"), whereby the Vision Fund would acquire all or
substantially all of the assets and liabilities of the Governor
Fund in exchange solely for the Vision Fund's shares, to be
distributed pro rata by the Governor Fund to the holders of its
shares, in complete liquidation of the Governor Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the PENNSYLVANIA MUNICIPAL BOND FUND (the "Governor Fund"),
a series of shares of the Governor Funds, registered in the name of the
undersigned at the Special Meeting of Shareholders of the Governor Funds (the
"Special Meeting") to be held at the offices of the Governor Funds, 3435
Stelzer Road, Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m.
(Eastern time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the
Pennsylvania Municipal Bond Fund series (the "Governor Fund"),
and the Vision Group of Funds, on behalf of the Vision
Pennsylvania Municipal Income Fund series ("Vision Fund"),
whereby the Vision Fund would acquire all or substantially all of
the assets and liabilities of the Governor Fund in exchange
solely for the Vision Fund's shares, to be distributed pro rata
by the Governor Fund to the holders of its shares, in complete
liquidation of the Governor Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the LIFESTYLE CONSERVATIVE GROWTH FUND (the "Governor
Fund"), a series of shares of the Governor Funds, registered in the name of
the undersigned at the Special Meeting of Shareholders of the Governor Funds
(the "Special Meeting") to be held at the offices of the Governor Funds, 3435
Stelzer Road, Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m.
(Eastern time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the
Lifestyle Conservative Growth Fund series (the "Governor Fund"),
and the Vision Group of Funds, on behalf of the Vision Managed
Allocation Fund - Conservative Growth series ("Vision Fund"),
whereby the Vision Fund would acquire all or substantially all of
the assets and liabilities of the Governor Fund in exchange
solely for the Vision Fund's shares, to be distributed pro rata
by the Governor Fund to the holders of its shares, in complete
liquidation of the Governor Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the LIFESTYLE MODERATE GROWTH FUND (the "Governor Fund"), a
series of shares of the Governor Funds, registered in the name of the
undersigned at the Special Meeting of Shareholders of the Governor Funds (the
"Special Meeting") to be held at the offices of the Governor Funds, 3435
Stelzer Road, Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m.
(Eastern time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the
Lifestyle Moderate Growth Fund series (the "Governor Fund"), and
the Vision Group of Funds, on behalf of the Vision Managed
Allocation Fund - Moderate Growth series ("Vision Fund"), whereby
the Vision Fund would acquire all or substantially all of the
assets and liabilities of the Governor Fund in exchange solely
for the Vision Fund's shares, to be distributed pro rata by the
Governor Fund to the holders of its shares, in complete
liquidation of the Governor Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
GOVERNOR FUNDS
3435 Stelzer Road
Columbus, Ohio 43218
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF GOVERNOR FUNDS
Revoking any such prior appointments, the undersigned appoints
Messrs. Michael Gruenwald and Dave Buttke, and Ms. Sue Walters and (or, if
only one shall act, that one) proxies with power of substitution to vote all
of the shares of the LIFESTYLE GROWTH FUND (the "Governor Fund"), a series of
shares of the Governor Funds, registered in the name of the undersigned at
the Special Meeting of Shareholders of the Governor Funds (the "Special
Meeting") to be held at the offices of the Governor Funds, 3435 Stelzer Road,
Columbus, Ohio 43218-3035, on December 13, 2000, at 2:00 p.m. (Eastern
time), and at any postponement or adjournment thereof.
The shares of beneficial interest represented by this Proxy will
be voted in accordance with the instructions given by the undersigned below.
IF NO INSTRUCTIONS ARE GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2
SET FORTH BELOW. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE SPECIAL
MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE PRIOR TO THE TIME OF THE
SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE IN THEIR
DISCRETION. Governor Funds has proposed the Proposals. The Board of
Trustees recommends voting FOR Proposals 1 and 2.
1. PROPOSAL: To approve the Agreement and Plan of Reorganization
(the "Plan") between the Governor Funds, on behalf of the
Lifestyle Growth Fund series (the "Governor Fund"), and the
Vision Group of Funds, on behalf of the Vision Managed Allocation
Fund - Aggressive Growth series ("Vision Fund"), whereby the
Vision Fund would acquire all or substantially all of the assets
and liabilities of the Governor Fund in exchange solely for the
Vision Fund's shares, to be distributed pro rata by the Governor
Fund to the holders of its shares, in complete liquidation of the
Governor Fund.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
2. PROPOSAL: To approve a new investment advisory agreement between
the Governor Funds, on behalf of the Governor Fund, and
Martindale Andres & Company LLC.
FOR _______ AGAINST _______ ABSTAIN _______
------- ------- -------
3. PROPOSAL: To grant the proxies the authority to vote upon such
other business as may properly come before the Special Meeting or
any adjournment thereof.
GRANT_______ WITHHOLD _______ ABSTAIN _______
------- ------- -------
(NOTE: Checking the box labeled ABSTAIN will result in the shares covered by
the Proxy being treated as if they were voted AGAINST the Proposal.) Receipt
is acknowledged of the Notice and Proxy Statement for the Special Meeting to
be held on December 13, 2000. PLEASE SIGN AND DATE THIS PROXY IN THE SPACE
PROVIDED. Execution by shareholders who are not individuals must be made by
an authorized signatory. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title as
such.
Authorized Signature Date
Printed Name (and Title if Applicable)
Authorized Signature (Joint Investor or Second Signatory) Date
Printed Name (and Title if Applicable)
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE TELEPHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 9, 2000
VISION GROUP OF FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
1-800-341-7400
VISION INSTITUTIONAL LIMITED DURATION U.S. GOVERNMENT FUND
VISION PENNSYLVANIA MUNICIPAL INCOME FUND
CLASS A SHARES
VISION INSTITUTIONAL PRIME MONEY MARKET FUND
VISION SMALL CAP STOCK FUND
CLASS A SHARES
VISION INTERMEDIATE TERM BOND FUND
CLASS A SHARES
VISION INTERNATIONAL EQUITY FUND
CLASS A SHARES
VISION LARGE CAP CORE FUND
CLASS A SHARES
VISION MANAGED ALLOCATION FUND - AGGRESSIVE GROWTH
CLASS A SHARES
VISION MANAGED ALLOCATION FUND - CONSERVATIVE GROWTH
CLASS A SHARES
VISION MANAGED ALLOCATION FUND - MODERATE GROWTH
CLASS A SHARES
VISION TREASURY MONEY MARKET FUND
CLASS A SHARES
TO ACQUIRE THE ASSETS OF:
GOVERNOR FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43218
1-800-766-3960
This Statement of Additional Information relates specifically to the
reorganizations of certain mutual funds that are series of the Governor Funds
(each a "Governor Fund") into the above-referenced mutual funds that are series
of the Vision Group of Funds (each a "Vision Fund"). Pursuant to each
reorganization, each Vision Fund would acquire all or substantially all of the
assets and assume all of the liabilities of the Governor Fund that has identical
or substantially similar investment objectives, and Vision Fund shares would be
distributed pro rata by the Governor Fund to the holders of its shares, in
complete liquidation of the Governor Fund. For the name of the Vision Fund into
which your Governor Fund would be reorganized, see the "Summary - About the
Proposed Reorganization" in the Prospectus/Proxy Statement dated November 9,
2000.
This Statement of Additional Information dated November 9, 2000 is not
a prospectus. A Prospectus/Proxy Statement dated November 9, 2000, related
to the above-referenced matter may be obtained from the Vision Group of Funds
at the address and telephone number shown above. This Statement of
Additional Information should be read in conjunction with such
Prospectus/Proxy Statement.
14
Doc. #360501 v.01
This Statement of Additional Information consists of the following
described documents, each of which is incorporated by reference herein:
......1. Statement of Additional Information of U.S. Treasury Obligations
Money Market Fund, Established Growth Fund, Prime Money Market Fund,
Aggressive Growth Fund, International Equity Fund, Intermediate Term Income
Fund, Limited Duration Government Securities Fund, Pennsylvania Municipal
Bond Fund, Lifestyle Conservative Growth Fund, Lifestyle Moderate Growth
Fund, and Lifestyle Growth Fund, each a series of Governor Funds, dated
October 30, 2000, included in Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A of Governor Funds (1933 Act File No.
333-65213 and 1940 Act File No. 811-9029), previously filed on EDGAR,
Accession Number 0000950152-00-001223.
......2. Statements of Additional Information of Vision Institutional Prime
Money Market Fund, Vision Institutional Limited Duration U.S. Government
Fund, Vision Treasury Money Market Fund, Vision Large Cap Core Fund, Vision
Intermediate Term Bond Fund, Vision Pennsylvania Municipal Income Fund,
Vision Managed Allocation Fund - Conservative Growth, Vision Managed
Allocation Fund - Moderate Growth, Vision Managed Allocation Fund -
Aggressive Growth, Vision Small Cap Stock Fund, and Vision International
Equity Fund, each a series of Vision Group of Funds dated November 8, 2000,
included in Post-Effective Amendment No. 45 to the Registration Statement on
Form N-1A of Vision Group of Funds (1933 Act File No. 33-20673 and 1940 Act
File No. 5514) previously filed on EDGAR, Accession Number
0000830744-00-000021.
......3. The audited financial statements of U.S. Treasury Obligations Money
Market Fund, Established Growth Fund, Prime Money Market Fund, Aggressive
Growth Fund, International Equity Fund, Intermediate Term Income Fund,
Limited Duration Government Securities Fund, Pennsylvania Municipal Bond
Fund, Lifestyle Conservative Growth Fund, Lifestyle Moderate Growth Fund, and
Lifestyle Growth Fund, each a series of the Governor Funds, and accompanying
audit report of KPMG LLP, included in the Annual Report to Shareholders of
the Governor Funds for the fiscal year ended June 30, 2000, previously filed
on EDGAR, Accession Number 0000950152-00-006371.
......4. The audited financial statements of Vision Treasury Money Market
Fund, a series of Vision Group of Funds, included in the Annual Report to
Shareholders of Vision Group of Funds, Inc. (predecessor to the Vision Group
of Funds) for the fiscal year ended April 30, 2000, previously filed on
EDGAR, Accession Number 0000830744-00-000011.
......No Pro Forma Financial Statements are provided for any of the proposed
reorganized Funds because of the following reasons:
o.....Aggressive Growth Fund (Acquired Fund) is to be acquired by Vision
Small Cap Stock Fund, which is a shell fund requiring no pro
forma financial statements.
o Established Growth Fund (Acquired Fund) is to be acquired by Vision
Large Cap Core Fund, which is a shell fund requiring no pro forma
financial statements.
o Intermediate Term Income Fund (Acquired Fund) is to be acquired by
Vision Intermediate Term Bond Fund, which is a shell fund
requiring no pro forma financial statements.
o International Equity Fund (Acquired Fund) is to is to be acquired by
Vision International Equity Fund, which is a shell fund requiring
no pro forma financial statements.
o Lifestyle Conservative Growth Fund (Acquired Fund) is to be acquired by
Vision Managed Allocation Fund - Conservative Growth, which is a
shell fund requiring no pro forma financial statements.
o Lifestyle Growth Fund (Acquired Fund) is to be acquired by Vision
Managed Allocation Fund - Aggressive Growth, which is a shell
fund requiring no pro forma financial statements.
o Lifestyle Moderate Growth Fund (Acquired Fund) is to be acquired by
Vision Managed Allocation Fund - Moderate Growth, which is a
shell fund requiring no pro forma financial statements.
o Limited Duration Government Securities Fund (Acquired Fund) is to be
acquired by Vision Institutional Limited Duration U.S. Government
Fund, which is a shell fund requiring no pro forma financial
statements.
o Pennsylvania Municipal Bond Fund (Acquired Fund) is to be acquired by
Vision Pennsylvania Municipal Income Fund, which is a shell fund
requiring no pro forma financial statements.
o Prime Money Market Fund (Acquired Fund) is to be acquired by Vision
Institutional Prime Money Market Fund, which is a shell fund
requiring no pro forma financial Statements.
o U.S. Treasury Obligation Money Market Fund (Acquired Fund) has assets
that total less than 10% of the total assets of the Vision
Treasury Money Market Fund (Acquiring Fund).
PART C
OTHER INFORMATION
Item 15. Indemnification
Indemnification is provided to officers and Trustees of the
Registrant pursuant to Section 4 of Article VII of the
Registrant's Agreement and Declaration of Trust ("Declaration of
Trust"). The Registrant's officers and Trustees are also
entitled to purchase with Trust property coverage under an Errors
& Omissions Policy pursuant to Section 7 of Article VII of the
Declaration of Trust.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "1933 Act"), may be
permitted to Trustees, officers, and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust
or otherwise, the Registrant is aware that, in the opinion of the
Securities and Exchange Commission ("SEC"), such indemnification
is against public policy as expressed in the 1933 Act, and,
therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by Trustees,
officers, or controlling persons of the Registrant in connection
with the successful defense of any act, suit, or proceeding) is
asserted by such Trustees, officers, or controlling persons in
connection with the shares being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be
governed by the final adjudication of such issues.
Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940, as
amended (the "1940 Act"), for Trustees, officers, and controlling
persons of the Registrant by the Registrant pursuant to the
Declaration of Trust or otherwise, the Registrant is aware of the
position of the SEC as set forth in Investment Company Act
Release No. IC-11330. Therefore, the Registrant undertakes that,
in addition to complying with the applicable provisions of the
Declaration of Trust or otherwise, in the absence of a final
decision on the merits by a court or other body before which the
proceeding was brought, that an indemnification payment will not
be made unless in the absence of such a decision, a reasonable
determination based upon factual review has been made (i) by a
majority vote of a quorum of non-party Trustees who are not
"interested persons" of the Registrant or (ii) by independent
legal counsel in a written opinion that the indemnitee was not
liable for an act of willful misfeasance, bad faith, gross
negligence, or reckless disregard of duties. The Registrant
further undertakes that advancement of expenses incurred in the
defense of a proceeding (upon undertaking for repayment unless it
is ultimately determined that indemnification is appropriate)
against an officer, Trustee, or controlling person of the
Registrant will not be made absent the fulfillment of at least
one of the following conditions: (i) the indemnitee provides
security for his undertaking; (ii) the Registrant is insured
against losses arising by reason of any lawful advances; or (iii)
a majority of a quorum of disinterested non-party Trustees, or
independent legal counsel in a written opinion, makes a factual
determination that there is reason to believe the indemnitee will
be entitled to indemnification.
Item 16. Exhibits
(1) Copies of the Charter of the Registrant as now in effect.
(a) Form of Certificate of Trust of the Registrant, is
incorporated by reference to Registrant's Post-Effective
Amendment No.43 on Form N-1A filed electronically with the
SEC on August 25, 2000 (File Nos. 33-20673 and 811-5514).
(b) Form of Agreement and Declaration of Trust of the
Registrant, is incorporated herein by reference to the
Registrant's Post-Effective Amendment No. 43 on Form N-1A
filed electronically with the SEC on August 25, 2000 (File
Nos. 33-20673 and 811-5514).
(2) By-Laws.
By-Laws of the Registrant, are incorporated herein by reference
to the Registrant's Post-Effective Amendment No. 43 on Form N-1A
filed electronically with the SEC on August 25, 2000 (File Nos.
33-20673 and 811-5514).
(3) Voting Trust Agreement.
Not applicable.
(4) Copies of the agreement of acquisition, reorganization, merger,
liquidation and any amendments to it:
Form of Agreement and Plan of Reorganization is filed herewith as
Exhibit A to the Combined Prospectus/Proxy Statement.
(5) Instruments defining the rights of security holders.
The rights of security holders of the Registrant are defined in
the following sections of the Registrant's Agreement and
Declaration of Trust and By-Laws:
(a) Agreement and Declaration of Trust.
See Article III, "Shares," Section 4 and Section 6; Article
V, "Shareholders' Voting Powers and Meetings," Section 1;
and Article VI, "Net Asset Value, Distributions and
Redemptions," Section 2.
(b) By-Laws.
See Article II, "Meetings of Shareholders," Section 6 and
Section 9.
(6) Investment Advisory Contracts.
(a) Conformed copy of Investment Advisory Contract of the
Registrant is incorporated by reference to Registrant's
Post-Effective Amendment No. 13 on Form N-1A filed
electronically with the SEC on December 27, 1993 (File Nos.
33-20673 and 811-5514).
(b) Conformed copy of Exhibit B to Investment Advisory Contract
is incorporated by reference to Registrant's Post-Effective
Amendment No. 23 on Form N-1A filed electronically with the
SEC on June 27, 1996. (File Nos. 33-20673 and 811-5514).
(c) Conformed copy of Exhibit C to Investment Advisory Contract is
incorporated by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A filed electronically with the SEC
on September 24, 1997 (File Nos. 33-20673 and 811-5514).
(d) Conformed copy of Sub-advisory Agreement for the Vision New York
Tax-Free Money Market Fund is incorporated by reference to
Registrant's Post-Effective Amendment No. 34 on Form N-1A filed
electronically with the SEC on March 12, 1999, (File Nos.
33-20673 and 811-5514).
(e) Conformed copy of Investment Advisory Contract for the Vision
New York Tax-Free Money Market Fund including Exhibit A is
incorporated by reference to Registrant's Post-Effective
Amendment No. 34 on Form N-1A filed electronically with the SEC
on March 12, 1999, (File Nos. 33-20673 and 811-5514).
(f) Conformed copy of Exhibit D to the Investment Advisory
Contract is incorporated by reference to Registrant's
Post-Effective Amendment No. 40 on Form N-1A filed
electronically with the SEC on February 29, 2000 (File Nos.
33-20673 and 811-5514).
(g) Conformed copy of Exhibit E to the Investment Advisory
Contract is incorporated by reference to Registrant's
Post-Effective Amendment No. 40 on Form N-1A filed
electronically with the SEC on February 29, 2000 (File Nos.
33-20673 and 811-5514).
(h) Conformed copy of Assignment of Sub-Advisory Agreement for
Vision New York Tax-Free Money Market Fund is incorporated
by reference to Registrant's Post-Effective Amendment No.
40 on Form N-1A filed electronically with the SEC on
February 29, 2000 (File Nos. 33-20673 and 811-5514).
(i) Conformed copy of Subadvisory Agreement for the Vision Mid
Cap Stock Fund is incorporated by reference to Registrant's
Post-Effective Amendment No. 40 on Form N-1A filed
electronically with the SEC on February 29, 2000 (File Nos.
33-20673 and 811-5514).
(j) Conformed copy of Subadvisory Agreement for the Vision
Large Cap Growth Fund is incorporated by reference to
Registrant's Post-Effective Amendment No. 41 on Form N-1A
filed electronically with the SEC on April 14, 2000 (File
Nos. 33-20673 and 811-5514).
(7) Underwriting or Distribution Contracts.
(a) Conformed copy of Distributor's Contract of the Registrant
is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed electronically with the
SEC on December 27, 1993 (File Nos. 33-20673 and 811-5514).
(b) Conformed copy of Exhibit C to Distributor's Contract is
incorporated by reference to Registrant's Post-Effective
Amendment No. 23 on Form N-1A filed electronically with the
SEC on June 27, 1996 (File Nos. 33-20673 and 811-5514).
(c) Conformed copy of Exhibit D to the Distributor's Contract
is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed electronically with the
SEC on December 22, 1997 (File Nos. 33-20673 and 811-5514).
(d) Conformed copy of Exhibit E to the Distributor's Contract
is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed electronically with the
SEC on July 8, 1998 (File Nos. 33-20673 and 811-5514).
(e) Conformed Copy of Exhibit F to the Distributor's Contract
is incorporated by reference to Registrant's Post-Effective
Amendment No. 37 on Form N-1A filed electronically with the
SEC on June 23, 1999 (File Nos. 33-20673 and 811-5514).
(f) Conformed Copy of Exhibits G & H to the Distributor's
Contract is incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed
electronically with the SEC on August 20, 1999 (File Nos.
33-20673 and 811-5514).
(g) Conformed copy of Exhibit I to the Distributor's Contract
is incorporated by reference to Registrant's Post-Effective
Amendment No. 40 on Form N-1A filed electronically with the
SEC on February 29, 2000 (File Nos. 33-20673 and 811-5514).
(8) Bonus, Profit Sharing, Pension or other similar contracts.
Not Applicable.
(9) Custodian Agreements.
(a) Conformed copy of Custodian Contract of the Registrant is
incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed electronically with the
SEC on June 26, 1995 (File Nos. 33-20673 and 811-5514).
(b) Copy of Amendment No. 2 to Exhibit A to Custodian Contract
is incorporated by reference to Registrant's Post-Effective
Amendment No. 23 on Form N-1A filed electronically with the
SEC on June 27, 1996 (File Nos. 33-20673 and 811-5514).
(c) Copy of Amendment No. 3 to Exhibit A to Custodian Contract
is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed electronically with the
SEC on August 6, 1997 (File Nos. 33-20673 and 811-5514).
(d) Conformed copy of State Street Domestic Custody Fee
Schedule is incorporated by reference to Registrant's
Post-Effective Amendment No. 30 on Form N-1A filed
electronically with the SEC on December 22, 1997 (File Nos.
33-20673 and 811-5514).
(e) Conformed copy of Amendment No. 4 to Exhibit A to Custodian
Contract is incorporated by reference to Registrant's
Post-Effective Amendment No. 37 on Form N-1A filed
electronically with the SEC on June 23, 1999 (File Nos.
33-20673 and 811-5514).
(f) Conformed copy of Amendment No. 5 to Exhibit A to Custodian
Contract is incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed
electronically with the SEC on August 20, 1999 (File Nos.
33-20673 and 811-5514).
(10) Rule 12b-1 Plan and Rule 18f-3 Plan.
(a) Rule 12b-1 Plan
(i) Copy of Rule 12b-1 Plan is incorporated by reference
to Registrant's Post-Effective Amendment No. 9 on
Form N-1A filed electronically with the SEC on June
17, 19993 (File Nos. 33-20673 and 811-5514).
(ii) Conformed copy of 12b-1 Plan for Class B Shares and
Exhibit A is incorporated by reference to
Registrant's Post-Effective Amendment No. 38 on Form
N-1A filed electronically with the SEC on August 20,
1999 (File Nos. 33-20673 and 811-5514).
(iii) Conformed copy of Exhibit B to Rule 12b-1 Plan is
incorporated by reference to Registrant's
Post-Effective Amendment No. 23 on Form N-1A filed
electronically with the SEC on June 27, 1996 (File
Nos. 33-20673 and 811-5514).
(iv) Conformed copy of Exhibit C to Rule 12b-1 Plan is
incorporated by reference to Registrant's
Post-Effective Amendment No. 30 on Form N-1A filed
electronically with the SEC on December 22, 1997
(File Nos. 33-20673 and 811-5514).
(v) Conformed copy of Exhibit D to Rule 12b-1 Agreement
is incorporated by reference to Registrant's
Post-Effective Amendment No. 32 on Form N-1A filed
electronically with the SEC on July 8, 1998 (File
Nos. 33-20673 and 811-5514).
(vi) Copy of Rule 12b-1 Agreement is incorporated by
reference to Registrant's Post-Effective Amendment
No. 9 on Form N-1A filed electronically with the SEC
on June 17, 1993 (File Nos. 33-20673 and 811-5514).
(vii) Copy of Exhibit B to Rule 12b-1 Agreement is
incorporated by reference to Registrant's
Post-Effective Amendment No. 23 on Form N-1A filed
electronically with the SEC on June 27, 1996 (File
Nos. 33-20673 and 811-5514).
(viii) Copy of Exhibit C to Rule 12b-1 Agreement is
incorporated by reference to Registrant's
Post-Effective Amendment No. 28 on Form N-1A filed
electronically with the SEC on August 6, 1997 (File
Nos. 33-20673 and 811-5514).
(ix) Amended and Restated Plan with conformed copy of
Exhibit D is incorporated by reference to
Registrant's Post-Effective Amendment No. 32 on Form
N-1A filed electronically with the SEC on July 8,
1998 (File Nos. 33-20673 and 811-5514).
(x) Copy of Dealer (Sales) Agreement is incorporated by
reference to Registrant's Post-Effective Amendment
No. 9 on Form N-1A filed electronically with the SEC
on June 17, 1993 (File Nos. 33-20673 and 811-5514).
(xi) Conformed copy of Exhibit E to Rule 12b-1 Plan is
incorporated by reference to Registrant's
Post-Effective Amendment No. 36 on Form N-1A filed
electronically with the SEC on June 11, 1999 (File
Nos. 33-20673 and 811-5514).
(xii) Conformed copy of Exhibit F to Rule 12b-1 Plan
is incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed
electronically with the SEC on August 20, 1999 (File
Nos. 33-20673 and 811-5514).
(xiii) Conformed copy of Exhibit B to the Class B
Shares Rule 12b-1 Plan is incorporated by reference
to Registrant's Post-Effective Amendment No. 40 on
Form N-1A filed electronically with the SEC on
February 29, 2000 (File Nos. 33-20673 and 811-5514).
(b) Rule 18f-3 Plan
(i) Conformed copy of the Registrant's Multiple Class
Plan with conformed copies of Exhibits A and B is
incorporated by reference to Registrant's
Post-Effective Amendment No. 32 on Form N-1A filed
electronically with the SEC on July 8, 1998 (File
Nos. 33-20673 and 811-5514).
(ii) Conformed copy of Exhibit C to the Multiple Class
Plan is incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed
electronically with the SEC on August 20, 1999 (File
Nos. 33-20673 and 811-5514).
(iii) Conformed copy of Exhibit D to the Multiple Class
Plan is incorporated by reference to Registrant's
Post-Effective Amendment No. 40 on Form N-1A filed
electronically with the SEC on February 29, 2000
(File Nos. 33-20673 and 811-5514).
(11) Opinion of Counsel.
Conformed copy of Opinion and Consent of Counsel as to the
legality of the securities being registered, is incorporated by
reference to Registrant's Post-Effective Amendment No. 19 on Form
N-1A filed electronically with the SEC on June 27, 1994 (File
Nos. 33-20673 and 811-5514) .
(12) Opinion of Counsel supporting the tax matters and consequences to
shareholders.
(a) Form of Tax opinion of Stradley, Ronon, Stevens & Young,
LLP, special counsel to Federated Services Company, the
administrator for the Registrant, supporting the tax
matters and consequences to shareholders for the
reorganizations pursuant to Section 368(a)(1)(F) of the
Internal Revenue Code discussed in the Prospectus/Proxy
Statement for the Reorganization, is filed electronically
herewith as Exhibit No. EX-99.(12)(a).
(b) Form of Tax opinion of Stradley, Ronon, Stevens & Young,
LLP, special counsel to Federated Services Company, the
administrator for the Registrant, supporting the tax
matters and consequences to shareholders for the
reorganization pursuant to Section 368(a)(1)(C) of the
Internal Revenue Code discussed in the Prospectus/Proxy
Statement for the Reorganization, is filed electronically
herewith as Exhibit No. EX-99.(12)(b).
(13) Other material contracts.
(a) Fund Accounting Services, Administrative Services and
Transfer Agency Agreements
(i) Conformed copy of Agreement for Fund Accounting
Services and Transfer Agency Services is incorporated
by reference to Registrant's Post-Effective Amendment
No. 26 on Form N-1A filed electronically with the SEC
on June 20, 1997 (File Nos. 33-20673 and 811-5514).
(ii) Copy of Exhibit 1 to Agreement for Fund Accounting
Services and Transfer Agency Services is incorporated
by reference to Registrant's Post-Effective Amendment
No. 28 on Form N-1A filed electronically with the SEC
on August 6, 1997 (File Nos. 33-20673 and 811-5514).
(iii) Conformed copy of Amendment to Administrative
Services Agreement and the Agreement for Fund
Accounting Services and Transfer Agency Services is
incorporated by reference to Registrant's
Post-Effective Amendment No. 30 on Form N-1A filed
electronically with the SEC on December 22, 1997
(File Nos. 33-20673 and 811-5514).
(iv) Conformed copy of Amendment No. 1 to Exhibit 1 to
Agreement for Fund Accounting Services and Transfer
Agency Services is incorporated by reference to
Registrant's Post-Effective Amendment No. 32 on Form
N-1A filed electronically with the SEC on July 8,
1998 (File Nos. 33-20673 and 811-5514).
(v) Conformed copy of Amendment #2 to Exhibit 1 to the
Agreement for Fund Accounting Services and Transfer
Agency Services is incorporated by reference to
Registrant's Post-Effective Amendment No. 36 on Form
N-1A filed electronically with the SEC on June 11,
1999 (File Nos. 33-20673 and 811-5514).
(vi) Conformed copy of Amendment #3 to Exhibit 1 to the
Agreement for Fund Accounting Services and Transfer
Agency Services is incorporated by reference to
Registrant's Post-Effective Amendment No. 38 on Form
N-1A filed electronically with the SEC on August 20,
1999 (File Nos. 33-20673 and 811-5514).
(vii) Conformed copy of Recordkeeping Agreement including
exhibits A-C is incorporated by reference to
Registrant's Post-Effective Amendment No. 34 on Form
N-1A filed electronically with the SEC on March 12,
1999 (File Nos. 33-20673 and 811-5514).
(viii) Conformed copy of Amendment #1 to Exhibit A to
the Recordkeeping Agreement is incorporated by
reference to Registrant's Post-Effective Amendment
No. 40 on Form N-1A filed electronically with the SEC
on February 29, 2000 (File Nos. 33-20673 and
811-5514).
(ix) Conformed copy of Sub-Transfer Agency Agreement is
incorporated by reference to Registrant's
Post-Effective Amendment No. 34 on Form N-1A filed
electronically with the SEC on March 12, 1999 (File
Nos. 33-20673 and 811-5514).
(x) Conformed copy of Amendment No. 1 to Exhibit A of the
Sub-Transfer Agency Agreement is incorporated by
reference to Registrant's Post-Effective Amendment
No. 38 on Form N-1A filed electronically with the SEC
on August 20, 1999 (File Nos. 33-20673 and 811-5514).
(xi) Conformed copy of Amendment No. 2 to Exhibit A to the
Recordkeeping Agreement is incorporated by reference
to Registrant's Post-Effective Amendment No. 39 on
Form N-1A filed electronically with the SEC on
October 22, 1999 (File Nos. 33-20673 and 811-5514).
(xii) Conformed copy of Amendment No. 4 to Exhibit 1 to the
Agreement for Fund Accounting Services and Transfer
Agency Services is incorporated by reference to
Registrant's Post-Effective Amendment No. 40 on Form
N-1A filed electronically with the SEC on February
29, 2000 (File Nos. 33-20673 and 811-5514).
(xiii) Conformed copy of Amendment No. 2 to Exhibit A
to the Sub-Transfer Agency Agreement is incorporated
by reference to Registrant's Post-Effective Amendment
No. 42 on Form N-1A filed electronically with the SEC
on June 28, 2000 (File Nos. 33-20673 and 811-5514).
(xiv) Copy of Exhibit B to the Sub-Transfer Agency
Agreement is incorporated by reference to
Registrant's Post-Effective Amendment No. 42 on Form
N-1A filed electronically with the SEC on June 28,
2000 (File Nos. 33-20673 and 811-5514).
(b) Shareholder Services Agreement
(i) Conformed copy of Administrative Services Agreement
of the Registrant is incorporated by reference to
Registrant's Post-Effective Amendment No. 13 on Form
N-1A filed electronically with the SEC on December
27, 1993 (File Nos. 33-20673 and 811-5514).
(ii) Conformed copy of Shareholder Services Plan of
Registrant is incorporated by reference to
Registrant's Post-Effective Amendment No. 13 on Form
N-1A filed electronically with the SEC on December
27, 1993 (File Nos. 33-20673 and 811-5514).
(iii) Conformed copy of Exhibit A to Amended and Restated
Shareholder Services Plan is incorporated by
reference to Registrant's Post-Effective Amendment
No. 32 on Form N-1A filed electronically with the SEC
on July 8, 1998 (File Nos. 33-20673 and 811-5514).
(iv) Conformed copy of Amendment #2 to Exhibit A to
Amended and Restated Shareholder Services Plan is
incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed
electronically with the SEC on August 20, 1999 (File
Nos. 33-20673 and 811-5514).
(v) Conformed copy of Amended and Restated Shareholder
Services Agreement is incorporated by reference to
Registrant's Post-Effective Amendment No. 19 on Form
N-1A filed electronically with the SEC on May 3, 1996
(File Nos. 33-20673 and 811-5514).
(vi) Copy of Amendment No. 1 to Exhibit A to Shareholder
Services Agreement is incorporated by reference to
Registrant's Post-Effective Amendment No. 23 on Form
N-1A filed electronically with the SEC on
electronically with the SEC on June 27, 1996 (File
Nos. 33-20673 and 811-5514).
(vii) Conformed Copy of Amendment No. 2 to Exhibit A to
Shareholder Services Agreement is incorporated by
reference to Registrant's Post-Effective Amendment
No. 40 on Form N-1A filed electronically with the SEC
on February 29, 2000 (File Nos. 33-20673 and
811-5514).
(viii) Conformed copy of Amendment No. 1 to Exhibit A
to Amended and Restated Shareholder Services Plan is
incorporated by reference to Registrant's
Post-Effective Amendment No. 36 on Form N-1A filed
electronically with the SEC on June 11, 1999 (File
Nos. 33-20673 and 811-5514).
(ix) Conformed copy of Amendment No. 3 to Exhibit A to
Shareholder Services Agreement is incorporated by
reference to Registrant's Post-Effective Amendment
No. 40 on Form N-1A filed electronically with the SEC
on February 29, 2000 (File Nos. 33-20673 and
811-5514).
(x) Conformed copy of Amendment No. 4 to Exhibit A to
Shareholder Services Agreement is incorporated by
reference to Registrant's Post-Effective Amendment
No. 40 on Form N-1A filed electronically with the SEC
on February 29, 2000 (File Nos. 33-20673 and
811-5514).
(xi) Conformed copy of Exhibit I to the Distributor's
Contract is incorporated by reference to Registrant's
Post-Effective Amendment No. 40 on Form N-1A filed
electronically with the SEC on February 29, 2000
(File Nos. 33-20673 and 811-5514).
(xii) Conformed copy of Amendment No. 3 to Exhibit A to
Amended and Restated Shareholder Services Plan is
incorporated by reference to Registrant's
Post-Effective Amendment No. 40 on Form N-1A filed
electronically with the SEC on February 29, 2000
(File Nos. 33-20673 and 811-5514).
(14) Other opinions and consents.
(a) Consent of Ernst & Young LLP, independent auditors to the
Registrant, is filed electronically herewith as Exhibit No.
EX-99.(14)(a).
(b) Consent of KPMG LLP, independent auditors to the Governor
Funds, is filed electronically herewith as Exhibit No.
EX-99.(14)(b).
(15) Omitted financial statements.
Not Applicable.
(16) Power of Attorney.
Power-of-Attorney appointing C. Todd Gibson as attorney-in-fact
and agent, is filed electronically herewith as Exhibit No.
EX-99.(16).
Item 17. Undertakings
(1) The undersigned registrant agrees that, prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this registration statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act of 1933, as amended
(the "1933 Act"), the reoffering prospectus will contain the
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the
applicable form.
(2) The undersigned registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an
amendment to the registration statement and will not be used
until the amendment is effective, and that, in determining any
liability under the 1933 Act, each post-effective amendment shall
be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file by Post-Effective
Amendment the opinion of counsel regarding the tax consequences
of the proposed reorganization required by Item 16(12) of Form
N-14 within a reasonable time after receipt of such opinion."
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement
has been signed on behalf of the Registrant, in the City of Pittsburgh,
Commonwealth of Pennsylvania, on the 9th day of November, 2000.
VISION GROUP OF FUNDS
By: /s/C. Todd Gibson
-----------------
C. Todd Gibson, Secretary
Attorney in Fact for Edward C. Gonzales
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following person in the capacity and on the dates
indicated.
NAME: TITLE: DATE:
/s/ C. Todd Gibson Attorney in Fact for November 9, 2000
the Persons Listed
Below
---------------------------------
C. Todd Gibson
President and
Treasurer (Chief
Executive Officer and
Principal Financial
and Accounting Officer)
---------------------------------
Edward C. Gonzales*
Trustee
---------------------------------
Randall I. Benderson*
Trustee
---------------------------------
Joseph J. Castiglia*
Trustee
---------------------------------
Daniel R. Gernatt, Jr.*
Trustee
---------------------------------
George K. Hambleton, Jr.*
Trustee
---------------------------------
Mark J. Czarnecki*
* By Power of Attorney
EXHIBIT INDEX
Sequentially
Exhibit No. Document Numbered Page
----------- -------- -------------
EX-99.(12)(a) Form of Tax Opinion of Stradley, Ronon, Stevens
& Young, LLP for the reorganizations pursuant
to Section 368(a)(1)(F) of the Internal Revenue
Code
EX-99.(12)(b) Form of Tax Opinion of Stradley, Ronon, Stevens
& Young, LLP for the reorganization pursuant to
Section 368(a)(1)(C) of the Internal Revenue
Code
EX-99.(14)(a) Consent of Ernst & Young LLP, independent
auditors to Registrant
EX-99.(14)(b) Consent of KPMG LLP, independent auditors to
Governor Funds
EX-99.(16) Power of Attorney
3
Doc. #360501 v.01
[EX-99.(12)(A)]
10/5/00 DRAFT
_________________, 2000
Board of Trustees
Governor Funds
3435 Stelzer Road
Columbus, Ohio 43219
Board of Trustees
Vision Group of Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Re: AGREEMENTS AND PLANS OF REORGANIZATION DATED
[ ],
2000 (THE "PLANS") BETWEEN GOVERNOR FUNDS, A DELAWARE
BUSINESS TRUST (THE "FUNDS") AND VISION GROUP OF FUNDS, A
DELAWARE BUSINESS TRUST (THE "TRUST")__________________
Ladies and Gentlemen:
You have requested our opinion concerning certain federal income tax
consequences of the reorganization of the Funds and the Trust (the
"Reorganization"). The Reorganization will involve the transfer of all of
the assets of each of ten separate series of shares of the Funds to a
recently created, corresponding series of shares of the Trust (as such series
is set forth in Appendix A to this opinion) and the assumption of the
liabilities of each separate series of shares of the Funds by the
corresponding series of shares of the Trust. On the date of the
Reorganization, shares of each corresponding series of the will be credited
to shareholders of the related series of shares of the Funds, following which
the Fund will be dissolved. References in this opinion to a "Portfolio"
refer to each of the separate series of shares of the Funds, as set forth in
Appendix A, and references in this opinion to a "Series" refer to each of the
corresponding separate series of shares of beneficial interest of the Trust,
as set forth in Appendix A.
In rendering our opinion, we have reviewed and relied upon: (a) the
Agreements and Plans of Reorganization dated [ ], 2000 (the
"Plans"), made by the Funds and the Trust; (b) the proxy materials provided
to shareholders of the Funds in connection with the Special Meeting of
Shareholders held on ______________, 2000; (c) certain representations
concerning the Reorganization made to us by the Funds and the Trust in a
letter dated ________________, 2000 (the "Representation Letter"); (d) all
other documents, financial and other reports and corporate minutes that we
deemed relevant or appropriate; and (e) such statutes, regulations, rulings
and decisions as we deemed material in rendering this opinion. All terms
used herein, unless otherwise defined, are used as defined in the Plans.
For purposes of this opinion, we have assumed that each Portfolio of
the Funds on the date of the Reorganization, satisfies, and immediately
following the Reorganization, each Series of the Trust will satisfy, the
requirements of Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), for qualification as a regulated investment company.
Under regulations to be prescribed by the Secretary of the Treasury
(the "Secretary") under Section 1276(d) of the Code, certain transfers of
market discount bonds will be excepted from the requirement that accrued
market discount be recognized on disposition of a market discount bond under
Section 1276(a) of the Code. Such regulations are to provide, in part, that
accrued market discount will not be included in income if no gain is
recognized under Section 361(a) of the Code where a bond is transferred in an
exchange qualifying as a tax-free reorganization. As of the date hereof, the
Secretary has not issued any such regulations under Section 1276(d) of the
Code.
Based on the foregoing and provided the Reorganization is carried out
in accordance with the applicable laws of the State of Delaware, the Plans,
and the Representation Letter, it is our opinion that:
1. The transfer by each Portfolio of all of its assets subject to
its liabilities in exchange for shares of the corresponding Series will
qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the
Code, and the Portfolio and the Series will each be a "party to the
reorganization" within the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by a Portfolio upon the
transfer of all of its assets subject to its liabilities to the corresponding
Series in exchange solely for shares of such Series pursuant to Section
361(a) and Section 357(a) of the Code.
3. No gain or loss will be recognized by a Series upon the receipt
by it of all of the assets of the corresponding Portfolio subject to its
liabilities in exchange solely for shares of such Series pursuant to Section
1032(a) of the Code.
4. The basis of the assets of a Portfolio received by the
corresponding Series will be the same as the basis of such assets to such
Portfolio immediately prior to the exchange pursuant to Section 362(b) of the
Code.
5. The holding period of the assets of a Portfolio received by the
corresponding Series will include the period during which such assets were
held by such Portfolio pursuant to Section 1223(2) of the Code.
6. No gain or loss will be recognized by the shareholders of a
Portfolio upon the exchange of their shares in such Portfolio for shares of
beneficial interest in the corresponding Series (including fractional shares
to which they may be entitled), pursuant to Section 354(a) of the Code.
7. The basis of the shares of beneficial interest in a Series
received by the shareholders of a corresponding Portfolio (including
fractional shares to which they may be entitled) will be the same as the
basis of the shares of such Portfolio exchanged therefor pursuant to Section
358(a)(1) of the Code.
8. The holding period of the shares of beneficial interest in a
Series received by the shareholders of a corresponding Portfolio (including
fractional shares to which they may be entitled) will include the holding
period of the shares of such Portfolio surrendered in exchange therefor,
provided that the shares of such Portfolio were held as a capital asset on
the date of the Reorganization, pursuant to Section 1223(1) of the Code.
9. Each Series will succeed to and take into account as of the date
of the transfer as defined in Section 1.381(b)-1(b) of the regulations issued
by the Secretary (regulations issued by the Secretary are hereafter referred
to as "Treasury Regulations"), the items of a corresponding Portfolio
described in Section 381(c) of the Code, as provided in Section
1.381(b)-1(a)(2) of the Treasury Regulations.
Our opinion is based upon the Code, the applicable Treasury Regulations
promulgated thereunder, the present position of the Internal Revenue Service
as set forth in published revenue rulings and revenue procedures, present
administrative positions of the Internal Revenue Service, and existing
judicial decisions, all of which are subject to change either prospectively
or retroactively. We do not undertake to make any continuing analysis of the
facts or relevant law following the date of this opinion.
Our opinion is conditioned upon the performance by the Funds and the
Trust of their undertakings in the Plans and the Representation Letter.
This opinion is being rendered to the Funds and the Trust and may be
relied upon only by the Funds and the Trust and the shareholders,
respectively, of each.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By:
---
By: ________________________________________
APPENDIX A
GOVERNOR
FUNDS
VISION FUNDS
-------------------------------------------------------------------------------
Aggressive Growth Fund would be Vision Small Cap Stock Fund
(Investor Shares) reorganized into (Class A Shares)
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-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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Established Growth Fund would be Vision Large Cap Core Fund
(Investor Shares) reorganized into (Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Intermediate Term Income would be Vision Intermediate Term
Fund reorganized into Bond Fund
(Investor Shares) (Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
International Equity Fund would be Vision International Equity
(Investor Shares) reorganized into Fund
(Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Conservative would be Vision Managed Allocation
Growth Fund reorganized into Fund - Conservative Growth
(Investor Shares) (Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Growth Fund would be Vision Managed Allocation
(Investor Shares) reorganized into Fund - Aggressive Growth
(Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lifestyle Moderate Growth would be Vision Managed Allocation
Fund reorganized into Fund - Moderate Growth
(Investor Shares) (Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Limited Duration would be Vision Institutional Limited
Government Securities Fund reorganized into Duration U.S. Government Fund
(Investor Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Pennsylvania Municipal would be Vision Pennsylvania
Bond Fund reorganized into Municipal Income Fund
(Investor Shares) (Class A Shares)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Prime Money Market Fund would be Vision Institutional Prime
(Investor Shares) reorganized into Money Market Fund
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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Board of Trustees, Governor Funds
Board of Trustees, Vision Group of Funds
_________________, 2000
Page 3
[EX-99.(12)(B)]
10/5/00 DRAFT _____________, 2000
Board of Trustees
Governor Funds
3435 Stelzer Road
Columbus, Ohio 43219
Board of Trustees
Vision Group of Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
RE: AGREEMENT AND PLAN OF REORGANIZATION DATED _________, 2000
(THE "PLAN"), MADE BY GOVERNOR FUNDS (THE "FUNDS"), ON
BEHALF OF ITS SERIES, U.S. TREASURY OBLIGATIONS MONEY
MARKET FUND (THE "ACQUIRED FUND") AND VISION GROUP OF FUNDS
(THE "TRUST"), ON BEHALF OF ITS SERIES, VISION TREASURY
OBLIGATIONS MONEY MARKET FUND (THE "ACQUIRING FUND")
--------------------------
------------------------------
Ladies and Gentlemen:
You have requested our opinion concerning certain federal income tax
consequences of the reorganization of the Acquired Fund and the Acquiring
Fund, which will consist of: (i) the acquisition, by the Acquiring Fund, of
substantially all of the property, assets and goodwill of the Acquired Fund,
in exchange solely for shares of beneficial interest, without par value, of
the Acquiring Fund (the "Acquiring Fund Shares") and the assumption of the
Acquired Fund's liabilities; (ii) the distribution by the Acquired Fund of
the Acquiring Fund Shares [and any remaining assets to the shareholders of
the Acquired Fund] in complete liquidation of the Acquired Fund; and (iii)
the subsequent dissolution of the Acquired Fund, as soon as practicable after
the closing (the "Reorganization"), all upon and subject to the terms and
conditions of the Plan.
In rendering our opinion, we have reviewed and relied upon: (a) the
Plan, dated ____________, 2000, made by the Funds and the Trust; (b) the
proxy materials provided to shareholders of the Acquired Fund in connection
with the Special Meeting of Shareholders of the Acquired Fund held on
_______________, 2000]; (c) certain representations concerning the
Reorganization made to us by the Funds and the Trust in a letter dated
[___________], 2000 (the "Representation Letter"); (d) all other documents,
financial and other reports and corporate minutes we deemed relevant or
appropriate; and (e) such statutes, regulations, rulings and decisions as we
deemed material to the rendition of this opinion. All terms used herein,
unless otherwise defined, are used as defined in the Plan.
For purposes of this opinion, we have assumed that the Acquired Fund,
on the date of the Reorganization, satisfies, and immediately following the
Reorganization, the Acquiring Fund will satisfy, the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
for qualification as a regulated investment company.
Under regulations to be prescribed by the Secretary of the Treasury
(the "Secretary") under Section 1276(d) of the Code, certain transfers of
market discount bonds will be excepted from the requirement that accrued
market discount be recognized on disposition of a market discount bond under
Section 1276(a) of the Code. Such regulations are to provide, in part, that
accrued market discount will not be included in income if no gain is
recognized under Section 361(a) of the Code where a bond is transferred in an
exchange qualifying as a tax-free reorganization. As of the date hereof, the
Secretary has not issued any regulations under Section 1276(d) of the Code.
Based on the foregoing, and provided the Reorganization is carried out
in accordance with the applicable laws of the State of Delaware, the Plan and
the Representation Letter, it is our opinion that:
1. The acquisition by the Acquiring Fund of substantially all of the
assets of the Acquired Fund in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of the Acquired Fund's liabilities, followed
by the distribution by the Acquired Fund to its shareholders of the Acquiring
Fund Shares in complete liquidation of the Acquired Fund, will qualify as a
reorganization within the meaning of Section 368(a)(1)(C) of the Code, and
the Acquired Fund and the Acquiring Fund will each be a "party to the
reorganization" within the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by the Acquired Fund upon the
transfer of substantially all of its assets to the Acquiring Fund in exchange
solely for the Acquiring Fund Shares and the assumption by the Acquiring Fund
of the Acquired Fund's liabilities pursuant to Section 361(a) and Section
357(a) of the Code.
3. No gain or loss will be recognized by the Acquiring Fund upon the
receipt by it of substantially all of the assets of the Acquired Fund in
exchange solely for the Acquiring Fund Shares pursuant to Section 1032(a) of
the Code.
Board of Trustees, Governor Funds
4. No gain or loss will be recognized by the Acquired Fund upon the
distribution of the Acquiring Fund Shares to its shareholders in liquidation
of the Acquired Fund under Section 361(c)(1) of the Code.
5. The basis of the assets of the Acquired Fund received
by the Acquiring Fund will be the same as the basis of such assets to the
Acquired Fund immediately prior to the reorganization pursuant to Section
362(b) of the Code.
6. The holding period of the assets of the Acquired Fund received by
the Acquiring Fund will include the period during which such assets were held
by the Acquired Fund pursuant to Section 1223(2) of the Code.
7. No gain or loss will be recognized by the shareholders of the
Acquired Fund upon the exchange of their shares of the Acquired Fund (the
"Acquired Fund Shares") for the Acquiring Fund Shares (including fractional
shares to which they may be entitled), pursuant to Section 354(a) of the Code.
8. The basis of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they
may be entitled) will be the same as the basis of the Acquired Fund Shares
exchanged therefor pursuant to Section 358(a)(1) of the Code.
9. The holding period of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they
may be entitled) will include the holding period of the Acquired Fund Shares
surrendered in exchange therefor, provided that the Acquired Fund Shares were
held as a capital asset on the date of the Reorganization, pursuant to
Section 1223(1) of the Code.
10. The Acquiring Fund will succeed to and take into account, as of
the date of the transfer as defined in Section 1.381(b)-1(b) of the
regulations issued by the Secretary (regulations issued by the Secretary are
hereafter referred to as "Treasury Regulations"), the items of the Acquired
Fund described in Section 381(c) of the Code, subject to the conditions and
limitations specified in Sections 381, 382, 383 and 384 of the Code and the
Treasury Regulations.
Our opinion is based upon the Code, the applicable Treasury Regulations
promulgated thereunder, the present position of the Internal Revenue Service
as set forth in published revenue rulings and revenue procedures, present
administrative positions of the Internal Revenue Service, and existing
judicial decisions, all of which are subject to change either prospectively
or retroactively. We do not undertake to make any continuing analysis of the
facts or relevant law following the date of this opinion.
Our opinion is conditioned upon the performance by the Acquiring Fund
and the Acquired Fund of their undertakings in the Plan and the
Representation Letter.
This opinion is being rendered to the Acquiring Fund and the Acquired
Fund, and may be relied upon only by such Funds and the shareholders of
each.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By: ______________________________________
Doc. #360501 v.01
[EX-99.(14)(A)]
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the caption "Financial
Highlights" in the Prospectuses, "Independent Auditors" in the Statement of
Additional Information, and to the use of our report dated June 13, 2000 on
the annual report dated April 30, 2000 incorporated by reference in the
Statement of Additional Information dated June 30, 2000 of the Vision Group
of Funds, Inc. which are incorporation by reference in the Prospectus/Proxy
Statement dated November 9, 2000 included in this Registration Statement. In
addition, we consent to the incorporation by reference of our report dated
June 13, 2000 with respect to the financial statements of the Vision Treasury
Money Market Fund for the year ended April 30, 2000 in the Statement of
Additional Information included in this Registration Statement.
ERNST & YOUNG LLP
Boston, Massachusetts
November 8, 2000
[EX-99.(14)(B)]
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Trustees of the Governor Funds:
WE CONSENT TO THE INCORPORATION BY REFERENCE IN THE REGISTRATION STATEMENT
ON FORM N-14 (THE "REGISTRATION STATEMENT") OF OUR REPORT DATED AUGUST 15, 2000
ON OUR AUDITS OF THE FINANCIAL STATEMENTS OF THE GOVERNOR FUNDS COMPRISED OF THE
ESTABLISHED GROWTH FUND, AGGRESSIVE GROWTH FUND, INTERNATIONAL EQUITY FUND,
INTERMEDIATE TERM INCOME FUND, LIMITED DURATION GOVERNMENT SECURITIES FUND,
PENNSYLVANIA MUNICIPAL BOND FUND, LIFESTYLE CONSERVATIVE GROWTH FUND, LIFESTYLE
MODERATE GROWTH FUND, LIFESTYLE GROWTH FUND, U.S. TREASURY OBLIGATIONS MONEY
MARKET FUND, AND PRIME MONEY MARKET FUND (COLLECTIVELY HEREAFTER REFERRED TO AS
THE "FUNDS") WHICH REPORT IS INCLUDED IN THE JUNE 30, 2000 ANNUAL REPORT TO
SHAREHOLDERS FOR THE FUNDS INCORPORATED BY REFERENCE IN THE STATEMENT OF
ADDITIONAL INFORMATION IN THE REGISTRATION STATEMENT AND TO THE REFERENCE TO OUR
FIRM IN THE STATEMENT OF ADDITIONAL INFORMATION AND FORM OF AGREEMENT AND PLAN
OF ORGANIZATION FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT.
KPMG LLP
Columbus, OH
November 9, 2000
Doc. #346126 v.08
[EX-99.(16)]
POWER OF ATTORNEY
......Each person whose signature appears below hereby constitutes and
appoints the Secretary, Assistant Secretary(ies) of VISION GROUP OF FUNDS and
Senior Corporate Counsel, Mutual Fund Services and each of them, their true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for them and in their names, place and stead, in any and all
capacities, to sign any and all documents to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, by means of the
Securities and Exchange Commission's electronic disclosure system known as
EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to sign and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as each of them might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done
by virtue thereof.
SIGNATURES TITLE DATE
---------- ----- ----
/s/Edward C. Gonzales President & Treasurer August 11, 2000
---------------------------------
Edward C. Gonzales (Chief Executive Officer & Chief
Financial and Accounting Officer)
/s/Randall I. Benderson Trustee August 11, 2000
---------------------------------
Randall I. Benderson
/s/Joseph J. Castiglia Trustee August 11, 2000
---------------------------------
Joseph J. Castiglia
/s/Daniel R. Gernatt, Jr. Trustee August 11, 2000
---------------------------------
Daniel R. Gernatt, Jr.
/s/George K. Hambleton, Jr. Trustee August 11, 2000
---------------------------------
George K. Hambleton, Jr.
/s/Mark J. Czarnecki Trustee August 11, 2000
---------------------------------
Mark J. Czarnecki
Sworn to and subscribed before me this 11th day of August, 2000
/s/Janice L. Vandenberg
---------------------------------
Notarial Seal
Janice L. Vandenberg, Notary Public
Pittsburgh, Allegheny County
My Commission Expires July 4, 2002
Member, Pennsylvania Association of Notaries
